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The global electric vehicle transmission market size was USD 5.95 billion in 2019 and is projected to reach USD 17.56 billion by 2027, exhibiting a CAGR of 18.8% during the forecast period.
The increasing need to prevent environmental issues and protect natural resources has encouraged the interest of manufacturers in the development of electric vehicles (EVs). EVs have various advantages, as compared to the ICE engines as they provide a superior driving experience with simpler and less noisy design and are more efficient. They invoke an electric motor’s outstanding performance specifications such as constant power at high speeds range and high torque at low speeds. To drive electric vehicles, high-speed motors are a valuable choice as they are light in weight, cost-effective, as well as provide high efficiency. For instance, electric vehicles with high speed can provide the necessary power supply that can meet the required performances in urban areas.
COVID-19 Pandemic to Decline Demand Backed by Temporary Shutdown of Factories
The outbreak of the COVID-19 pandemic has triggered an alarm for Europe, as well as the global auto industry. The production factories are partially closed and the demand is projected to drop by as much as 20% in 2020 according to the Czech Automotive Industry Association. Many automobile manufacturers are worried about the fact that this pandemic may halt production processes. Also, electric vehicle sales are dipping.
However, the sale in European countries is surging. In the United Kingdom, for instance, the sale of electric vehicles has tripled, as compared to the year on year sale in March 2020. Also, according to the International Energy Agency (IEA), in the United States, the sales of Tesla have shown a 3% year on year increase. All these factors are likely to augment the sale of EVs, thereby leading to rising electric vehicle transmission market growth amid the COVID-19 pandemic.
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Downsizing of Transmission System is a Vital Trend
The trend of shifting towards electric vehicles over conventional vehicles is likely to increase over the forecast period owing to their ability to provide zero-emission. It will subsequently lead to a rise in the demand for electric vehicle transmissions. Additionally, manufacturers of EV transmission are continuously looking for materials that can lessen the total weight of the transmission system without negotiating performance. All these factors are likely to surge the demand for EVs.
Apart from that, efficient use of the power stored in battery packs of electric vehicles is also crucial, which, in turn, has prompted manufacturers to develop unique transmission systems to meet the performances and close tolerances of battery. For instance, Volkswagen initiated a project on developing super-light cars by reducing its weight by 85 kg with a multi-material approach.
Rising Demand for Fuel-efficient and Low-emission Vehicles to Propel Growth
Gasoline is a fossil fuel. It is not a renewable energy source and is anticipated to be exhausted in the future. Electric vehicles do not use gasoline and provide low emission, as compared to conventional vehicles. Gasoline-powered vehicles convert approximately 16%-20% of the energy stored in gasoline to wheels, while electric vehicles convert more than 50% of electric energy from the power source to the wheels.
Also, the demand for fuel-efficient and low-emission vehicles is growing owing to the rising prices of petrol and diesel, as well as stringent emission regulations. All these factors associated with the adoption of EVs are likely to increase the electric vehicle (EV) transmission system market share. For instance, the scrappage policy introduced in Europe to increase the demand for vehicles would lead to a rise in the adoption of zero CO2 vehicles owing to the implementation of stringent emission regulations in this region.
Increasing Production and Adoption of Electric Vehicles to Drive Growth
Electric vehicles have several advantages over fuel-powered vehicles. Owing to this, the demand and production of EVs have greatly increased in recent years. Also, rising investments of electric vehicle manufacturers in some regions would boost market growth. For instance, according to AVERE (The European Association for Electromobility) and the Electric Vehicle Association of Asia Pacific (EVAAP), the investment made by EV automakers to produce EVs together with private companies in Europe was USD 60 billion and in China, it was USD 17 billion. Additionally, the rising stringent emission regulations around the world to augment the sales and production of electric vehicles would lead to the surging demand for transmission systems.
High Cost of Electric Vehicles May Restrain Growth
The cost of electric vehicles is higher, as compared to conventional vehicles. The prime reason for this is the usage of expensive raw materials in battery manufacturing and the involvement of costly processes in the production of batteries. There are also many restrictions associated with electric vehicles, such as low range of travel anxiety, moderate performance, and lack of charging terminals, among others, which may lead to the lower demand for these vehicles. It will subsequently hamper the growth of the electric vehicle transmission system market.
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AT Transmission Segment is Expected to Dominate the Market
Based on the transmission system, the market is segmented into AMT transmission, CVT transmission, AT transmission, and others. The AT transmission segment holds the major share in the global market. Various advantages of AT include a smooth riding experience with no gear shift hustle and greater performance.
The AMT transmission segment is also likely to show good growth owing to its dual transmission modes, such as automatic and manual transmission. These transmissions provide the required higher power in manual transmission and the ease of long-distance travel in automatic transmission. The CVT transmission segment is expected to show steady growth in the market during the forecast period owing to the declining demand for these transmissions in electric vehicles.
Single Speed Segment to Hold the Largest Share Fueled by Its Ability to Provide Better Performance
Based on the transmission type, the market is segmented into single speed and multi-speed. The transmission type single speed segment accounts for the major share in the global market owing to its better performance with smooth ride experience. It is also used in all battery-powered electric vehicles.
The multi-speed transmissions segment is expected to showcase high growth in the market owing to its increasing penetration in EVs. It is used in electric vehicle racing activities to empower the electric motor. This factor is also projected to increase the share of the segment in this market during the forecast period.
Battery Electric Vehicle Segment to Grow Rapidly Stoked by Their Higher Adoption
Based on the vehicle type, the market is segmented into battery electric vehicle, plug-in hybrid electric vehicle, and hybrid electric vehicle. The battery-electric vehicle segment holds the largest share in the global market. The rising adoption of battery electric vehicles owing to their various advantages such as zero-emission vehicles and lower maintenance would drive the growth of this segment.
Moreover, the plug-in hybrid electric vehicle segment is anticipated to establish high growth in the market during the forecast period owing to the rising adoption of PHEV in several developed countries. The hybrid electric vehicle segment is also anticipated to show exponential growth in the market due to their rising adoption in Asia.
Asia Pacific Electric Vehicle Transmission Market Size, 2019 (USD Billion)
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The market size in Asia Pacific stood at USD 2.98 billion in 2019. This region holds dominance in the global market and is also expected to show exponential growth in the coming years. The rising production and sales of electric vehicles is a major factor responsible for the growth of this region. China is considered to be the major contributor in this market owing to the rising adoption of mini EVs in this country.
Furthermore, key players such as Tesla are investing in research and development of transmission systems in North America, thereby consequently boosting the market growth in this region. For instance, Tesla introduced an electric truck named SEMI with notable performance in transmission, such as 0-60 mph in five seconds, as compared to regular diesel trucks. It takes almost 20 seconds to reach 0-60 mph.
Europe is likely to show an exponential growth owing to the emergence of stringent emission regulations in this region. For instance, the European Union has set a target of 95g CO2 per Km for 2020/2021. Such regulations are set to result in the rising demand for electric vehicle transmission in this region. The rest of the world would showcase slow growth in the market owing to the partial developments of the automotive industry in Latin America and Africa.
Continental AG, ZF Friedrichshafen AG, and AISIN SEIKI CO., LTD. are Top Players
Key players in the electric vehicle transmission market include Dana Limited, ZF Friedrichshafen AG, AVL List GmbH, Continental AG, and Eaton. The majority of them are focusing on expanding their production capabilities to reduce vehicular emissions and lower the carbon footprint of the automotive industry.
For instance, Continental AG has started the mass production of electric powertrains in China, which will be used in electric vehicles from both European and Chinese OEMs. Furthermore, owing to the increasing stringency of emission norms, the company has announced a cease in further investments for parts used in internal combustion (IC) engines signaling the rapid shift in focus towards electrification. Hence, a greater focus on R&D activities to develop novel electric vehicle technology by major players is set to positively influence the growth of the market.
An Infographic Representation of Electric Vehicle Transmission Market
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The electric vehicle transmission market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, it offers insights into the key market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD billion) & Volume (Thousand units)
By Transmission System
By Transmission Type
By Vehicle Type
Fortune Business Insights says that the global market size for electric vehicle transmission was USD 5.95 billion in 2019 and is projected to reach USD 17.56 billion by 2027.
In 2019, the Asia Pacific market value stood at USD 2.98 billion.
The market is projected to grow at a CAGR of 18.8% in the forecast period (2020-2027).
The AT transmission system segment is expected to lead the market during the forecast period.
The increasing sales and production of EVs is the key factor driving the global market.
Continental AG and ZF Friedrichshafen AG are the major players in the global market.
Asia Pacific dominated the market in terms of share in 2019.
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