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The global electric vehicle (EV) transmission market size was USD 5.26 billion in 2020. The market is projected to grow from USD 7.14 billion in 2021 to USD 20.90 billion in 2028 at a CAGR of 16.6% in 2021-2028.The global impact of COVID-19 has been unprecedented and staggering, with the market manufacturers witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the market exhibited a huge decline of -11.6% in 2020 compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
The increasing need to prevent environmental issues and protect natural resources has encouraged the interest of manufacturers in the development of EVs. Electric vehicle (EV) transmission has various advantages 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 and high torque at low speeds. To drive EV, high-speed motors are a valuable choice as they are light in weight, cost-effective, and provide high efficiency. For instance, highway EVs with high speed can provide the necessary power supply to 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 and the global auto industry. According to the Czech Automotive Industry Association, the production factories are partially closed, and the demand is projected to drop by as much as 20% in 2020. Many automobile manufacturers are worried about the fact that this pandemic may halt production processes. Also, global EVs sales are dipping.
However, the sale in European countries is surging. For instance, in the U.K., the sale of EVs has tripled compared to the year-on-year sale in March 2020. Also, according to the International Energy Agency (IEA), in the U.S., 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 EVs 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 EV transmissions. Additionally, manufacturers of electric vehicle transmission are continuously looking for materials that can reduce the transmission system's total weight 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 EVs is also crucial, which, in turn, has prompted manufacturers to develop unique transmission systems to meet the performances and close tolerances of batteries. 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. EVs 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 EVs 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 and stringent emission regulations. All these factors associated with the adoption of EV are expected to increase the electric vehicle (EV) transmission 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 EVs to Drive Growth
EV 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 EV manufacturers in some regions would boost the 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 electric vehicles together with private companies in Europe was USD 60 billion. In China, it was USD 17 billion. Additionally, the rising stringent emission regulations worldwide to augment the sales and production of EVs would lead to the surging demand for transmission systems.
High Cost of EVs May Restrain Growth
The cost of EVs 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 EV, such as low range of travel anxiety, moderate performance, and lack of charging terminals, which may lead to the lower demand for EV. It will subsequently hamper the growth of this market.
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AT Transmission Segment to Dominate 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 and significant 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 during the forecast period due to the declining demand for these transmissions in EVs.
Single Speed Segment to Hold Largest Share Fueled by Its Ability to Provide Better Performance
Based on the transmission market by 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 EVs.
The multi-speed transmissions segment is expected to showcase high growth due to its increasing penetration of EV. It is used in EVs racing activities to empower the electric motor. This factor is also projected to increase the segment's share in this market during the forecast period.
BEV Segment to Grow Rapidly Stoked by Their Higher Adoption
Based on the vehicle type, the market is segmented into BEV, PHEV, and HEVs.
The BEV segment holds the largest share in the global market. The rising adoption of BEV owing to their various advantages, such as zero-emission vehicles and lower maintenance, would drive the growth of this segment.
Moreover, the PHEV 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 HEV segment is also anticipated to show exponential growth due to its rising adoption in Asia.
Asia Pacific Electric Vehicle Transmission Market Size, 2020 (USD Billion)
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The market size in Asia Pacific stood at USD 2.63 billion in 2020. Based on regional analysis, 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 EVs is a major factor responsible for the growth of this region. China is considered the major contributor to this market due to the rising adoption of mini EVs.
Furthermore, key players such as Tesla are investing in research and development of transmission systems in North America, 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, compared to regular diesel trucks. It takes almost 20 seconds to reach 0-60 mph.
Europe is likely to show 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 due to the automotive industry's partial developments in Latin America and Africa.
Continental AG, ZF Friedrichshafen AG, and AISIN SEIKI CO., LTD. are Top Players
Key players in this 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, 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, major players' greater focus on R&D activities to develop novel EV technology by major players is set to influence the market's growth.
An Infographic Representation of Electric Vehicle Transmission Market
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The global electric vehicle transmission market research report provides a detailed analysis of the market. It focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market's growth 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 electric vehicle transmission market size was USD 5.26 billion in 2020 and is projected to reach USD 20.90 billion by 2028.
In 2020, the Asia Pacific electric vehicle transmission market value stood at USD 2.63 billion.
The electric vehicle transmission market is projected to grow at a CAGR of 16.6% in the forecast period (2021-2028).
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 share in 2020.
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