Vehicle Electrification Market Size, Share and Industry Analysis By Product Type (Start/Stop System, Electric Air Conditioner Compressor, PTC Heater, Electric Vacuum Pump, Electric Water Pump, Electric Oil Pump, Starter Motor & Alternator, Integrated Starter Generator, Actuators). By Vehicle Type (Passenger Cars, Light Commercial Vehicles & Heavy Commercial Vehicles), and Regional Forecast, 2032

The global vehicle electrification market size was USD 27.90 billion in 2018 and is projected to reach USD 96.3 billion by 2032, exhibiting a CAGR of 10.0% during the forecast period. The Asia Pacific region dominated the market in 2018, with a value of USD 12.3 billion and a market share of 44.08%. The maket growth is driven by factors such as, growing utility programs and increasing use of engine shut down system technologies across the globe. 

Vehicle electrification increases the efficiency of the vehicle and reduces dependency on conventional fuels and lowers carbon emissions. Vehicle electrification is the method of electrifying all components of the vehicle which are required for its propulsion; this is done by replacing conventional systems by electrical systems. For example, conventional starter motors and alternators are replaced with an integrated starter generator system (ISG). Additionally, vehicle electrification offers less operational cost and requires less maintenance as it eliminates the use of coolants in the vehicles.

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Global Vehicle Electrification Market Overview

Market Size:

• 2018 Value: USD 27.9 billion
• 2026 Forecast Value: USD 53.3 billion (Compound Annual Growth Rate: ~8.5% from 2019–2026)

Market Share:

• Regional Leader: Asia-Pacific held approximately USD 12.3 billion in 2018, making it the largest region in that year, driven by high EV adoption in markets like China, India, and Japan
• Fastest-Growing Region: Asia-Pacific is also the fastest-growing, supported by rapid digitization and EV ecosystem expansion in India, Japan, and China
• End‑User Leader: The Integrated Starter Generator (ISG) segment led the market during the forecast period, as it dominates product-type adoption

Industry Trends:

• Start/Stop Systems & ISG Growth: These technologies dominate the vehicle electrification mix due to improved fuel efficiency.
• Expanding Product Portfolio: Including PTC heaters, electric compressors, pumps, actuators, and integrated starter-generator systems that enhance EV performance.
• Hybrid Vehicle Adoption: ISG and related products support smoother transitions between combustion and electric drive.

Driving Factors:

1. Stringent Emission Regulations: Global regulatory pressure is pushing automakers to adopt electrification technologies rapidly.
2. Fuel Efficiency Mandates: Demand for fuel-saving systems like start/stop and electric pumps is rising.
3. Integrated Systems for OEMs: Automakers prefer integrated components (e.g., ISG) to reduce complexity and weight.
4. Electrification of Light & Heavy Commercial Vehicles: Widening use in passenger cars, LCVs, and HCVs expands addressable market.
5. Technological Advancements: Ongoing innovation in electric water/oil pumps, vacuum systems, and compressors fuels market expansion.

VEHICLE ELECTRIFICATION MARKET TRENDS

Increasing Utility Programs to Support the Adoption of Electric Vehicles has led to Witnessed Significant Market Trend

As per Rocky Mountain Institute by 2022, 2.9 million electrified vehicles would be on the road, which would add over 11000 gig watts-hour of electricity demand. Governments and OEMs across the globe are trying to meet the rising demand for electric power for vehicles by building new charging infrastructure. The US and Europe have installed a smart-grid charging system, which allows managing charging loads of EVs remotely.

The Increasing Use of Advanced Technologies Such as Engine Shut Down System is Likely to Drive the Market

The Increasing use of engine shut down system is one of the major market trends in the vehicle electrification market. During heavy traffic or at the signals, if the vehicle comes at a halt, the integrated starter generator system automatically shuts off the engine. For example, if the vehicle is running slower than the specified threshold, the driveline is opened, and the power supply system supports the electrical load when the vehicle is at a halt, the engine starts again when the accelerator is depressed. The electric motor offers additional power to the IC engine; the fuel consumption is reduced without affecting the power output.

VEHICLE ELECTRIFICATION MARKET GROWTH FACTORS

Stringent Government Emission Regulations is expected to drive the growth of this market

Vehicle emission has caused a significant impact on the environment and human life; therefore, several governments’ bodies across the globe have imposed stringent emission norms for vehicles. This, in turn, has forced automotive manufacturers to produce cars that cause fewer emissions and stick to the regulations imposed by the government. Governments in developing countries are implementing new strategies such as tax exemptions; to attract consumers to purchase hybrid and electric vehicles.

The Increasing Demand for Hybrid Vehicles is expected to drive the market over the Forecast Period

Increasing demand for hybrid vehicles is expected to drive the market over the forecast period. Key manufacturers have heavily invested in R&D to produce hybrid vehicles that do not cause emission, have higher efficiency than conventional vehicles, and also meet the industry standards. Increasing awareness among the consumers regarding vehicular emissions is anticipated to fuel the demand for hybrid and electrified vehicles during the forecast period. All these factors are likely to drive the growth of the vehicle electrification market over the forecast period.

RESTRAINING FACTORS

The Cost of Vehicle Electrifications is Anticipate to Restraint the Growth of the Market

The maintenance and replacement cost of vehicle electrifications is expensive; this factor is anticipated to restrain the growth of the vehicle electrification market over the forecast period. Key OEMs are focusing on developing cost-effective components that are sturdy and have a high life.

VEHICLE ELECTRIFICATION MARKET SEGMENTATION ANALYSIS

By Product Analysis

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Integrated Starter Generator (ISG) is estimated to dominate the market over the Forecast Period

By product type, the vehicle electrification market is segmented into the start/stop system, PTC Heater, starter motor and alternator, integrated starter generator, internal combustion engine, actuators, electric oil pump, electric vacuum pump, electric water pump, and electric air conditioner compressor. The integrated starter generator segment is anticipated to dominate the market over the forecast period. Increasing greenhouse gas emissions has from conventional vehicles have fuelled the demand for advanced vehicles integrated with the ISG system, which helps to curb the emissions from the vehicle. The integrated starter generator replaces the starter motor and alternator in the conventional vehicles bevs by automatically controlling its start/stop system and, in turn, offers better fuel efficiency and fuel economy. The integrated starter generator acts as a two-directional power converter by changing mechanical energy into electrical energy and vice versa. It also provides noiseless and vibration-less operation of the engine. Start/Stop System is projected to exhibit a CAGR of 6.02%.

By Vehicle Type Analysis

Passenger Car Segment is Likely to Experience Significant Growth during the Forecast Period

Based on the vehicle type, the market is segmented into passenger cars, light commercial vehicles, and heavy commercial vehicles. The passenger car segment is anticipated to dominate the market with a value of USD 40.0 billion in 2025 over the forecast period. Rising sales of passenger cars are likely to drive the market over the forecast period. The light commercial vehicle segment is estimated to show good growth in the market. Increasing government initiatives to reduce emission levels caused by commercial vehicles is one of the significant reasons fuelling the growth of the LCV over the forecast period.

REGIONAL ANALYSIS

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By region, further, the vehicle electrification market has been segmented into Europe, North America, Asia-Pacific, and the Rest of the World. Asia-Pacific is expected to dominate the market over the forecast period. The government initiatives in countries such as China, India, and South Korea for the usage of the electrified vehicles and offering consumers tax exemption for the purchase of these vehicles is expected to drive the growth of the market in this region. 

Europe is the second-largest market holder of the vehicle electrification market and is also estimated to show decent growth in the market over the forecast period. Europe is projected to exhibit a CAGR of 8.4%. The Early adoption of advanced technologies and hybrid vehicles in this region is one of the major factors which is maintaining the second-largest position of Europe in this market.

North America is expected to show steady growth in the vehicle electrification market over the forecast period. The Vehicle Electrification Market in the U.S. is projected to grow significantly, reaching an estimated value of  USD 6.47 billion by 2026

INDUSTRY KEY PLAYERS

Robert Bosch GmbH is the dominant player in the vehicle electrification market.

Robert Bosch GmbH is expected to be the dominant player in the vehicle electrification market. Bosch has adopted various strategies for expansion, partnerships, and acquisition and new product development to maintain its leading position in the electrification market. Robert Bosch has a presence in emerging markets such as Brazil, India, and China. The presence of both emerging markets and building strategic customer relationships have strengthened its global position in the market.

LIST OF KEY COMPANIES PROFILED:

• Robert Bosch GmbH
• Continental AG
• Denso Corporation
• Delphi Technologies PLC
• Johnson Electric Holding Limited
• Volkswagen
• Toyota Motors Corporation
• Honda Motors Co. Ltd

KEY INDUSTRY DEVELOPMENTS:

• In July 2021, Suzuki Motor Corporation and Daihatsu Motor Co., Ltd announced that they had joined forces for the Commercial Japan Partnership commercial vehicle project to accelerate their carbon neutrality initiatives in mini-vehicles through the dissemination of CASE technologies and services. The collaboration will accelerate the electrification of mini-vehicles.
• In June 2021, XL Fleet Corp., the leader in fleet electrification solutions for municipal and commercial fleets, announced a collaboration agreement with Rubicon, a software platform, which offers smart waste and recycling solutions for governments and businesses worldwide. The collaboration will provide XL Fleet’s offering for fleet electrification to Rubicon’s waste and recycling hauler partners.
• In June 2021, Ford announced the acquisition of Electriphi, California-based charging management and fleet monitoring software provider for electric automobiles. The Electriphi’s team and services will be integrated with the “Ford Pro.” The acquisition will positively influence Ford’s vehicle electrification.
• In February 2021, Ford Motors Company announced that its European division would soon phase out of fossil fuel-powered vehicle production, and by 2026 Ford will only offer plug-in hybrid and electric models. Moreover, by 2030 the all passenger vehicles will be powered by batteries only.

REPORT COVERAGE

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The global vehicle electrification market 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, the report 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 growth of the market over recent years.

Report Scope & Segmentation