Internal Combustion Engine Market Size, Share & Industry Analysis, By Fuel (Natural Gas, Gasoline, and Others), By Application (Automotive, Marine, Aircraft, and Others) and By Regional Forecast, 2025-2032

The global internal combustion engine market size was valued at USD 280.09 billion in 2024 and is projected to grow from USD 293.32 billion in 2025 to USD 499.94 billion by 2032, exhibiting a CAGR of 7.91% during the forecast period. Asia Pacific dominated the internal combustion engine market with a share of 49.75% in 2024.

An internal combustion engine (ICE) is a type of engine that converts biochemical energy of fuel into mechanical energy. The process involves burning a fuel and air mixture in a closed chamber to generate high-pressure gases, which then powers the engine's moving parts.

Internal combustion engines are used in multiple applications, such as for vehicles, aircraft, marine vessels, and industrial machinery, to deliver power. Hydrocarbon-based fuels such as gasoline, natural gas, diesel fuel, or ethanol power these engines for the high performing criteria.

Cummins Inc. is one of the major players in the global market. The company designs engines for multiple applications and supports them through a global sales and service network. The company’s wide portfolio covers natural gas, hydrogen, and G-Drive engines.

MARKET DYNAMICS

DRIVING FACTORS

Technological Advancements in ICE Engines to Influence Market Growth

The technological developments in ICE engines have been evident over the decades. This improved the engine’s performance of vehicles and helped to maintain their quality. Innovations such as variable valve timing, turbocharging, and advanced combustion technologies improve ICEs’ efficiency, driving the demand for internal combustion engines globally. Manufacturers are trying to develop engines that can perform well with low fuel consumptions. In addition, research and development efforts are focused on enhancing durability, reducing weight, and increasing thermal efficiency.

Growing Demand for ICE-Based Vehicles to Boost Market Growth

The transportation industry is expanding owing to the growth in sales of vehicles. Due to their high performance and sustainability, most of these vehicles are driven by ICE engines. Moreover, growing vehicle sales have recently influenced the internal combustion engine share globally. For instance, the global automotive sector is gradually recovering from pandemic when significant market such as U.S. observed decline in demand and other prolonged effects of pandemic such as continued strain on supply chain. China has promptly become a net exporter, mainly to Mexico for low-cost ICE vehicles and Europe for EVs.

MARKET RESTRAINTS

Strict Environmental Regulation to Hinder Market Growth

Different government bodies are applying stricter regulations that limit vehicular emissions standards. In addition, this trend is shifting consumers' purchases toward electric vehicles. Moreover, businesses are trying to develop electric vehicles, hindering the ICE market growth. As per the data of the International Energy Agency, almost 14 million new electric cars remained registered worldwide in 2023, carrying their total number on the roads to 40 million.

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MARKET OPPORTUNITY

Rising Disposable Income to Boost Market Growth

Rising disposable income will influence the ICE market growth globally. As more people shift to urban areas, the demand for individual and public transportation options upsurges, boosting vehicle sales. Growing demand for vehicles, driven by the spending power of the middle class, is driving the growth of engine market share. Moreover, the expansion of road infrastructure facilitates the adoption of ICE vehicles, which is also a key factor in market growth.

MARKET CHALLENGES

Acceptance of EVs makes to Obstruct Market Growth

The sales of electric vehicles have been growing in recent years, primarily owing to the rising fuel prices in developing countries. Unlike fuel-based vehicles, EVs can deliver better performance and require low maintenance during use. Moreover, it charges the EV battery quickly and consumes little electricity, driving the market growth for the EV sector. For instance, as per the data of IEA, electric car sales in 2023 were 3.5 million, higher than 2022, marking a 35% year-on-year rise. This is more than six times higher than in 2018.

INTERNAL COMBUSTION ENGINE MARKET TRENDS

Rising Focus on Fuel Efficiency to Boost Market Growth

The increasing global focus on fuel efficiency and eco-friendly sustainability has significantly influenced the internal combustion engine (ICE) market. Governments are becoming progressively aware of the necessity to reduce carbon emissions, leading to stringent guidelines aimed at improving fuel economy. The availability of high performance fuel types such as speed fuel and power fuels, is one example of fuel sources that enhance vehicle performance. For instance, In February 2023, Hindustan Gasoline Corporation Limited (HPCL) introduced poWer95, the premium petrol for vehicles. This will help vehicle engines perform well while driving.

Impact of COVID-19

COVID-19 pandemic has severely impacted the global internal combustion engine growth and its components due to the disruption in global supply and demand. In addition, the pause in operation across industrial sectors, such as manufacturing and packaging, led to the reduced production of components and devices. Major factors contributing to this include the inaccessibility of raw materials, the unavailability of workers, the closing of borders, and the disruption of import and export activities, all of which hindered market growth.

SEGMENTATION ANALYSIS

Gasoline Segment Dominates the Market Due to Global Availability of Resources  

Based on fuel, the market is segmented into natural gas, gasoline, and others.

The gasoline segment held a market share of 65% in 2024, driven by the availability of the resources globally. Moreover, the growing demand for gasoline is also attributed to factors such as fuel efficiency, mileage, and quality performance. As per Goldman Sachs, gasoline growth is predicted to peak around 2030- 2035, primarily owing to slower EV adoption, and oil demand could continue to grow toward 113 million barrels a day by 2035.

Natural gas is the fastest-growing segment owing to its relative abundance, cost-effectiveness, and lower ecological impact compared to other fossil fuels such as coal. Moreover, the shifting trend toward hybrid vehicles is also one of the major factors driving segment growth.

 By Application

Automotive Segment is dominating the Market, backed by the Application of IC Engine  

Based on application, the market is segmented into automotive, marine, aircraft, and others.

Automotive is the dominant segment driven by the IC engine application in bikes, commercial vehicles, and heavy-duty vehicles. In addition, the recent development of IC engines to enhance performance is also influencing market growth. The segment is expected to dominate the market share of 52% in 2025.

The marine segment is contributing significantly to the global market share due to advancements in technology. Recently, ammonia has been developed as a marine fuel due to its zero carbon dioxide emissions when combusted. This segment is anticipated to exhibit a CAGR of 6.32% during the forecast period.

Others is the fastest-growing segment due to the application of engines in machinery and other sectors.

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INTERNAL COMBUSTION ENGINE MARKET REGIONAL OUTLOOK

The market has been studied geographically across five main regions: North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Asia Pacific

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Asia is Dominating the Market Due to Growth in the Automotive Sector

Asia Pacific is the dominating region driven by rapid expansion in the automotive sector in recent years. The regional market value in 2024 was USD 139.36 billion, and in 2023, the market value led the region by USD 133.69 billion. Heavy consumption of IC engines in modern commercial and heavy-duty vehicles is influencing the growth of internal combustion engines. Countries such as China and India are playing a key role in the growth of automotive components such as engines due to the recent development.

China

Increased Preference for Substitute Fuels the Market Growth

The market value in China is expected to be USD 60.86 billion in 2025. On the other hand, India is projecting to hit USD 52.55 billion and Japan is likely to hold USD 15.52 billion in 2025.

China is leading the internal combustion engine market in Asia Pacific, contributing to more than half of the region’s revenue due to technological advancements. China is exploring ways to preserve the ICE by using substitute fuels such as hydrogen and emerging synthetic fuel engines.

North America

Robust Automobile and Aircraft Sector Encourages Market Growth

North America internal combustion engine market is witnessing substantial growth due to the strong automobile and aircraft sectors. North America region is to be anticipated as the third-largest market with USD 52.64 billion in 2025. The region is showing high manufacturing capabilities in luxury vehicles and defense aircraft. For instance, in November 2024, VoltAero, a start-up, is set to launch its Cassio hybrid-electric aircraft in the North American market. It will use a momentum system that combines electric motors for takeoff, taxiing, and short flights with an internal combustion engine for longer trips and battery recharging.

U.S.

Presence of International Players Boosts Market Growth

The U.S. is the dominating segment in the North American region owing to the growing demand for internal combustion engines for multiple applications in the country. The U.S. is considered the home for engine manufacturers, driven by the presence of international players and high-performing engines. The Environmental Protection Agency (EPA) has announced plans to decrease pollutants from heavy-duty trucks through stricter regulations. Hence, political and environmental factors are pushing developments in internal combustion engines. The U.S. market is expected to reach USD 44.94 billion in 2025.

Europe

Europe is the Fastest-Growing Region driven by Rising Demand for Fuel-Based Machinery

Europe is anticipated to account for the second-highest market size of USD 61.40 billion in 2025, exhibiting the second-fastest growing CAGR of 7.22% during the forecast period.

The market in Europe is the fastest-growing owing to the growing demand for fuel-based machinery in the industrial sector. Power generation is one of the major applications of IC engines. Along with this, growing sales of compressors and pumps that use IC engines are also contributing to market growth. The market value in U.K. is expected to be USD 10.26 billion in 2025.

On the other hand, Germany is projecting to hit USD 14.76 billion and France is likely to hold USD 8.05 billion in 2025.

Latin America

Rising Energy Needs to Contribute to Market Development

Latin American countries are actively participating in the market. This is owing to the expansion of the industrial sector and high returns on manufacturing investments, especially in power generation. The region has sought to improve its energy-efficient product in recent years to meet the growing demand for energy in industrial spaces. Brazil and Mexico are playing an important role in fulfilling the energy demand in Latin America.

Middle East & Africa

Demand for Premium Vehicles is Boosting Market Growth

Middle East & Africa region is to be anticipated as the fourth-largest market with USD 18.36 billion in 2025. The Middle East & Africa are witnessing significant growth, propelled by a focus on manufacturing high-performance cars. Countries such as UAE, Saudi Arabia, and Qatar are well known for their premium vehicles. This trend is driving improvements in internal combustion engines in the region. South Africa’s internal combustion engine market is also contributing a significant share to the global market. The GCC market size is estimated to be USD 8.03 billion in 2025.

COMPETITIVE LANDSCAPE

KEY INDUSTRY PLAYERS

Recent Technology Advancements by Key Market Players to Influence the Market Demand

The global market is highly fragmented, with key players and some medium-scale regional players focusing on a wider range of engine technologies. Manufacturers are increasingly required to demonstrate their technological advancements, helping countries meet regulatory requirements and making them boost the efficiency of applications.

For Instance, in July 2024, Triton EV's hydrogen engine marked a significant advancement in automotive technology. Using hydrogen as a fuel source, this innovative engine produces zero carbon emissions, unlike traditional gasoline engines.

List of Key Internal Combustion Engine Companies Profiled:

• Toyota Motor Corporation (Japan)
• AB Volvo (Sweden)
• Mahindra & Mahindra Ltd. (India)
• Volkswagen Group (Germany)
• Rolls-Royce plc (U.K.)
• MAN (Germany)
• Renault Group (France)
• Mitsubishi Heavy Industries (Japan)
• General Motors (U.S.)
• Ford Motor Company
• Caterpiller (U.S.)
• AGCO corporation (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• May 2024- Volvo, one of the leading motor manufacturers, announced its plans to launch hydrogen-powered IC engine trucks in the upcoming year.
• May 2024- Germany and Italy are gathering support from other European Union members for a call to relax EU targets for lowering car CO2 emissions and review a 2035 ban on the sale of petrol and diesel models.
• May 2024- The Jaguar plant in the U.K. completed its last run of internal combustion vehicles, marking the end of an era as the British manufacturer intends to transition toward a fully-electric series by 2025.
• April 2023- Mercedes launched its new combustion engine model, namely sixth-generation E-Class series. The vehicle will be factory-made in Germany and China and will be available in the European market.
• March 2023- JCB Power Systems Ltd. Introduced a hydrogen combustion engine based on combustion technology that delivers modern advantages such as zero CO2 emissions at the point of use. The engine uses hydrogen fuel during the process, generating only steam without CO2 emissions.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service process, competitive landscape, and leading source of the engine. Besides, 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 contributed to the growth of the market in recent years.

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Report Scope and Segmentation