The global vehicle electrification market was valued at USD 89.26 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 9.9% from 2023 to 2030. This growth is largely driven by the automotive industry's increasing demand for alternatives to petroleum-based fuel and various government initiatives promoting environmentally sustainable transportation globally. Many governments are introducing green initiatives, while environmental agencies are setting ambitious targets for reducing emissions worldwide. At the same time, eco-conscious consumers are progressively adopting electric vehicles (EVs), which contributes to reducing their overall carbon footprint. Consequently, the demand for vehicle electrification products is expected to rise significantly during the forecast period. Additionally, vehicle electrification offers numerous advantages such as improved vehicle performance, added features, reduced vehicle weight, lower emissions, better fuel economy, and enhanced driving comfort and safety. These factors are expected to drive market expansion.
The COVID-19 pandemic had a substantial impact on the automobile sector. Factory closures due to global lockdowns and travel restrictions disrupted supply chains, operations, capital investments, and long-term strategies. As a result, manufacturers of vehicle electrification technology were under pressure to adapt their business models to cope with the financial challenges and uncertainty posed by the pandemic.
Despite the financial strain and delays in new vehicle programs, including electric vehicles, the automobile industry's push towards electrification remains robust. Moreover, the rising demand for cost-effective solutions and the growing trend of electrifying commercial vehicles and fleets are anticipated to present significant opportunities for market growth during the forecast period.
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Product Insights
The electric vacuum pump segment held the largest revenue share, at 13.3%, in 2022 and is projected to grow at the fastest compound annual growth rate (CAGR) of 12.4% over the forecast period. This growth is fueled by ongoing technological advancements in the automotive industry aimed at improving fuel efficiency by enhancing engine energy performance. Electric vacuum pumps play a critical role in modern vehicles by providing the necessary vacuum required for brake boosters, enabling automakers to meet increasingly stringent emission standards. Their ability to offer consistent and smooth brake-pedal performance has contributed to their rising demand. As vehicles transition toward more energy-efficient solutions, electric vacuum pumps have become an integral component, helping reduce fuel consumption while maintaining the performance and safety features expected by consumers. This technological innovation has become a key focus for automakers looking to comply with global environmental regulations while also delivering a superior driving experience.
In addition to electric vacuum pumps, the electric power steering (EPS) segment is expected to see significant growth in the coming years, with a projected CAGR of 7.2% during the forecast period. Consumers and manufacturers are increasingly favoring EPS over traditional hydraulic power steering (HPS) systems due to its multiple benefits. One of the primary advantages of EPS is its superior energy efficiency. Unlike HPS, which relies on hydraulic fluids and mechanical components, EPS operates using electric motors, reducing the vehicle's overall energy consumption and making it a more sustainable option. Additionally, EPS systems are smaller, lighter, and more adaptable than their hydraulic counterparts, contributing to a vehicle’s overall weight reduction and subsequently improving fuel economy.
Another important factor driving the growth of the EPS segment is the reduction in mechanical complications compared to hydraulic systems. HPS systems, while reliable, involve complex mechanical parts that are prone to wear and require regular maintenance. In contrast, EPS eliminates the need for such components, resulting in a more reliable and low-maintenance option for both manufacturers and vehicle owners. This lack of mechanical complexity not only reduces production costs but also enhances the long-term reliability of vehicles equipped with EPS. As a result, automakers are increasingly incorporating EPS into their designs to meet consumer demand for more energy-efficient and reliable vehicles.
Furthermore, the customizable nature of EPS systems has also contributed to their growing popularity. Unlike HPS, which is more rigid in its design, EPS allows for a more straightforward and flexible interface that can be easily integrated into a variety of vehicle platforms. This versatility makes EPS an attractive choice for automakers seeking to simplify production processes while enhancing vehicle performance. The ability to adjust steering inputs and responses electronically has opened the door to new levels of customization, allowing automakers to fine-tune the driving experience for different models and consumer preferences.
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