Vehicle Electrification Market Size to Surpass USD 419.55 Billion by 2034

The vehicle electrification market size is expected to surpass around USD 419.55 billion by 2034 growing from USD 128.06 billion in 2024, at a CAGR of 12.6%.

Vehicle Electrification Market Key Points

• The Asia-Pacific region led the global market with the largest market share of 47% in 2024.
• North America is projected to grow at a CAGR of 10.9% during the forecast period.
• By hybridization, the ICE segment accounted for 61% of the revenue share in 2024.
• The PHEV segment is expected to grow at a CAGR of 14.7% over the forecast period.
• By product, the electric power steering (EPS) segment captured 12.5% of the revenue share in 2024.
• The electric vacuum pump segment is projected to grow at a CAGR of 12.4% over the forecast period.

How AI is Revolutionizing Vehicle Electrification

AI is playing a pivotal role in vehicle electrification by enhancing battery management, optimizing energy efficiency, and enabling advanced features such as autonomous driving. AI algorithms help predict battery performance, manage charging cycles, and extend battery life, while also ensuring efficient energy distribution between the motor and battery. Additionally, AI supports the integration of autonomous driving technologies by processing real-time data from sensors, enhancing safety, and improving vehicle performance.

Moreover, AI enables predictive maintenance, helping detect potential issues before they occur and reducing repair costs. It also plays a crucial role in smart charging infrastructure by predicting demand and optimizing charging schedules. In vehicle-to-grid (V2G) systems, AI enhances energy flow between electric vehicles and power grids, promoting sustainability. Overall, AI drives the adoption of electric vehicles by improving their efficiency, reliability, and user experience.

 Market Scope

Segments Covered

By Product insights

Electric Power Steering (EPS):

• Witnessed high demand in 2024 and is expected to grow significantly during the forecast period.
• Benefits: Enhanced fuel economy in conventional ICE vehicles, extra comfort for the driver.
• Most preferred steering system over Hydraulic Power Steering (HPS) due to being lighter, smaller, and computer-controlled, leading to energy efficiency.

Electric Oil Pump:

• Exhibits the fastest growth over the forecast period.
• Benefits: Effective mechanical integration, equal distribution of oil to required engine parts and other vehicle components.

By Hybridization insights

Internal Combustion Engine (ICE) & Micro-Hybrid Vehicle:

• Dominated the global vehicle electrification market in 2024 and is expected to witness substantial growth.
• Features: Electric motor furnished with an ICE that shuts down immediately when the vehicle stops or brakes.
• Electric motor replaces conventional alternators and starters, improving fuel economy by reducing fuel consumption.

Plug-in Hybrid Electric Vehicle (PHEV):

• Registered the highest growth over the analysis period.
• Key Factors: High fuel efficiency, low maintenance, and operational costs.
• Integration of electric engine with ICE provides long driving range and flexible fuel refilling or recharging options.
• Government norms related to decarbonization, and environmental safety propel demand.

Regional Outlook of Vehicle Electrification Market

Asia Pacific:

• Market size estimated at USD 60.19 billion in 2024 and projected to reach around USD 197.19 billion by 2034.
• CAGR of 12.8% from 2024 to 2034.
• Emerges as the market leader with a prominent revenue share in 2024.
• Drivers: High demand for vehicle supplements in China and India, rising per capita income, increasing population, rapid adoption of green transportation and battery-powered vehicles (BEV, HEV, PHEV).

Europe:

• Holds the second-largest position in the global vehicle electrification market in terms of revenue.
• Growth supported by government focus on sustainable development in infrastructure in countries like France, Germany, the UK, and Italy.

Vehicle Electrification Market Companies

• Continental
• Valeo
• Robert Bosch GmbH
• Denso
• Mitsubishi Electric Corporation
• Johnson Electric
• Delphi Automotive PLC