Vehicle Electrification Market Size to Reach USD 245.66 Billion by 2033 | Rising EV Adoption and 48V Architecture to Drive Growth, Says Straits Research

According to the latest report published by Straits Research, the global Vehicle Electrification Market size was valued at USD 108.01 billion in 2024 and is projected to grow from USD 118.33 billion in 2025 to USD 245.66 billion by 2033, expanding at a CAGR of 9.56% during the forecast period (2025-2033).

The increasing electrification of vehicles is transforming the global automotive industry, driven by rising automobile production, stringent emission regulations, and the growing demand for fuel-efficient mobility solutions. Electrification helps reduce vehicle pollution, enhance fuel efficiency, and lower component weight, improving vehicle performance and operational efficiency.

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Key Market Drivers

Growing Number of Charging Stations Fuels Market Growth

The continuous expansion of EV charging infrastructure, supported by government financial incentives and investments in public and private charging networks, is a major factor driving the global vehicle electrification market. Electric vehicles offer lower operating costs compared to conventional ICE-powered vehicles, further encouraging adoption.

Rising Demand for 48V Architecture

The adoption of 48V mild-hybrid systems is rapidly gaining traction due to their cost-effectiveness and fuel efficiency. Although full hybrid systems deliver higher fuel savings, the 48V architecture provides an attractive middle ground by combining efficiency with affordability. This trend is expected to accelerate market demand as OEMs increasingly favor mild-hybrid solutions to meet emission targets.

Stringent Government Emission Regulations

Governments worldwide are enforcing strict vehicle emission standards to reduce environmental impact. Many countries are introducing tax exemptions and purchase incentives to promote hybrid and electric vehicles, encouraging automakers to develop cleaner technologies.

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Market Restraints

Despite promising growth, achieving and maintaining an optimal power-to-weight ratio remains a key challenge. Automakers are investing in lightweight materials and innovative products like e-CVTs and e-axles to improve performance efficiency, but these technologies are still in early stages of mass adoption.

Market Opportunities

Commercial Vehicle Electrification to Offer Lucrative Growth Opportunities
With growing urbanization and increasing pressure on transportation infrastructure, the demand for electric buses and trucks is rising. Governments are offering tax breaks and incentives to promote electric public transport and logistics vehicles. OEMs such as Mercedes-Benz, BYD, and Tata Motors have already launched electric models like the BYD K9 and Tata Starbus Hybrid, signaling a shift toward commercial vehicle electrification.

This trend presents major opportunities for component manufacturers and e-drive system developers to design efficient and lightweight drivetrains for high-performance commercial vehicles.

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Regional Insights

Asia-Pacific dominates the global market and is expected to maintain its lead throughout the forecast period. Government initiatives in China, India, and South Korea, including tax exemptions and EV promotion programs, are propelling regional growth.

Europe holds the second-largest share due to early adoption of hybrid technologies and strong regulatory frameworks promoting emission-free vehicles. Meanwhile, North America is projected to grow steadily, driven by charging infrastructure expansion and substantial OEM investments. For example, General Motors plans to launch 30 electrified vehicles by 2025, with two-thirds targeted at the North American market.

Product Insights

The market is segmented by product into Start/Stop Systems, Electric Power Steering, Electric Vacuum Pumps, Electric Air Conditioner Compressors, Electric Oil Pumps, Electric Water Pumps, Starter Motors & Alternators, Integrated Starter Generators, and Actuators.

Among these, the Electric Power Steering (EPS) segment held a notable market share of around 12% in 2021. EPS systems offer improved fuel efficiency, reduced mechanical issues, and greater design flexibility compared to traditional hydraulic steering.

The Electric Vacuum Pump segment is expected to witness significant growth due to its ability to enhance brake performance and comply with evolving fuel-efficiency standards.

For more insights and detailed analysis on the Market, visit : https://straitsresearch.com/report/vehicle-electrification-market

Hybridization Insights

Based on hybridization, the market is categorized into Internal Combustion Engine (ICE) & Micro-Hybrid Vehicle, HEV, PHEV, and BEV.
The ICE segment accounted for the largest share (approximately 60%) in 2021, primarily due to limited global EV infrastructure and rising demand in sectors such as agriculture and construction.

However, the Plug-in Hybrid Electric Vehicle (PHEV) segment is expected to register the fastest growth, supported by government initiatives for smart cities, increased charging station networks, and global efforts to reduce fossil fuel dependency.

Key Players

Mitsubishi Electric Corporation
Robert Bosch GmbH
TRW Automotive Holdings
Continental AG
JTEKT Corporation (Toyota Group)
Denso Corporation (Toyota & Toyota Industries)
Nexteer (Pacific Century Motors)

More Related Reports :

Military Vehicle Electrification Market : https://straitsresearch.com/report/military-vehicle-electrification-market

Hydraulic Fracturing Dual Engine Systems Market : https://straitsresearch.com/report/hydraulic-fracturing-dual-engine-systems-market

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