United States Vehicle Electrification Market 2031 | Growth Drivers, Key Players & Investment Opportunities

Market Size and Growth

The Global Vehicle Electrification Market is expected to grow at a CAGR of 11.3% during the forecast period (2024-2031).

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Key Development:

United States: Recent Industry Developments

✅ In December 2025, the United States Postal Service began deploying thousands of new electric delivery vehicles as part of its modernization program. The rollout supports a shift toward cleaner fleets and nationwide charging-infrastructure expansion. The initiative marks one of the largest recent EV deployments in the country.

✅ In November 2025, Toyota opened its new battery manufacturing plant in North Carolina, beginning production for EV and hybrid battery systems. The company also confirmed a major multi-year expansion plan to boost U.S. electrified-vehicle production. This strengthens domestic EV supply capabilities.

✅ In November 2025, Subaru revised its U.S. electrification roadmap by reducing near-term EV commitments and shifting more resources toward hybrid models. The decision reflects evolving consumer demand trends and strategic recalibration. It highlights a broader adjustment in EV investment planning.

✅ In November 2025, Honda scaled back its global electrification investments, impacting planned EV-related activities in the U.S. and other regions. The company indicated it will prioritize hybrid and alternative powertrains in the near term. This move underscores ongoing uncertainty in short-term EV market demand.

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Japan: Recent Industry Developments

✅ In November 2025, Toyota again postponed construction of its planned EV battery facility in Fukuoka, pushing back original timelines due to reassessment of market demand. The delay reflects a strategic shift as the company evaluates investment priorities. It marks another pause in Japan's domestic battery-manufacturing expansion.

✅ In November 2025, Subaru officially scaled down its EV investment plan after previously committing significant funding for electrification. The revised roadmap redirects focus to hybrid and conventional powertrains. This adjustment highlights changing industry sentiment around Japan's EV transition pace.

✅ In November 2025, multiple Japanese automakers, including Honda and Subaru, announced recalibration of their EV strategies amid slower global demand. Companies are delaying or reducing near-term EV programs while exploring diversified powertrain options. The shift represents a broader reset in Japan's electrification ambitions.

✅ In November 2025, industry assessments indicated rising competitive pressure on Japanese EVs as foreign imports strengthened their position in the domestic market. This trend has encouraged local OEMs to reconsider aggressive EV targets and adjust deployment timelines. It reflects evolving dynamics in Japan's electrified-vehicle environment.

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Key Players:

=> Borgwarner, Bosch, Continental, Delphi, Denso, Johnson Controls, Johnson Electric.

Key Segments:

By Product Type

Alternators lead with 15% share, driven by their critical role in power generation and energy management across hybrid and internal combustion vehicles. Actuators account for 12%, supported by growing integration in electric and hybrid drivetrains for improved vehicle efficiency. Electric air conditioner compressors hold 10%, fueled by rising adoption of electrified HVAC systems in passenger and commercial vehicles. Electric oil pumps represent 8%, reflecting their use in engine efficiency and hybrid vehicle applications. Electric power steering (EPS) accounts for 12%, driven by the demand for lightweight, energy-efficient steering systems. Electric vacuum pumps hold 5%, supporting braking systems and emissions control. Electric water pumps represent 8%, reflecting engine cooling and thermal management requirements. Integrated starter generators (ISG) account for 10%, used in start-stop systems and mild hybrid applications. Liquid heater PTCs hold 5%, supporting cabin heating in EVs and hybrids. Start-stop systems represent 8%, reflecting fuel efficiency and emission reduction initiatives. Starter motors account for 7%, used across conventional and hybrid vehicle platforms.

By Vehicle Type

Passenger vehicles dominate with 65% share, fueled by increasing adoption of hybrid and electric vehicles, urban mobility trends, and OEM electrification initiatives. Light commercial vehicles hold 35%, supported by fleet electrification, delivery vehicles, and corporate sustainability programs.

By Degree of Hybridization

Hybrid electric vehicles (HEVs) lead with 30% share, driven by transitional adoption, fuel efficiency benefits, and emission reduction policies. Plug-in hybrid electric vehicles (PHEVs) account for 20%, supported by combined electric and ICE range capabilities. Battery electric vehicles (BEVs) hold 25%, fueled by zero-emission incentives, urban EV adoption, and infrastructure growth. 48 V vehicles represent 15%, reflecting mild-hybrid integration for enhanced efficiency and reduced emissions. Internal combustion engine (ICE) & micro-hybrid vehicles account for 10%, supported by low-cost hybridization solutions and emerging market adoption.

By Region

Asia Pacific - 40% Share
Asia Pacific leads with 40%, driven by strong EV and hybrid vehicle adoption in China, Japan, India, and Southeast Asia, supported by government incentives and local manufacturing.

North America - 25% Share
North America holds 25%, fueled by U.S. and Canadian electrification policies, hybrid vehicle penetration, and growing OEM investments in EV components.

Europe - 20% Share
Europe accounts for 20%, supported by stringent emission norms, fleet electrification, and growing HEV and PHEV adoption in Germany, France, U.K., Italy, Spain, and neighboring regions.

Latin America - 7% Share
Latin America holds 7%, driven by rising adoption of passenger HEVs, commercial vehicle electrification, and infrastructure development in Brazil, Mexico, and surrounding countries.

Middle East & Africa - 8% Share
The Middle East & Africa represent 8%, supported by pilot EV and hybrid programs, fleet electrification, and government initiatives in GCC countries, South Africa, and other emerging markets.

FAQ

Q: What is the growth rate of the Vehicle Electrification Market?

A: The market is projected to expand at a compound annual growth rate (CAGR) of 11.3% during the forecast period from 2024 to 2031.

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