Global Electric Vehicle (EV) Transmission Market Report and Forecast 2024-2032

Global Electric Vehicle (EV) Transmission Market Size

The global electric vehicle (EV) transmission market value reached a value of about USD 10.68 billion in 2023. The industry is further estimated to grow at a CAGR of 29.20% in the forecast period of 2024-2032 to reach a value of around USD 107.17 billion by 2032.

Electrification of Transport Systems and Stringent Emission Regulations to Propel the Electric Vehicle (EV) Transmission Market Growth

The growing demand for electric vehicles owing to the emerging need for a fuel-efficient economy and eco-friendly mobility is leading to the market expansion of electric vehicle transmission. In addition, the increasing production of electric vehicles by the market players is playing a crucial role in increasing the demand of electric vehicle (EV) transmission market. Also, the government initiatives to reduce carbon footprints are leading to strict implementation of emission rules and grants of subsidies to promote the faster adoption of electric vehicles, which is invigorating the market.

Moreover, the comfortable driving experience with no gear shift hustle offered by the automatic transmission system is significantly catalysing the development of the market for electric vehicle transmission. Additionally, the guidelines issued by governments worldwide to develop the charging infrastructure for electric vehicles are contributing to the steady growth of the electric vehicle (EV) transmission market. Further, the technological advancement in the automotive sector is leading to the introduction of changing transmission systems which are expected to augment the market for electric vehicle transmission in the forecast period.

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Industry Outlook

According to IEA, the number of new electric cars sold globally has seen a substantial increase from 2010 to 2023. The global sales of electric cars surged from negligible figures in 2010 to nearly 12 million units by 2023. China has emerged as the leading market, with sales rising sharply, especially post-2015, reaching significant volumes in 2023. The European Union also witnessed a robust growth trajectory, following a consistent upward trend, and the United States displayed a steady increase in sales, albeit at a lower volume compared to China and the EU. This data underscores a global shift towards electric vehicles, driven by policy incentives, advancements in technology, and increasing environmental awareness. This shift has also promoted the growth of the electric vehicle (EV) transmission industry.

Additionally, registrations of electric cars have increased from around 1 million in 2015 to approximately 15 million in FY 2023, which indicates an upward trend of growth. In China, the e-car registrations soared from 0.3 million in 2015 to more than 8 million in 2023, thereby expanding the country’s market share. Europe has also experienced a significant rise in EV registrations, with numbers increasing from around 0.2 million in 2015 to approximately 4 million in 2023. Meanwhile, in the United States, registration rate grew steadily from 0.1 million vehicles registered in 2015 to over 1 million in 2023. Among European countries, Germany led the growth as the registrations increased from 0.1 million in 2015 to nearly 1 million in 2023, showing a positive year-on-year growth. France, Netherlands, and the United Kingdom also saw notable increases in electric car registrations during this period. These trends in vehicle registrations have affected the overall electric vehicle (EV) transmission industry revenue as well.

As per the International Energy Agency (IEA), in 2023, the global stock of fuel cell electric vehicles (FCEVs) and hydrogen refueling stations (HRS) was prominently distributed across various regions. Korea and China lead in the share of FCEVs, with Korea holding 60%, China at 30%, and the United States and Japan each around 5%. Specifically, Korea has approximately 52,560 FCEVs, followed by China with around 26,280. As per electric vehicle (EV) transmission industry analysis, the stock of HRS is dominated by China with around 448 stations, followed by Korea with approximately 224 stations, Japan with 112 stations, and the United States with around 112 stations. The breakdown of FCEV stock by region and mode reveals that the majority are passenger light-duty vehicles (PLDVs), with Korea having the highest number at around 60,000. Light commercial vehicles (LCVs) have around 10,000 units, buses, and trucks each have smaller portions, with buses around 5,000 units and trucks approximately 4,000 units, with notable contributions from the United States and Germany.

Increasing EV Adoption Driving Transmission Demand

• Rising EV Adoption Boosts Demand: Increasing global adoption of electric vehicles is a key driver for the electric vehicle (EV) transmission demand growth.

• Supportive Government Policies: Favorable policies, subsidies, and incentives are propelling electric vehicle penetration.

• Technological Innovations Enhance Efficiency: Ongoing advancements in transmission systems are improving EV efficiency and range.

• Regulatory Environment Favors EVs: Stringent emission norms are creating a regulatory environment conducive to electric vehicle growth.

Challenges of High Initial Costs and Infrastructure Gaps

• Consumer Confidence Challenges: Range anxiety and perceived limitations in EV range impact consumer adoption rates, and hence the electric vehicle (EV) transmission demand forecast.

• Cost Barriers to Adoption: Higher initial costs for EVs, including transmissions, present barriers to widespread adoption.

• Infrastructure Limitations: Insufficient charging infrastructure remains a hurdle for broader EV adoption.

• Dependency on Battery Technology: EV performance is closely tied to advancements in battery technology, posing risks.

Expanding Charging Networks and Technological Advancements Fuel Opportunities

• Expansion of Charging Infrastructure: Growing investment in charging networks is expanding market accessibility and providing electric vehicle (EV) transmission market opportunities.

• Advancements in Battery Tech: Continued improvements in battery efficiency and capacity enhance EV performance.

• Emerging Market Potential: Increasing interest in EVs from emerging markets presents growth opportunities.

• Collaboration and Partnership: Strategic partnerships between stakeholders can drive innovation in the market.

Competitive Pressures, Supply Chain Risks, and Regulatory Changes as Potential Risks

• Supply Chain Vulnerabilities: Dependency on critical materials and components for EV production poses supply chain risks.

• Policy and Regulatory Shifts: Changes in government policies and incentives could impact electric vehicle (EV) transmission market dynamics and trends.

• Consumer Perceptions and Preferences: Shifting consumer attitudes and preferences towards EVs versus conventional vehicles influence market adoption rates.

Electric Vehicle (EV) Transmission Market Trends

As electric vehicles gain prominence, manufacturers are increasingly focusing on reducing the weight of single and multiple speed transmission systems. Due to this, manufacturers in electric vehicle (EV) transmission market are seeking materials and designs that reduce the total weight of EV transmissions, improves vehicle efficiency, and extends the driving range without compromising on quality and performance. Moreover, innovations in the market like dual motor transmission systems, e-axles, and two-speed transmission setups are helping manufacturers in improving overall vehicle performance and saving energy costs.

Recent Developments

In June 2024, Ansys launched a software-as-a-service (SaaS) solution, named ConceptEV. This solution was designed to optimise the development of electric vehicle (EV) powertrains system, which includes the battery, inverter, motor, and transmission. This launch helps improve EV driving range, reduces battery charging times, and lowers development costs.

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Global Electric Vehicle (EV) Transmission Industry Segmentation

The electric vehicle transmission system transfers the power generated in an electric motor to a drive wheel through the gearbox. There are two types of transmission systems in electric vehicles. The single-speed transmission uses only one gear pair for transmission, while the multi-speed transmission helps achieve two different gear ratios.

The market for electric vehicle transmission, by type, is divided into:

• Single-Speed Transmission

• Multi-Speed Transmission

Based on vehicle, the market is classified into:

• Battery Electric Vehicle (BEV)

• Plug-in Hybrid Electric Vehicle (PHEV)

• Hybrid Electric Vehicle (HEV)

• Others

Based on transmission system, the market is segmented into:

• Automated Manual Transmissions

• Continuously Variable Transmission

• Automatic Transmission 

• Dedicated Hybrid Transmission/Dual Clutch Transmission

The regional markets for electric vehicle transmission can be divided into North America, Europe, the Asia Pacific, Latin America, and the Middle East and Africa.

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Electric Vehicle (EV) Transmission Market Share by Transmission Type

Based on transmission type, the single-speed transmission is expected to bolster the market for electric vehicle transmission. The expanding use of single-speed transmission systems in the popular model electric vehicles is driving the electric vehicle transmission market development. Manufacturers are widely adopting the single-speed transmission system due to its cost-effectiveness, thereby fuelling the market growth. In addition, the system reduces the volume, energy loss, and drivetrain mass, so it occupies less space.

Moreover, it offers high-performance vehicles with a less complex gear system and generates instant torque when coupled with a motor, which is why electric vehicle (EV) transmission demand is rising. The multi-speed transmission system is also expected to drive the market in the forecast period due to its ability to achieve the top speed of a vehicle and keep the electric motor efficient during the operation of electric vehicles. The introduction of multi-gears in electric vehicles for dynamic performance is likely to aid the market for the multi-speed transmission system.

Global Electric Vehicle (EV) Transmission Market Competition

Prominent companies are investing significantly in research and development to innovate and enhance the efficiency and performance of EV transmissions.

Technological Advancements and Innovation

• Continuous advancements in EV transmission technologies, including the development of multi-speed transmissions, are driving competition in electric vehicle (EV) transmission market.

• Companies are focusing on improving transmission efficiency to extend the range and performance of electric vehicles.

Strategic Partnerships and Collaborations

• Leading players are forming strategic partnerships with automotive manufacturers to co-develop and integrate cutting-edge transmission systems in new EV models.

• Collaborations with technology firms for software and control system integration are also prominent, enhancing transmission system capabilities.

Market Expansion and Penetration

• Key players are expanding their presence in emerging electric vehicle (EV) transmission markets, particularly in Asia-Pacific, to tap into the growing demand for electric vehicles.

• Establishing manufacturing facilities and strengthening distribution networks in these regions is a strategic focus for market leaders.

Competitive Pricing and Cost Reduction

• Companies are striving to reduce production costs and offer competitively priced transmission systems to attract more automotive manufacturers.

• Economies of scale and advancements in manufacturing processes contribute to cost reduction strategies.

Focus on Sustainability and Efficiency

• A key trend in electric vehicle (EV) transmission market is the focus of market players on using eco-friendly materials and energy-efficient manufacturing processes.

• Enhancing the energy efficiency of transmission systems to support the overall sustainability goals of electric vehicles is a key competitive strategy.

Product Differentiation and Customisation

• Differentiating products through unique features such as enhanced durability, compact design, and improved thermal management can shape electric vehicle (EV) transmission market outlook.

• Offering customised transmission solutions to meet specific requirements of different EV models and segments adds a competitive edge.

Regulatory Compliance and Standards

• Adherence to stringent regulatory standards for emissions and energy efficiency is crucial for market players.

• Companies invest in ensuring that their transmission systems meet global regulatory requirements, enhancing their market credibility and acceptance.

Competitive Landscape of Global Electric Vehicle (EV) Transmission Market

The comprehensive EMR report provides an in-depth assessment of the market based on the Porter's five forces model along with giving a SWOT analysis. The report gives a detailed analysis of the following key players in the global electric vehicle (EV) transmission market, covering their competitive landscape, capacity, and latest developments like mergers, acquisitions, and investments, expansions of capacity, and plant turnarounds:

• Aisin Corporation

• AVL List GmbH

• BorgWarner Inc.

• Allison Transmission, Inc

• Eaton Corporation plc

• ZF Friedrichshafen AG

• Others

Electric Vehicle (EV) Transmission Market Regional Analysis

The expanding production and sales of advanced electric vehicles, particularly in countries such as China, India, and Japan, along with the increasing purchasing power of the middle-class population in the Asia Pacific region, is providing impetus to the electric vehicle transmission market expansion.

Moreover, India is taking measures for promoting green economy, such as Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) scheme, Production Linked Incentive (PLI) Scheme, High-Speed Regional Mobility Projects, Railways' Net-Zero Emission Pledge, and several other policies related to fuel standards, low-emission zones, and zero-emission vehicle requirements. This emergence of stringent government regulations in India to promote green transportation is expanding electric vehicle (EV) transmission market share in India.

Key Highlights of the Report

Electric Vehicle (EV) Transmission Market Report Snapshots

Electric Vehicle (EV) Transmission Market Size

Electric Vehicle (EV) Transmission Market Growth

Electric Vehicle (EV) Transmission Market Trends

Electric Vehicle (EV) Transmission Market Share

Electric Vehicle (EV) Transmission Companies

Electric Vehicle (EV) Transmission Market Regional Analysis