Smart Electric Drive Market
Smart Electric Drive Market Size, Share, Growth & Industry Analysis, By Component (EV Battery, Electric Motor, Inverter System, Others), By Drive (Front Wheel Drive, Rear Wheel Drive, All Wheel Drive), By Vehicle, By Application, and Regional Analysis, 2024-2031
Pages : 120
Base Year : 2023
Release : July 2024
Report ID: KR274
Smart Electric Drive Market Size
The Smart Electric Drive Market size was valued at USD 1,720.0 million in 2023 and is projected to grow from USD 2,257.8 million in 2024 to USD 18,506.9 million by 2031, exhibiting a CAGR of 35.06% during the forecast period. A notable shift toward autonomous vehicles and growing adoption of electric vehicle are driving the growth of the market.
In the scope of work, the report includes services offered by companies such as Magna International Inc., Continental AG, Schaeffler AG, BorgWarner Inc., Robert Bosch GmbH, Safran, ZF Friedrichshafen AG, AISIN CORPORATION, DENSO CORPORATION, NIDEC CORPORATION, and others.
The growing adoption of electric vehicles (EVs) is significantly boosting the demand for smart electric drive systems. As consumers and governments increasingly prioritize environmental sustainability, the transition toward EVs is accelerating. Electric vehicles, which produce zero tailpipe emissions, are playing an important role in the global effort to combat climate change and reduce air pollution.
- For instance, in 2023, according to the International Energy Agency (IEA), nearly 60% of new electric car registrations were in China, 25% in Europe, and 10% in the United States, collectively accounting for almost 95% of global sales. China witnessed 8.1 million registrations, Europe nearly 3.2 million, and the U.S. 1.4 million, totaling 14 million globally and increasing the global fleet to 40 million.
This transition necessitates advanced smart electric drive systems that enhance vehicle efficiency, performance, and safety. Smart electric drives integrate electric motors, power electronics, and battery management systems to optimize power usage and extend the range of vehicles. They further enable features such as regenerative braking, which recovers energy during deceleration. The continuous improvement and innovation in these systems are crucial for meeting the growing expectations of EV consumers.
Furthermore, the advancement in smart electric drive technology is making EVs more competitive with traditional internal combustion engine vehicles in terms of cost, performance, and convenience, thereby reinforcing market growth and prompting more consumers to switch to electric mobility.
Smart electric drives are advanced propulsion systems designed specifically for electric and hybrid vehicles. They integrate various components to enhance efficiency, performance, and reliability. These systems typically comprise electric motors, power electronics, battery packs, and control units. The electric motor converts electrical energy into mechanical energy to drive the vehicle, while power electronics manage the flow of electricity between the battery and the motor. The battery pack stores the electrical energy required for propulsion, and the control unit orchestrates the interaction between all components to ensure optimal performance.
Smart electric drives support various driving modes, including eco, sport, and regenerative braking, which enhances both vehicle efficiency and the overall driving experience. They are crucial for electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), and hybrid electric vehicles (HEVs). By integrating these components seamlessly, smart electric drives ensure smoother acceleration, better energy management, and reduced emissions, thus contributing to the broader adoption of electric and hybrid vehicles globally.
Analyst’s Review
In the rapidly evolving smart electric drive market, companies are strategically focusing on innovation and partnerships to strengthen their market position. Market growth is characterized by a surge in electric vehicle (EV) adoption, propelled by favorable government policies, technological advancements, and rising environmental awareness among consumers.
Furthermore, companies are engaging in strategic collaborations and acquisitions to expand their product portfolios and geographical reach. They are forging partnerships with automotive manufacturers, technology firms, and energy providers to develop integrated solutions that cater to the growing demand for electric mobility.
- For instance, in October 2023, Continental established a strategic partnership with Munich-based high-tech company DeepDrive to advance core technologies for electric vehicles. The collaboration focuses on jointly developing an integrated unit that combines drive and brake components, specifically designed for direct mounting on the vehicle wheel.
Additionally, key players are focusing on scaling production capabilities and optimizing supply chains to meet the increasing demand for smart electric drive systems. The imperatives for these companies include maintaining technological leadership, ensuring cost competitiveness, and addressing challenges related to battery technology and charging infrastructure. By maintaining agility and fostering innovation, companies are able to capitalize on the significant growth opportunities in the market.
Smart Electric Drive Market Growth Factors
The growing shift toward autonomous vehicles (AVs) is a significant factor aiding the expansion of the smart electric drive market, as these technologies complement and enhance one another. Autonomous vehicles rely heavily on sophisticated electric drive systems that provide the necessary precision and control for safe and efficient operation. The integration of smart electric drives in AVs enables seamless operation of complex functionalities such as adaptive cruise control, lane-keeping assistance, and automated parking. These systems further play a crucial role in managing energy consumption, optimizing battery usage, and extending the range of autonomous electric vehicles.
Moreover, as the development of autonomous technology progresses, the demand for reliable and efficient electric drive systems is expected to increase. Autonomous vehicles require robust and advanced propulsion systems that handle the high computational loads and ensure consistent performance under various driving conditions. The integration of smart electric drives with AVs is essential for leveraging the potential of autonomous mobility, which promises to revolutionize the transportation sector by enhancing safety, reducing traffic congestion, and lowering emissions.
High initial costs pose a notable challenge to the widespread adoption of smart electric drive systems, particularly affecting price-sensitive markets and segments. The development and production of advanced electric drive components, such as high-efficiency motors, power electronics, and sophisticated battery management systems, require significant investment. These costs are often passed on to consumers, making electric vehicles with smart drive systems more expensive than their internal combustion engine counterparts. This price disparity deters many potential buyers and hampers market penetration of electric vehicles.
However, this challenge is being mitigated through various strategies. Governments and policymakers are offering subsidies, tax incentives, and rebates to reduce the financial burden on consumers.
Additionally, advancements in technology are gradually lowering production costs, while economies of scale are expected to decrease prices as the market experiences growth. Furthermore, companies are focusing on optimizing their manufacturing processes and exploring cost-effective materials to make smart electric drives more affordable. Collaborations and partnerships within the industry are fostering innovation and facilitating sharing of resources, which contribute to efforts aimed at cost reduction.
Smart Electric Drive Market Trends
Artificial intelligence (AI) and internet of things (IoT) are increasingly being integrated into smart electric drive systems to significantly enhance their efficiency and performance. AI algorithms analyze vast amounts of data in real-time to optimize energy consumption, predict maintenance needs, and improve overall vehicle performance.
IoT connectivity allows these systems to communicate with other vehicles and infrastructure, enabling advanced functionalities such as predictive maintenance, remote diagnostics, and real-time monitoring. This integration facilitates more efficient energy management by adjusting power delivery based on driving conditions and battery status, thereby extending both the range and life of the vehicle's battery.
Additionally, AI and IoT enable continuous learning and adaptation, allowing drive systems to improve their performance over time through software updates. This trend is advancing the development of electric mobility by providing a seamless, intelligent, and responsive driving experience.
Segmentation Analysis
The global market is segmented based on component, drive, vehicle, application, and geography.
By Component
Based on component, the market is categorized into EV battery, electric motor, inverter system, and others. The EV battery segment captured the largest smart electric drive market share of 46.38% in 2023. The rapid increase in electric vehicle (EV) adoption has significantly boosted the demand for high-performance batteries, which are core components of EVs.
As more consumers and businesses transition to electric mobility, the need for efficient, long-lasting, and cost-effective batteries has surged. Advancements in battery technology, such as the development of lithium-ion and solid-state batteries, have greatly enhanced energy density, charging speed, and lifespan, making EVs more attractive to a broader market.
Additionally, significant investments by major automotive and technology companies in battery research and manufacturing capacity have accelerated innovation and production scale, thereby supporting segmental growth. Government incentives and subsidies for EV purchases, coupled with stringent emission regulations, have further played a crucial role in propelling the expansion of the EV battery segment.
By Drive
Based on drive, the market is classified into front wheel drive, rear wheel drive, and all-wheel drive. The all-wheel drive segment is poised to record a staggering CAGR of 36.63% through the forecast period. Consumer preference for vehicles that offer superior traction, stability, and performance in various driving conditions, including off-road and adverse weather, is significantly boosting demand for AWD systems. The increasing popularity of SUVs and crossovers, which often come equipped with AWD as a standard or optional feature, is significantly contributing to this growth.
Moreover, advancements in AWD technology, such as the integration of electric all-wheel-drive systems in electric and hybrid vehicles, are enhancing vehicle efficiency and performance, thereby fueling segmental expansion. Automakers are increasingly incorporating AWD systems to meet the rising consumer demand for safety and versatility. This trend is reflected in the growing number of AWD vehicle models available in the market.
Additionally, rising disposable incomes and a growing preference for premium vehicles in emerging markets are expected to bolster the demand for AWD vehicles, thus contributing to the growth of the segment.
By Vehicle
Based on vehicle, the smart electric drive market is divided into passenger cars, commercial vehicles, and 2-wheelers. The passenger cars segment garnered the highest revenue of USD 854.0 million in 2023. The increasing global demand for electric passenger cars, mainly due to rising environmental awareness and favorable government policies that promote clean energy transportation, has significantly aided to this notable growth. Innovations in electric vehicle (EV) technology, such as improved battery efficiency, extended driving ranges, and advanced safety features, have made electric passenger cars more appealing to consumers, thereby boosting sales.
Additionally, the expansion of charging infrastructure and the introduction of various incentives, such as tax rebates and subsidies for EV purchases, have led to the widespread adoption of electric passenger cars. Furthermore, the premium segment of passenger cars, including luxury EV models, has seen robust growth due to rising disposable incomes and a growing preference for high-end, environmentally friendly vehicles. Furthermore, strategic partnerships between automakers and technology companies to develop and market advanced electric passenger cars have played a pivotal role in the expansion of the segment.
Smart Electric Drive Market Regional Analysis
Based on region, the global market is classified into North America, Europe, Asia-Pacific, MEA, and Latin America.
Asia-Pacific smart electric drive market share stood around 36.08% in 2023 in the global market, with a valuation of USD 620.6 million. The rapid adoption of electric vehicles (EVs) in the region due to stringent government regulations and strong incentives for EV adoption has substantially increased the demand for smart electric drive systems. China, the largest EV market globally, has emerged as a major market, with extensive government support, massive investments in EV infrastructure, and a burgeoning middle-class population to adopt new technologies. The companies are focusing on the partnerships between the OEMs and local players to enhance the efficiency and performance of their products.
- For instance, in February 2024, BorgWarner commenced the production of eMotor rotors and stators for XPeng Motors, a prominent Chinese smart EV company. The HVH 220 eMotor, known for its high power, torque density, and efficiency at a competitive cost, is expected to be featured in the X9 MPV and XPeng's upcoming electric B-class sedan, with production scheduled to start in the third quarter of 2024. This partnership aims to bolster the durability and advancement of the China’s electric vehicle industry.
Furthermore, the presence of leading EV manufacturers and technology companies in the region has spurred innovation and development of advanced smart electric drive systems. Additionally, rising environmental awareness and consumer preference for sustainable transportation options are propelling regional market growth.
North America is poised to grow at a staggering CAGR of 35.30% in the forthcoming years. The region's robust automotive industry, coupled with significant advancements in electric vehicle (EV) technology, is contributing significantly to the smart electric drive market growth. The increasing adoption of EVs, propelled by favorable government policies, subsidies, and a growing network of charging infrastructure, is significantly boosting the demand for smart electric drive systems.
- For instance, in 2023, VinFast began selling electric SUVs in North America and is developing manufacturing facilities to leverage US Inflation Reduction Act (IRA) subsidies. With an investment of approximately USD 2 billion, VinFast aims to achieve an annual production capacity of 1.5 million vehicles in the United States by 2025.
Additionally, the presence of major companies that are at the forefront of innovation in smart electric drive technologies is leading to increased demand of electric drive. These companies are heavily investing in research and development to enhance the efficiency, performance, and affordability of electric drive systems. Furthermore, the rising environmental consciousness among consumers and the drive to reduce greenhouse gas emissions are facilitating the shift toward electric mobility. The region's strong economic conditions and high disposable incomes are further contributing to the rapid adoption of advanced EVs, thereby fueling the growth of the North America smart electric drive market.
Competitive Landscape
The global smart electric drive market report will provide valuable insight with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions. Manufacturers are adopting a range of strategic initiatives, including investments in R&D activities, the establishment of new manufacturing facilities, and supply chain optimization, to strengthen their market standing.
List of Key Companies in Smart Electric Drive Market
- Magna International Inc.
- Continental AG
- Schaeffler AG
- BorgWarner Inc.
- Robert Bosch GmbH
- Safran
- ZF Friedrichshafen AG
- AISIN CORPORATION
- DENSO CORPORATION
- NIDEC CORPORATION
Key Industry Developments
- June 2024 (Launch): Schaeffler showcased its expanded off-highway technology product lineup at iVT Expo Cologne 2024, a premier global trade show for industrial technology and vehicle components. The exhibition highlights systems for electrifying and digitalizing mobile agricultural, construction machinery, and materials handling technology. Schaeffler underscores its dedication to sustainability by advancing the shift toward a highly efficient and climate-neutral economy in the off-highway sector.
- January 2024 (Launch): Magna unveiled its next-generation 800V eDrive solution, setting new benchmarks in efficiency, power-to-weight ratio, and torque density. This drop-in solution integrates advanced technologies that reducing weight by 75 kg and size by 20%, while also enhancing performance, driving range, and sustainability, thereby offering superior flexibility over previous models.
- June 2023 (Partnership): Nidec Corporation collaborated with Renesas Electronics Corporation to develop semiconductor solutions for a next-generation E-Axle (X-in-1 system), which integrates EV drive motor and power electronics for electric vehicles (EVs). By leveraging Nidec’s motor technology and Renesas’ semiconductor expertise, the partnership aims to jointly create a highly reliable and high-performance proof of concept (PoC) for the X-in-1 system.
The global smart electric drive market is segmented as:
By Component
- EV Battery
- Electric Motor
- Inverter System
- Others
By Drive
- Front Wheel Drive
- Rear Wheel Drive
- All Wheel Drive
By Vehicle
- Passenger Cars
- Commercial Vehicles
- 2-Wheelers
By Application
- E-Wheel Drive
- E-Axle
By Region
- North America
- U.S.
- Canada
- Mexico
- Europe
- France
- UK
- Spain
- Germany
- Italy
- Russia
- Rest of Europe
- Asia Pacific
- China
- Japan
- India
- South Korea
- Rest of Asia Pacific
- Middle East & Africa
- GCC
- North Africa
- South Africa
- Rest of Middle East & Africa
- Latin America
- Brazil
- Argentina
- Rest of Latin America
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