EV Transmission Market Size, Trends and Growth Analysis by 2027

The global electric vehicle (EV) transmission market was valued at approximately US$ 2,236.4 million in 2019 and is projected to experience a compound annual growth rate (CAGR) of 14.0% from 2020 to 2027, reaching an estimated US$ 3,860.7 million by the end of the forecast period.

In addition to the traction motor, the transmission or gearbox plays a vital role in the power performance of electric vehicle systems. For electric vehicles to navigate effectively, they must generate sufficient driving force to counteract road load. The performance metrics of acceleration and maximum speed can be analyzed through the wheel axle driving force curve in conjunction with the road load curve.

Research indicates that multi-speed transmissions, which feature varying gear ratios, can significantly enhance the operational range of the motor. This allows for substantial torque at lower speeds while enabling high rotational speeds at elevated velocities. Consequently, electric vehicles equipped with multi-speed transmissions demonstrate superior road load resistance compared to those utilizing a single-ratio gearbox. This capability not only reduces the power demands on the motor but also improves overall vehicle performance, making transmission systems a preferable option for enhancing electric vehicle efficiency.

Despite the numerous benefits associated with heavy-duty electric vehicles, such as buses and trucks, several challenges may hinder their widespread adoption, thereby impacting the growth of the EV transmission market in the near future. The initial development phase of heavy-duty electric vehicles often results in significantly higher upfront costs compared to traditional diesel and natural gas vehicles. Given that buses and trucks are typically procured in bulk by government entities and private contractors, pricing becomes a critical factor influencing purchasing decisions, potentially overshadowing the push for cleaner energy vehicles. Many municipalities operate within fixed budgets, which may deter them from investing in more expensive electric buses and trucks. Therefore, robust government support is essential to facilitate increased adoption rates. Innovative financing options, such as leasing arrangements, alongside efforts to lower the overall costs of electric vehicles and their battery systems, could promote greater acceptance in the coming years.

Another significant concern for manufacturers is the scalability of electric buses and trucks, as many major contracts for these vehicles are contingent upon national and regional grants. This reliance on grants is not a sustainable long-term solution. Thus, reducing the initial costs of these vehicles is expected to be crucial for their future adoption, as well as for the EV transmission systems throughout the 2020 to 2027 forecast period.

The Asia-Pacific (APAC) region is anticipated to be a key driver of growth in the EV transmission market, fueled by the presence of rapidly developing countries, increased technology adoption, the integration of advanced automation solutions, and heightened industrialization. Other emerging regions, such as the Middle East and Africa (MEA) and South America (SAM), are also expected to witness steady growth, driven by government initiatives aimed at digitizing economies through the adoption of advanced technologies across various sectors, including consumer electronics, automotive, aerospace, and food and beverages.

Transportation is a leading source of pollution globally, with heavy-duty vehicles like trucks and buses being significant contributors. To combat this issue, governments in major nations, including the United States, the United Kingdom, Germany, Japan, and China, are implementing measures to accelerate the adoption of electric buses and trucks. The superior efficiency of electric trucks and buses compared to conventional diesel and natural gas vehicles is another factor likely to propel growth in this segment in the coming years. As this sector is still in its early growth stages, it is expected to experience remarkable expansion, driven by the global push for the electrification of the transportation sector. China stands out as a leader in this movement, boasting the largest electric bus market, followed closely by Europe and the United States. According to BloombergNEF's Electric Vehicle Outlook 2019, it is projected that within the next two decades, electric vehicles in the light commercial vehicle (LCV) category will account for approximately 56%, including light trucks and vans, while medium commercial electric vehicles will reach 31% in the US, China, and Europe. The future production of these heavy electric vehicles will depend on various factors, including advancements in fuel efficiency, energy costs, emission reductions, and decreasing battery and alternative fuel costs. With the rapid evolution of electric vehicle technology, improvements in battery performance, and a favorable regulatory landscape, the demand for electric buses, trucks, and other heavy-duty electric vehicles is expected to grow significantly, presenting substantial opportunities for EV transmission system providers during the 2019 to 2027 forecast period.

Key players in the EV transmission market include established companies such as Hewland Engineering Ltd, Borgwarner Inc., Continental AG, Porsche AG, Dana Limited, Eaton, and ZF Friedrichshafen AG.

The overall size of the global EV transmission market has been determined through a combination of primary and secondary research methods. The research process begins with comprehensive secondary research utilizing both internal and external sources to gather qualitative and quantitative data related to the global EV transmission landscape. This includes an overview and forecast based on various regional segments. Additionally, primary interviews with industry participants and experts are conducted to validate the data and analysis. Participants typically include industry professionals such as vice presidents, business development managers, EV transmission intelligence managers, and national sales managers, as well as external consultants like valuation experts, research analysts, and key opinion leaders specializing in the EV transmission sector.