Automotive Thermal Management Market Size, Share & Trends Analysis Report By Application (Engine Cooling, Cabin Thermal Management, Transmission Thermal Management, Waste Heat Recovery/Exhaust Gas Recirculation Thermal Management, Battery Thermal Management, Motor and Power Electronics Thermal Management), By Vehicle Type (Passenger Car, Commercial Vehicle) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

 The global automotive thermal management market was valued at USD 94.23 billion in 2023. It is expected to reach USD 162.26 billion in 2032, growing at a CAGR of 6.21% over the forecast period (2024-32). The shift towards electric vehicles (EVs) has significantly increased the demand for efficient thermal management systems. EVs require sophisticated cooling and heating mechanisms to maintain battery performance, extend range, and ensure optimal operation of electric motors and power electronics. This demand drives the development of advanced thermal management solutions tailored to the unique requirements of electric drivetrains.

To comply with government regulations, automakers are employing new powertrain technologies. Thermal management techniques can improve the efficiency of the powertrain and the passenger comfort system, which are crucial for implementing powertrain technologies such as start-stop and coasting systems. A thermal management system involves the technical regulation of temperature. The foundation of this technology is thermodynamics and heat transfer. Thermal management is a broad term that encompasses a variety of heat transfer processes, including conduction, convection, and radiation. Industrial and mechanical systems, buildings, structures, and even human bodies regulate temperature through heat transfer.

Miniaturization and systems integration are at the forefront of automotive electronics design, driven by the demand for vehicles with greater fuel efficiency, enhanced safety, seamless connectivity, and autonomous capabilities. Consequently, the design of circuits has evolved to meet the demand for greater energy output. As electronic components shrink and energy density increases, thermal management becomes a concern. Since smaller devices have a less available surface area to act as heatsinks, dissipating heat from these systems remains a challenge from an operational and safety standpoint. Thermal management is an evolving subfield of vehicle design that employs advanced thermal interface materials (TIMs) to improve heat transfer away from circuits.

Market Dynamics

Global automotive thermal management market drivers

Demand for luxurious vehicles, implementation of strict regulations, and integration of smart thermal management solutions

High safety standards and cutting-edge features are standard in luxury vehicles. They are designed to provide amenities like heated and cooled comfortable seats, airbags, and heated steering. The demand for luxury vehicles has increased due to discretionary income and improved living standards. The market for automotive thermal systems is anticipated to rise due to manufacturers integrating advanced thermal systems into high-end vehicles to increase performance and fuel economy. Increasing demand for luxury vehicles with advanced features and comfort is expected to drive the global automotive thermal system market over the forecast period.

Additionally, car manufacturers are already engaging in electric vehicles to comply with strict emission standards set by numerous governments worldwide. Automobile manufacturers must address safety concerns regarding the batteries used in electric engines when they release new electric vehicles into the market. To increase engine performance and battery longevity, thermal management systems in electric cars help maintain battery packs within the desired temperature range. As a result, enforcing strict emission laws is another factor anticipated to support the expansion of the automotive thermal system market.

Thermal management systems maintain key components' operating temperatures to lower the possibility of component damage in vehicles. New energy vehicles are being built with smart thermal systems. Additionally, several manufacturers provide intelligent thermal solutions for autos. Johnson Electric, for instance, offers thermal management options for batteries, cabin heating, and power electronics. Demand for automotive thermal systems is anticipated to increase due to the integration of thermal management solutions into automobiles.

Global automotive thermal management market restraints

High cost

Due to strict pollution and fuel economy requirements, OEMs have been forced to embrace innovative technologies. Due to the rising demand for improved engine performance and in-vehicle comfort features, manufacturers have been forced to concentrate on powertrain, drivetrain, and in-vehicle cabin comfort systems. A thermal system's effectiveness can be evaluated by comparing its cost to the overall CO2 reduction it achieves. OEMs have previously embraced and incorporated technologies with substantial ROI and CO2 reductions in their premium models.

Leading OEMs including BMW, Fiat Chrysler, Ford, GM, Honda, Hyundai, JLR, Kia, Mercedes, and Nissan have used technology like polymer material heat exchangers, active grille shutters, predictive powertrain control, variable engine oil pumps, integrated liquid-cooled exhaust/EGR, and multizone climate control systems. Although there are numerous thermal system technologies, only a handful are now in use because of their favorable cost-benefit ratios, and most are found in luxury vehicles. As a result, the installation of modern thermal systems will continue to be primarily restricted to luxury vehicles due to their high cost.

Global automotive thermal management market opportunities

Growing popularity of electric vehicles and advancements in mobility solutions

Over the past four to five years, China, the US, and Europe have all seen exponential growth in the popularity of electric vehicles. OEMs are continuously attempting to create battery-powered passenger cars that are effective, economical, and long-range. Thermal systems for the battery, traction motors, and power electronic modules, as well as auxiliary loads like cabin heating and cooling and other electric components, would become one of the most critical factors contributing to increased performance, driving range, and vehicle lifespan. The development of partially autonomous and fully driverless vehicles has continued to advance the automotive sector. These thermal systems control the engine cooling, interior heating, and ventilation, ensuring the vehicle's smooth operation.

With differential heating during start-up and TEG technologies, the start-stop mechanism of a vehicle can be centralized for maximum fuel efficiency and minimum fuel waste. Advanced technologies are also installed, including multizone climate control, an autonomous collision avoidance system, an infotainment system, head-up displays, a heating and ventilation system for the seats, multiple sensors, and other electronic components required for optimal performance. Therefore, as autonomous vehicle technology advances, more effective thermal management will be needed to handle the heat generated by the sensors and other components in these vehicles.

Regional Analysis

Asia-Pacific Surpasses Other Regions

By region, the global automotive thermal management market is analyzed across North America, Europe, Asia-Pacific, and the Rest of the World.

Asia-Pacific will command the leading market position, expanding at a CAGR of 6.55% over the forecast period. The market for thermal management systems is anticipated to be driven by the expanding automotive industry in Asia-Pacific, where hubs for the production of automotive parts for western auto giants are emerging in China and India. A positive outlook for market growth is anticipated during the forecast period due to the expanding government regulations promoting the adoption of electric vehicles and the aggressive expansion strategies adopted by regional OEMs and suppliers to meet the rising demand from China's automotive industry.

The world's fourth-largest automotive market is India, which also ranks seventh globally in terms of commercial vehicle manufacturing. The country's car component industry has grown dramatically during the last five years. An Ahmedabad-based technical innovation start-up called Matter, which specializes in providing cutting-edge sustainable solutions, said in 2022 that it has developed a new high-speed mid-torque electric motor. The Integrated Intelligent Thermal Management System, among other important innovations, is included in the company's new intelligent drive train, the Matter Drive 1.0 Motor, according to the company. These elements support the market expansion in the Asia Pacific.

Europe will likely grow at a CAGR of 6.15%, accounting for USD 32 billion by 2030. During the projected period in Europe, increasing technical breakthroughs and rising spending on innovation in the automotive industry are anticipated to enhance demand for the automotive thermal management market. The expansion of the sector of automotive thermal management is also projected to be moderately impacted by government measures, such as a prohibition on using diesel-powered vehicles, since it is likely to increase the adoption of electric vehicles. The leading automakers evaluate innovative HVAC and thermal management systems developed by German vehicle engineering businesses. For instance, Volkswagen intends to deploy additional driver assistance features and an EV route planner in 2022 via an over-the-air software update. Additionally, battery heat management has been improved, enabling more efficient driving and a more extended range, especially in cold weather.

Segmental Analysis

The global automotive thermal management market is segregated based on application, vehicle type, and region.

By application, the global automotive thermal management market includes Engine Cooling, Cabin Thermal Management, Transmission Thermal Management, Waste Heat Recovery/ Exhaust Gas Recirculation (EGR) Thermal Management, Battery Thermal Management, and Motor & Power Electronics Thermal Management.

The Cabin Thermal Management section is projected to advance at a CAGR of 6.3% and hold the largest market share over the forecast period. Complete heating, ventilation, and air conditioning (HVAC) are used in the cabin automobile thermal management system to control the car's interior temperature. The number of vehicles sold globally will drive the market over the study period since both internal combustion engines, and electric vehicle occupants need to be comfortable. Both internal combustion engines and electric motor-powered vehicles have unique cabin thermal management systems. Thus, as investments in electric vehicles increase, so does the development of the cabin thermal management system.

The Engine Cooling section will hold the second-largest market share. The market for automotive thermal management's engine cooling is driven by the rise in the number of internal combustion engine-powered cars. Vehicle powertrains employ internal combustion engines to transform chemical energy into heat and mechanical energy. This heat must be eliminated from the system for the engine to function correctly. Several parts are used to keep the engine at the proper temperature, including the radiator and coolant pump. Therefore, a rise in vehicle registrations will support the expansion of the automotive thermal market during the forecast.

By vehicle type, the global automotive thermal management market includes Passenger Cars and Commercial Vehicles.

The Passenger Car section is projected to advance at a CAGR of 6.6% and hold the largest market share over the forecast period. In 2020, passenger cars accounted for more than 70% of global EV sales. Due to demand from Asia-Pacific, North America, and Europe, the SUV segment in passenger cars has been expanding over the past few years (especially in China). Due to planned models from manufacturers throughout the world, the electrification of cars is projected to continue during the projection period. The vehicle thermal management market is primarily driven by rising SUV production and sales in European nations.

The Commercial Vehicle section will hold the second-largest share. The commercial vehicle segment considers both light and heavy commercial vehicles, including vans, pickup trucks, heavy trucks, and buses. Commercial cars with electronic traction control, electronic stability program, anti-lock braking system (ABS), and adaptive distance-control systems, among others, are likely to become more popular during the forecast period as consumer awareness of safety features rises. The global demand for commercial vehicle sales and the burgeoning logistics and e-commerce sectors are driving the price of automotive thermal management systems. The rising urbanization might further aid the market expansion in developing nations, which is anticipated to raise demand for light, medium, and heavy commercial vehicles.

Recent Developments

• June 2024 - Auburn Hills, Michigan's e-Mobility Innovation Center (eMIC), a new facility designed to handle fluids and maintain temperature, was formally inaugurated by TI Fluid Systems. This 4,460-square-meter facility is intended to promote customer engagement and streamline the development of thermal management systems for North American hybrid, plug-in hybrid, and battery-electric automobiles.
• April 2024 - Vitesco Technologies, a prominent provider of advanced drivetrain technologies and electrification solutions, formed a partnership with Sanden International (Europe), a major operator in automotive thermal management technology. Vitesco Technologies was previously spun offgrated Thermal Management System specifically designed for Battery Electric Vehicles (BE from the renowned German Tier-1 company Continental. The pair will create an InteVs).