Electric Vehicle (EV) Transmission Market

Market Overview

The global electric vehicle (EV) transmission market size was valued at USD 7.50 billion in 2022. It is projected to reach USD 45.91 billion by 2031, growing at a CAGR of 22.30% during the forecast period (2023-2031).

Electric traction motor power is transferred to the wheels of an electric vehicle by an electric vehicle gearbox. Most electric cars only have a single-speed transmission since, in today's world, it is sufficient for efficient operation. There are other vehicle types, though, for which a multi-speed message makes sense. The development of multi-speed transmission sailing operation and load-shifting capabilities for electric vehicles is being worked on by many of the market's top manufacturers, who intend to introduce them shortly. Due to the requirement to fulfill government emission limits and anticipated fuel usage, the development of electric vehicles is gaining speed at a rapid rate.

Market Dynamics

Market Drivers

Escalating Demand for Vehicles with Low Emissions and Fuel Efficiency

Gasoline is a fossil fuel, so it cannot be renewed as an energy source and will eventually run out. Creating and utilizing alternative fuel sources is crucial for promoting sustainable development. Using electric vehicles—which don't require petrol and are more cost-effective than traditional vehicles—is part of this. A gas-powered car only manages to convert roughly 17%–21% of the energy stored in the fuel. Due to the recent rise in the price of gasoline and diesel, there is a greater demand for fuel-efficient automobiles. This is due to the depletion of fossil fuel reserves and an increase in businesses' desire to maximize profits from these oil supplies.

Government Programs to Encourage the Use of Electric Vehicles

The governments of several nations are taking steps to encourage the usage of electric vehicles to achieve fuel efficiency requirements and lower greenhouse gas emissions. For greater collaboration and a smooth transition in the automotive industry, the Japanese government prepared a strategy for electric vehicles in August 2018. Additionally, it has launched the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles II initiative (FAME). This states that incentives will be given to encourage local electric vehicle manufacturing. Therefore, it is anticipated that such government measures would fuel the development of electric vehicles and the market for electric vehicle (EV) transmissions.

Market Restraint

High Cost of Electric Vehicles

Although they cost more than conventional automobiles, electric vehicles have advantages. The high battery cost is the critical factor in the extra expense associated with purchasing an electric car instead of a fuel-powered one. The leading causes of electric vehicles' high prices are their expensive production process and utilization of pricey raw materials. As a result, these elements raise the price of electric cars, restraining the market for electric vehicle (EV) transmissions from expanding.

Market Opportunities

Advancements in Electric Car Technology

The automobile industry's primary emphasis is to manufacture advanced electric vehicle systems, which are anticipated to have reduced emissions at comparably lower costs. Companies are now producing smaller engines for use in automobiles to meet the forthcoming BHARAT STAGE VI pollution standards. This is explained by the fact that they emit fewer pollutants than heavier and larger engines do. Their affordable and compact form also expands these smaller little engines' usefulness. As a result, the market's top players for electric vehicle (EV) transmission are presented with various chances for developing improved electric vehicle transmission.

Regional Analysis

The global electric vehicle (EV) transmission market is divided into four regions: North America, Europe, Asia-Pacific, and LAMEA. 

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant revenue contributor and is expected to grow at a CAGR of 26.80% during the forecast period. China, Japan, India, South Korea, and the rest of Asia-Pacific are all included in the term "Asia-Pacific," which has been used to study the electric vehicle (EV) transmissions market. Businesses operating throughout Asia-Pacific and offering their products there, such as JATCO Ltd., AISIN SEIKI CO., and others, have created the potential for the market to expand. The region with the most significant market share in the global electric vehicle (EV) transmission industry is Asia-Pacific, with China dominating the EV fleet market. Electric vehicle adoption is increasing in developing nations like India, China, and Indonesia due to higher adoption rates of intelligent mobility services, government regulations, rising fuel prices, and a growing trend toward the use of non-fossil fuel-based vehicles, which opens up lucrative opportunities for the market in this area.

North America is expected to grow at a CAGR of 26.80% during the forecast period. The North American countries analyzed for the worldwide electric vehicle (EV) transmission market report include the United States, Canada, and Mexico. Companies around the region have developed new products and launched them, helping the market in North America flourish. The demand for electric vehicle (EV) transmissions is expected to increase significantly in the region as electric car sales rise. The electric vehicle (EV) transmission market in North America is also anticipated to grow due to government initiatives to promote the adoption of electric vehicles and manufacturer innovations.

Germany, France, the UK, Italy, and the rest of Europe are all included in the EV transmission market report studies. Electric cars are now widely used throughout the region due to people's growing preference for environmentally friendly transportation. The market for electric vehicle transmissions is predicted to experience significant expansion due to government attempts to minimize the emission of toxic gases from internal combustion engine automobiles. Launching a new line of advanced, innovative electric vehicles is also projected to fuel the market's expansion in Europe.

Latin America, the Middle East, and Africa are all included in the analysis of the LAMEA market. In LAMEA, innovative electric vehicle systems are adopted by commercial vehicles at a relatively rapid rate. This is due to the region's high car pollution standards and growing demand for environmentally friendly and fuel-efficient technologies. Although this region has a smaller market share than other regions, LAMEA is anticipated to develop substantially due to the region's and the Middle East's increased adoption of green mobility. The need for fuel-efficient and environmentally friendly automobiles is rising, driving the growth of the electric vehicle industry throughout LAMEA. In addition, many electric car producers have established operations in several LAMEA nations.

Segmental Analysis

The global electric vehicle (EV) transmission market is segmented by type, vehicle type, and transmission system.

Based on type, the global electric vehicle (EV) transmission market is bifurcated into single-speed and multi-speed.

The single-speed segment is the highest contributor to the market and is estimated to grow at a CAGR of 26.80% during the forecast period. An electric vehicle's single-speed gearbox provides a more excellent choice of features, which in turn helps the market flourish. One reduction gear, for instance, offers a direct drive for the vehicle and ensures steady speed. Additionally, a single-speed transmission system allows for speedier operation and produces instantaneous torque when connected to a motor. Additionally, single-speed transmission systems are more frequently accepted in various cars because they take up less room. After all, there is no complex gear system incorporated. Such capabilities provided by single-speed transmissions support the segment's expansion in the global market.

Dual clutch transmission, which offers an alternative to boost electric vehicles' performance, efficiency, and range, is the foundation of multi-speed transmissions. Electric cars with multi-speed transmissions perform better than single-speed transmission systems in terms of quicker acceleration, top speed, gradability with driving range, and other performance metrics. A vehicle's torque and efficiency are both increased with a multi-speed transmission system put in the vehicle. A multi-speed transmission system allows the car to propel itself at its highest speed.

Based on vehicle type, the global electric vehicle (EV) transmission market is bifurcated into passenger, commercial, and Off-highway Electric vehicles.

The passenger electric vehicle segment owns the highest market and is estimated to grow at a CAGR of 27.60% during the forecast period. Electric passenger vehicles are used to move people from one location to another. They feature four wheels. Additionally, an electric passenger car can only have a maximum of eight seats, including the driver's seat. Due to rising consumer interest in buying green fuel vehicles, passenger EVs have greatly expanded in popularity within the worldwide electric vehicle sector. The introduction of new and innovative passenger automobiles has been aided by ongoing product developments made by various firms, which have contributed to the segment's expansion on the worldwide market. At the 11th EV Japan Expo 2020, BorgWarner showcased a more comprehensive selection of its most recent cutting-edge technology portfolio for highly effective electrified vehicles. Such advancements by various businesses support the segment's expansion on the global market.

Commercial electric vehicles transport passengers and cargo from one location to another. They must have at least four wheels. Light commercial cars, large trucks, and buses are all considered commercial vehicles. Due to the accessibility of high-performance automobiles everywhere in the world, the market for commercial electric vehicles has grown. Commercial cars powered by electricity don't burn fossil fuels or produce CO2 while in use. Commercial electric vehicles are fully clean thanks to renewable energy sources, which is a significant factor in their widespread adoption. Additionally, since commercial electric vehicles have fewer components, component failure and replacement are common. Electric commercial vehicles are expected to rise due to their benefits and features during the projection period.

Based on transmission systems, the global electric vehicle (EV) transmission market is bifurcated into Automated Manual Transmissions, Continuously Variable Transmissions, Dual Clutch Transmission/Dedicated Hybrid Transmissions, and Automatic Transmissions.

The segment is the major contributor to the market and is estimated to grow at a CAGR of % during the forecast period. A form of gearbox that automatically alters gear ratios is an automatic transmission (AT), also referred to as a self-shifting transmission. The AT transmission does not rely on the clutch to change ratios in the car; instead, it swaps gears using a hydraulic locking and unlocking system. An automatic transmission (AT) is a type of motor vehicle transmission that runs without a clutch pedal and may change gear ratios automatically as the vehicle drives, doing away with the necessity for manual gearshifting. Additionally, because it requires less human effort, an automated transmission system improves a vehicle's efficiency and is more often used in crowded areas. 

Automated manual transmission (AMT) is an automatic gearbox that enables manual gear changes without requiring the driver to shift ratios physically. Based on inputs from the computer or the driver, processors, sensors, and actuators perform the task of shifting gears. Automated manual transmission (AMT) has become more popular in the electric vehicle (EV) transmission marketbecause it is more practical than a manual transmission system. Additionally, the use of the clutch by the driver is decreased by the automatic manual transmission, which lessens the driver's weariness brought on by the manual transmission system. A vehicle's efficiency is also increased by installing an automated manual transmission system since it allows more engine energy to reach the wheels.

Recent Developments

• January 2023- Inmotive enteredinto a joint development agreement with Suzuki for the implementation of its Ingear Two-Speed EV Transmission.
• January 2023- Allison Transmission collaborated with Nikola to Drive Next-Generation Vehicle Development at Allison’s Vehicle Electrification + Environmental Test Center.