U.S. Automotive E-Axle Market Size, Share & COVID-19 Analysis, By Propulsion Type (Battery Electric Vehicle (BEV) and Hybrid Electric Vehicle (HEV)), By Drive Type (All Wheel Drive, Front Wheel Drive, and Rear Wheel Drive), By Vehicle Type (Passenger Cars and Commercial Vehicles), and Regional Forecast, 2023-2030

The U.S. automotive e-axle market size was valued at USD 3.19 billion in 2022. The market is projected to grow from USD 3.56 billion in 2023 to USD 12.22 billion by 2030, exhibiting a CAGR of 19.24% during the forecast period.

An automotive e-axle, also known as an electric axle, is a propulsion system that integrates an electric motor into the axle assembly of a vehicle. It combines the function of the traditional axle with an electric motor, resulting compact and integrated solution for electric or hybrid vehicles.

The automotive e-axle system eliminates the need for traditional internal combustion engines and separate components like driveshaft and transmission. The e-axle can be implemented into various vehicle configurations, including Front Wheel Drive (FWD), Rear-Wheel Drive (RWD), and All-Wheel Drive (AWD). They offer advantages such as instant torque delivery, efficient power distribution, regenerative braking, and enhanced overall vehicle performance. The U.S. holds one of the most remarkable shares in the U.S. automotive e-axle market share owing to rising demand for EVs in the country. Increasing government initiatives and technological advancements are fueling the demand for e-axle in the U.S. over the forecast period.

COVID-19 Impact

Shutdown of Production Facilities and Disruption in Supply Chain Activities Negatively Impacted the Market

The market experienced a major impact during the COVID-19 pandemic. The COVID-19 pandemic reduced the production of automobiles and automotive parts due to the partial or complete shutdown of production facilities, and also faced challenges in supplying components from the Asia-Pacific regional countries. Thus, the slowdown in productivity, supply chain disruption, and stopped manufacturing plants severely impacted the automotive industry. China is a significant supplier of raw materials in automobile and automotive parts manufacturing. Due to the COVID-19 restrictions and lockdown, the supply of automotive parts from China was disrupted, creating a shortage of raw materials. Due to this, the automotive industry faced major issues which lowered the global demand for automotive parts and automobiles.

The COVID-19 pandemic disrupted the supply chain with the shortage of raw materials, due to which the automotive industry witnessed a scarcity of electric components and a surge in prices. Various manufacturers faced significant challenges maintaining production levels due to stringent lockdown norms, health and safety measures, reduced workforce, and lower vehicle demand during the pandemic. This has directly impacted the production of electric and hybrid vehicles. Additionally, the postponement of OEM investment in emerging technologies development significantly hampered U.S. market growth during the pandemic. However, the e-Axle market faced an uptick post-COVID-19; the growth is attributed to the lifting of restrictions on public spaces and the reopening of major economies. The populace is shifting towards adopting private vehicles to prevent the spread of COVID-19. Moreover, people are inclined to adopt electric vehicles for a sustainable future. The companies also focused on research and development of E-axles that will help the automotive industry in an efficient manner post-COVID-19 pandemic.

LATEST TRENDS

Rising Devolvement of Sustainable EV Components through Collaborations, Agreements, and Partnerships

The demand for electric vehicles is increasing worldwide. However, there is a significant difference between the performance and affordability of electric vehicles. Hence, strategic partnerships between automotive parts and manufacturers have increased exponentially to accelerate electric mobility and achieve mass adoption. Automotive part manufacturers are focusing on providing efficient, high-performance, and highly integrated Automotive E-axles as per the requirements of the automotive manufacturers. Moreover, the development and diversity in the product create a must condition for the major players to collaborate, thus fueling the market. For instance, in January 2021, Suzhou Inovance Automotive Co., Ltd. signed a technological agreement with American Axle and Manufacturing Holdings, Inc (AAM), to accelerate the development and delivery of scalable, next-generation 3-in-1 electric drive systems that integrate an inverter, electric motor, and gearbox. With the help of this, the company seeks to enhance the power density, efficiency, and cost-effectiveness of the electric drive technology.

DRIVING FACTORS

Increasing Demand and Adoption Of Electric Vehicles To Drive The Market Growth

Increasing consumer interest in adopting electric vehicles for efficient, clean, and sustainable environmental factors is one of the major factors driving the demand for the automotive E-axle market. Environmental concerns regarding curbing vehicle pollution and fighting climate change have increased the demand for electric vehicles. The depletion of fossil fuel reserves and hike in petrol and diesel prices have pushed the populace to switch to electric vehicles. This has propelled the market. The advancements in electric vehicle technology, such as monitoring and improved vehicle connectivity systems, increased driving range, and power, play a major role in driving the electric vehicle market. Companies focusing on providing better and more efficient propulsion systems for better performance of vehicles and driving range provide substantial growth for the market. For instance, 2022, Ford's Mustang Mach-E and Chevrolet's Bolt were among the top-selling electric vehicles in 2022. Nearly 20,800 and 22,100 Chevrolet Bolts were sold in the U.S. in 2020 and 2021, respectively.  Manufacturers in the U.S. focus on putting electric mobility at the forefront of investment and increasing R&D spending. It happened due to many states have pledged to ban fossil fuel car sales by 2035, and the U.S. government is working to decarbonize vehicles. All these factors result in the increasing adaption of electric vehicles on the road that propels the growth of the U.S. market in the forecast period. 

Rising Development of EV Infrastructure, Government Subsidies, and Schemes to Drive the Market

To cater to a sustainable future and to increase the adoption of electric vehicles, the government is focused on implementing schemes and subsidies to boost electric vehicle sales that fuel the U.S. automotive e-axle market. For instance, The Indian government has launched a scheme called FAME (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) and e-AMRIT. Under these schemes, the government provides incentives, discounts, and subsidies for the people who take a step forward and adopt electric vehicles. Moreover, Various regulatory authorities have set up strict regulation policies regarding the emission due to vehicles affecting the environment and triggering the greenhouse gasses effect. For instance, the U.S. State of California has planned to ban the sale of petrol cars by 2035.

Further, the government aims to incorporate electric vehicles on the roads. Due to this initiative, the number of electric vehicles on the roads will increase, thus increasing the demand for EV e-axle to be used in the vehicle. This will drive the market growth of the U.S. market soon. And to provide efficient service for electric vehicles, the government and regulatory bodies of several countries, in partnership with major players, also focus on installing EV charging stations to enhance electric vehicle adoption. For instance, in March 2023, the U.S. government announced to install of 24,000 charging stations by the end of 2024

RESTRAINING FACTORS

High Capital Investment in R&D of Autonomous Technology to Restrain Product Growth

Considering the rising fuel cost in many regions, electric vehicles are beneficial and are advanced over conventional vehicles. Due to this, demand for electric vehicles is seen rising. However, electric vehicles need high capital for manufacturing due to the procurement of rare earth metals used in permanent magnets for synchronous motors. According to Kelley Blue Book (a Cox Automotive subsidiary), an electric vehicle's average price is around USD 55,000. Hence, the cost of an electric vehicle is considered equivalent to an entry-level luxury car in terms of pricing.

Furthermore, users need to install a Level 2 charging outlet in their home that costs an additional USD 2,500 (to save time and extend battery life) compared to Level 1 charging (cheaper, exponentially longer charging time). Hence, the higher upfront costs for EVs will restrain the market growth. The price of EVs is comparatively higher than that of conventional vehicles. This is due to the advanced features requirements and high-quality components used in vehicles. The manufacturers need to invest in infrastructure and tooling to produce electric vehicles. Establishing new assembly lines, retooling existing factories, and upgrading production processes to accommodate EV manufacturing require significant capital investments. These costs add to the overall manufacturing cost.

The most significant contributor to EVs' high manufacturing cost is the e-axle cost. E-axle is one of the major components in electric vehicle powertrain. Developing and integrating an e-axle system into a vehicle requires significant engineering effort. It involves designing and testing various components compatible with the vehicle’s chassis and other systems. These engineering costs contribute to the overall cost of the e-axle.

Additionally, the increase in weight and torque of the e-axle based on vehicle type further increases the overall cost of the e-axle, including battery, motor, gearbox, and others. Due to high manufacturing costs, the price of electric vehicles is much costlier than conventional vehicles. This restrains the adoption of electric vehicles in the market, which resists the growth of this market.

SEGMENTATION

By Propulsion Type Analysis

The Increase in Tax Benefits by Government is expected to Fuel the Demand for BEV Segment

Based on the Propulsion type, the market is segmented into two segments battery electric vehicles (BEV) and hybrid electric vehicles (HEV). The BEV segment accounted for the largest market share and is also considered the fastest-growing segment in this market. The growth is attributed to the increase in the adoption of BEV due to government tax benefits and increasing fuel prices across the country.

The hybrid electric vehicle (HEV) segment is anticipated to hold the second-largest position in the market. Increasing emission norms in the U.S. is increasing the growth of HEV over the forecast period. For instance, the U.S. Department of Transportation has set vehicles' corporate average fuel economy (CAFE) standards. Additionally, the growing adoption of hybrid electric vehicles is attributed to government credit incentives for hybrid vehicles. Additionally, high fuel efficiency is due to less HEV weight than conventional vehicles propelling the U.S. automotive E-axle market growth.

By Drive Type Analysis

The Growing Demand for Enhanced Handling and Stability Features is driving the Demand for All Wheel Drive Segment

Based on the drive type, the market is segmented into three segments; All Wheel Drive (AWD), Front Wheel Drive (FWD), and Rear Wheel Drive (RWD).

The All-Wheel Drive segment is expected to dominate the market over the forecast period as AWD offers improved stability and control on uneven and bad roads. E-axle AWD also offers benefits such as regenerative braking, energy efficiency, and reduced emissions. Therefore, top EV manufacturers have started to install AWD in their vehicles. For instance, Tesla’s models S, X, 3, and Y are equipped with e-axle AWD. These models have electric motors mounted on the front and rear axles, allowing precise torque distribution and improved traction. Additionally, the advancement in the all-wheel drive system design to operate more fuel-efficiently fuels the segment market growth in the forecast period.

The rear wheel drive segment is anticipated to hold the second-largest position in the market. Rear-wheel drive refers to a propulsion system in which an electric motor is mounted on the vehicle's rear axle, providing power exclusively to the rear wheels. The instant torque generated from the electric motor provides quick and seamless acceleration, delivering a dynamic driving experience. Additionally, placing the heavy electric vehicle near the rear wheels contribute to better weight distribution, which enhances handling and stability. These factors are anticipated to maintain the second-largest position in the market over the forecast period.

By Vehicle Type Analysis

Increasing Focus On Reducing Carbon Emissions is Driving Passenger Cars Growth

The market is segmented into passenger cars and commercial vehicles based on vehicle type.

The passenger cars segment accounted for the largest market share with a market size by vehicle type. The segment is also considered to be the fastest-growing segment in the U.S. automotive E-axle market, with a CAGR of 19.24% over the forecast period. The growth is attributed to the increase in the adoption of passenger cars due to efficient and high-performance drivetrain solutions provided by passenger electric cars. Increasing focus on reducing carbon emissions and meeting stricter environmental regulations has forced the automakers to focus on manufacturing battery electric and hybrid electric passenger vehicles. These factors are helping the passenger cars segment to dominate the market over the forecast period.

Commercial electric and hybrid electric vehicles such as buses and medium and heavy-duty commercial trucks require immense power delivery and efficient performance to meet the demand of commercial operations. The e-axle system simplifies the vehicle architecture by eliminating the need for complex drivetrain components like transmission, driveshafts, and differentials. This reduces the maintenance requirements, streamlines manufacturing, and enhances reliability which are crucial factors for the operation of commercial electric vehicles. These factors are helping to maintain the second-largest position of commercial vehicles in the U.S. market over the forecast period.

KEY INDUSTRY PLAYERS

Majority of The Players Are Focused On Their Partnerships & Expansion Strategies To Maintain Competitive Edge

The U.S. market is consolidated, with limited company profiles operating in this industry. Within the competitive landscape, players have a diverse product portfolio with a high focus on technological expansion. The majority of the players are focused on their partnerships & expansion strategies through dealership and R&D activities. The players focus on developing products compatible with the latest trends and technologies, such as self-driven boats and self-docking.

LIST OF KEY COMPANIES PROFILED:

• American Axle & Manufacturing, Inc. (U.S.)


• Dana Limited (U.S.)


• Nidec Corporation (Japan)


• GKN Automotive (U.K.)


• Robert Bosch GmbH (Germany)


• SAF Holland (Germany)


• Axle Tech (Meritor Inc.) (U.S.)


• Magna International Inc. (Canada)


• Bonfiglioli USA Inc. (U.S.)


• Suzhou Inovance Automotive Co., Ltd. (China)

KEY INDUSTRY DEVELOPMENTS: 

• May 2023 - Dana Incorporated, a leader in electrification solutions for clean commercial vehicle transportation, announced the expansion of its Spicer Electrified e-Powertrain offerings to include a family of e-Transmissions for a wide variety of medium-duty electric-vehicle applications. The technology will launch on a global electric vehicle platform in early 2024.


• October 2022- GKN Automotive signed a partnership with Ariel. Under the partnership, GKN will develop and produce an electric powertrain for Ariel HIPERCAR. The Ariel HIPERCAR will be incorporated with GKN's 1180 bhp electric powertrain providing high performance and efficiency.


• October 2022 - At the 2022 North American International Auto Show, Bosch revealed its new electrification portfolio, i.e., e-axle. The power modules of the eAxle city are based on silicon carbide semiconductor technology for the new generation of highly efficient and energy-saving silicon carbide inverters. The eAxle performance, which also features silicon carbide technology for 400V and 800V, uses new semiconductor technology combined with a multi-objective, multi-domain development approach.


• September 2021 - Dana Limited launched e-axle production for the zero-emission electric delivery vehicle of Freightliner Custom Chassis Corporation. Under a contract, Dana will provide its eS9000r e-Axle for the Freightliner Custom Chassis Corporation (FCCC) all-electric MT50e medium-duty last-mile delivery vehicle. The eS9000r e-Axle- the first in a line of Spicer Electrified Zero-6 e-Axle is designed with a custom Spicer S130 rear e-axle, including a gearbox and motor, that provides up to 240 kW of power to support a vehicle driving range of 170 miles.


• May 2021 - American Axle & Manufacturing Inc., a leading global Tier 1 automotive supplier of driveline and metal forming technologies, and REE Automotive, a leader in e-Mobility, today announced that the companies have agreed to develop an exciting new electric propulsion system for e-Mobility jointly

REPORT COVERAGE

The market report provides a detailed analysis of the U.S. market and focuses on key aspects, such as leading market players, Propulsion Type, and leading applications of the product. Besides, the report offers insights into the latest market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that contributed to the market’s growth in recent years.

Report Scope & Segmentation