Commercial Vehicle Powertrain Systems Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Commercial Vehicle Powertrain Systems Market is projected to expand from USD 308.24 Billion in 2025 to USD 452.82 Billion by 2031, reflecting a compound annual growth rate of 6.62%. These powertrain systems encompass the integrated mechanism of components such as engines, transmissions, axles, and drive shafts, which are responsible for generating power and transferring it to the road for light, medium, and heavy-duty freight vehicles. The market's growth is primarily driven by the rising global demand for transportation and logistics services, fuelled by the expansion of international trade and e-commerce, which necessitates robust fleet utilization. Furthermore, strict government mandates concerning carbon emissions and fuel efficiency are forcing fleet operators to invest in compliant, high-performance propulsion units, thereby ensuring a consistent replacement cycle for aging equipment.

However, the market encounters a significant obstacle in the high capital acquisition costs linked to advanced alternative fuel technologies and the scarcity of essential charging or hydrogen refueling infrastructure. This barrier to adoption is evident in recent industry data; according to the European Automobile Manufacturers’ Association, registrations of electrically chargeable trucks in the European Union decreased by 4.6% in 2024, resulting in a market share of only 2.3%. This decline illustrates the continued reliance on conventional diesel powertrains due to these persistent economic and infrastructural hurdles.

Market Drivers

The implementation of rigorous global emission standards and decarbonization mandates is fundamentally reshaping the Global Commercial Vehicle Powertrain Systems Market. Governments worldwide are enforcing strict policies to limit greenhouse gas emissions, compelling Original Equipment Manufacturers to re-engineer internal combustion engines and accelerate the development of zero-emission propulsion architectures. This regulatory pressure effectively necessitates a technology shift from conventional diesel systems to advanced battery-electric and hydrogen fuel cell alternatives. According to the Council of the European Union, in a May 2024 press release regarding CO2 emission standards for heavy-duty vehicles, the Council formally adopted a regulation requiring new heavy-duty vehicles to reduce CO2 emissions by 45% starting in 2030 and by 90% by 2040, thereby cementing a long-term trajectory for powertrain innovation.

Simultaneously, the surging volume of e-commerce, which drives demand for efficient last-mile delivery logistics, is altering the powertrain mix, particularly for light commercial vehicles. Logistics providers are prioritizing fleet efficiency to handle high-frequency stop-start cycles, leading to increased procurement of electric drive units that offer lower operating costs. This trend is evident in major corporate fleet strategies; for instance, Amazon.com, Inc. announced in a July 2024 update on its electric delivery vans that it has deployed over 15,000 electric delivery vehicles across the United States. Underscoring the massive scale of the wider market, Daimler Truck AG reported global unit sales of 114,917 vehicles in the third quarter of 2024 alone, reflecting the sustained volume requirements for diverse powertrain applications.

Market Challenges

The primary challenge hindering the Global Commercial Vehicle Powertrain Systems Market is the prohibitive capital acquisition cost associated with advanced alternative fuel technologies, compounded by a severe scarcity of essential charging and hydrogen refueling infrastructure. These economic and logistical barriers create substantial financial risk for fleet operators, who typically function on narrow profit margins. Consequently, decision-makers are reluctant to transition from established internal combustion engines to cleaner electric or hydrogen propulsion systems, as the return on investment remains uncertain and operational downtime due to refueling scarcity poses a threat to logistics efficiency.

This hesitation directly stifles market expansion by slowing the replacement cycle of legacy powertrains and stalling the revenue potential of higher-value advanced systems. The impact of these hurdles is evident in recent industrial performance figures. According to the Society of Motor Manufacturers and Traders, in 2024, zero-emission truck registrations in the United Kingdom fell by 7.3%, resulting in a market share of only 0.5%. Such figures demonstrate that despite regulatory pressure, the high upfront expense and infrastructure deficit force the industry to maintain a continued dependence on conventional diesel systems.

Market Trends

The Emergence of Hydrogen Internal Combustion Engines (H2-ICE) represents a strategic pivot for manufacturers seeking to decarbonize heavy-duty transport without the prohibitive manufacturing costs associated with fuel cell or battery-electric architectures. Unlike completely new propulsion systems, H2-ICE leverages existing engine production lines and supply chains, offering a cost-effective technology that functions reliably in harsh environments where delicate electronics might falter. This trend allows OEMs to maintain internal combustion relevance while meeting zero-emission targets through hydrogen fuel. According to MAN Truck & Bus, in an April 2024 press release regarding its zero-emission portfolio, the manufacturer became the first European truck producer to launch a small series of the MAN hTGX with a hydrogen combustion engine, planning a delivery of approximately 200 units to selected markets as early as 2025.

Simultaneously, the Accelerated Adoption of Integrated E-Axle Systems is revolutionizing powertrain packaging by combining the electric motor, transmission, and axle into a single compact component. This integration eliminates the need for traditional prop shafts and central motors, thereby freeing up critical chassis space to accommodate larger battery packs and extending the operational range of commercial fleets. This architectural shift enhances system efficiency and simplifies vehicle assembly for diverse commercial applications. According to Allison Transmission, in an August 2024 announcement regarding its electric axle for commercial vehicles, the company unveiled the eGen Power 85S, a new fully integrated electric axle featuring a two-speed gearbox and a peak output of 325 kilowatts, designed to seamlessly replace conventional powertrains in light-duty commercial applications.

Key Players Profiled in the Commercial Vehicle Powertrain Systems Market

• Toyota Motor Corporation
• Hyundai Motor Company
• JTEKT Corporation
• ZF Friedrichshafen AG
• Volkswagen AG
• Ford Motor Company
• General Motors Company
• GKN PLC
• Borgwarner Inc.
• Aisin Seiki Co. Ltd.

Report Scope

In this report, the Global Commercial Vehicle Powertrain Systems Market has been segmented into the following categories:

Commercial Vehicle Powertrain Systems Market, by Drive Type:

• Front-wheel Drive
• Rear-wheel Drive
• All-wheel Drive

Commercial Vehicle Powertrain Systems Market, by Component Type:

• Engine
• Transmission
• Differentials
• Driveshaft

Commercial Vehicle Powertrain Systems Market, by Vehicle Type:

• LCV
• M&HCV

Commercial Vehicle Powertrain Systems Market, by Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Commercial Vehicle Powertrain Systems Market.

Available Customization

The analyst offers customization according to your specific needs. The following customization options are available for the report:

• Detailed analysis and profiling of additional market players (up to five).

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