Propulsion Systems Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Propulsion Systems Market is projected to expand significantly, rising from USD 320.63 Billion in 2025 to USD 505.42 Billion by 2031, reflecting a CAGR of 7.88%. These systems, which encompass the mechanical assemblies and engine technologies required to generate movement, are essential across the automotive, aerospace, and marine sectors. Market growth is primarily fueled by the increasing need for fuel efficiency and the strict enforcement of global emission standards that demand continuous technological innovation. Furthermore, the broadening of commercial logistics networks actively drives the demand for reliable power units. Data from the European Automobile Manufacturers' Association indicates that in 2024, new EU van sales rose by 8.3 percent to 1,586,688 units, underscoring the vital role propulsion technologies play in supporting global trade through commercial mobility.

Despite these positive indicators, the industry faces substantial obstacles related to elevated production costs and supply chain vulnerabilities that can disrupt manufacturing schedules. The fluctuating prices of raw materials needed for both conventional and electric architectures create significant difficulties for original equipment manufacturers regarding long-term planning. These financial and logistical barriers can hinder the swift adoption of emerging technologies and limit overall market expansion, particularly as companies strive to scale the production of next-generation power systems. Consequently, these challenges pose a risk to the rapid deployment of advanced propulsion solutions required to meet evolving industry standards.

Market Drivers

A primary catalyst propelling the market is the resurgence in global air passenger traffic combined with commercial fleet modernization efforts. As travel demand returns to pre-pandemic levels, airlines are aggressively updating their fleets with fuel-efficient engines to lower operating costs and adhere to stricter environmental regulations. This modernization cycle directly stimulates the production of advanced turbofan and turboprop engines as carriers replace aging assets. According to the International Air Transport Association's 'October 2025 Air Passenger Market Analysis' published in November 2025, global passenger demand rose by 6.6 percent compared to the same month the prior year. To satisfy this capacity need, manufacturers like Airbus are increasing output, having delivered 766 commercial aircraft in 2024, emphasizing the industrial scale-up required from propulsion suppliers.

The market is further stimulated by the rapid expansion of commercial space exploration and satellite launch services. The deployment of mega-constellations for internet connectivity and earth observation is generating unprecedented demand for reliable rocket propulsion systems, while reusable launch vehicle technologies are lowering access barriers.

This has enabled private entities to significantly increase launch cadence, necessitating continuous manufacturing of liquid and solid propellant engines. According to a January 2025 report by NASASpaceFlight, SpaceX successfully completed 134 missions with its Falcon rocket family in 2024, illustrating the high operational tempo now present in the sector. Consequently, the industry is shifting toward high-frequency production and reusable architectures to support the growing orbital economy.

Market Challenges

High production costs and supply chain vulnerabilities constitute a significant barrier to the growth of the global propulsion systems market. The volatility of raw material prices makes it difficult for manufacturers to establish stable pricing strategies or commit to long-term production schedules, affecting both conventional internal combustion engines and emerging electric architectures. Consequently, companies may delay the rollout of next-generation power units because the financial risks associated with scaling production become prohibitive. These logistical hurdles directly impede the ability of original equipment manufacturers to meet market demand efficiently, often resulting in delayed timelines for vehicle assembly and delivery.

The tangible impact of these economic constraints is reflected in recent industrial output figures, which show how manufacturing costs are dampening market activity. According to the German Association of the Automotive Industry, domestic automobile production in Germany declined by 6 percent year-on-year in the first half of 2024, totaling 2.1 million units, a downturn largely attributed to high energy and production costs. Such a contraction in vehicle manufacturing volume directly reduces the installation rate of associated propulsion assemblies. When major industrial hubs struggle to maintain production levels due to cost pressures, it restricts the overall growth trajectory of the propulsion systems sector.

Market Trends

The integration of hybrid-electric and all-electric propulsion architectures is fundamentally reshaping the automotive manufacturing landscape as legacy automakers aggressively pivot toward electrification to remain competitive. This transition necessitates massive capital allocation for developing dedicated electric vehicle platforms and domestic battery supply chains, signaling a move away from reliance on traditional internal combustion engines. Companies are successfully converting these investments into market uptake despite broader economic pressures; for instance, General Motors reported in January 2025 that its U.S. electric vehicle sales jumped 50 percent in 2024 compared to the previous year. This substantial increase demonstrates an accelerating consumer shift toward electrified powertrains.

Simultaneously, the maritime sector is experiencing a decisive shift toward Liquefied Natural Gas (LNG) and dual-fuel marine engines to meet rigorous international decarbonization mandates. Shipbuilders are prioritizing propulsion systems that offer operational flexibility, allowing vessels to utilize cleaner-burning fuels like LNG while retaining the capacity to run on conventional marine oils during supply shortages. This preference for versatile, lower-emission power units has led to a rapid expansion in order books for specialized vessels. According to Offshore Energy in January 2025, citing DNV data, the number of LNG vessel orders placed globally in 2024 reached 264 units, a figure more than double the volume recorded in 2023.

Key Players Profiled in the Propulsion Systems Market

• Rolls-Royce Holdings PLC
• General Electric Company
• Safran S.A.
• Northrop Grumman Corporation
• Aerojet Rocketdyne Holdings, Inc.
• Honeywell International Inc.
• Orbital ATK
• Lockheed Martin Corporation
• GKN Aerospace
• MT Aerospace AG

Report Scope

In this report, the Global Propulsion Systems Market has been segmented into the following categories:

Propulsion Systems Market, by Type:

• Air Breathing Engines
• Non-Air Breathing Engines
• Electric Propulsion Engines

Propulsion Systems Market, by Application:

• Aircraft
• Spacecraft
• Missiles
• Unmanned Aerial Vehicles

Propulsion 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 Propulsion 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).

This product will be delivered within 1-3 business days.