Electric Vehicle (EV) Thermal System Market By Component (Compressor, Heat Exchanger, Electric Heater, Thermoelectric Module, Others); By System Type (Battery Thermal Management System (BTMS), Cabin Thermal System, Powertrain Cooling System, Waste Heat Recovery System); By Vehicle Type (Battery Electric Vehicles (BEVs), Plug-in Hybrid Electric Vehicles (PHEVs), Hybrid Electric Vehicles (HEVs), Fuel Cell Electric Vehicles (FCEVs)); By Application (Commercial Vehicles, Passenger Vehicles); By Geography, Segment Revenue Estimation, Forecast, 2024–2032.

EV Thermal System Market Size & Overview

The electric vehicle (ev) thermal system market was valued at USD 5.6 billion in 2024 & is projected to reach around USD 14.4 billion by 2030, expanding at a CAGR of 16.2% during the forecast period. According to the International Energy Agency (IEA), electric car sales were 3.5 million higher in 2023, a 35% Y-o-Y increase. Rising global EV adoption, coupled with the need for efficient battery cooling & cabin comfort, is driving strong demand for advanced thermal management systems.

 

EV Thermal System Market Dynamics:

Market Drivers

The growth of the EV Thermal System Market is primarily driven by the surge in number of electric vehicles adopted globally. In 2023, the bulk of EV sales occurred in China (60%), followed by Europe (25%) & the US (10%). With the surge in EV adoption, the need for efficient temperature control across motors, batteries & other key components becomes crucial. Another major driver is the rising importance of battery thermal management in ensuring safety & performance of EVs. Lithium-ion batteries are extremely sensitive to temperature fluctuations. Proper thermal management in EVs helps prevent problems such as demagnetization, insulation material degradation, reduced efficiency & even motor failure. Regulatory mandates are also fueling market expansion. China has proposed the EV-coolant regulation GB 29743.2 anticipated to take effect in July 2026, aimed at lowering electrical conductivity to reduce the risk of battery fires. Government policies such as the EU’s Fit for 55 & California’s zero-emission vehicle standards are pushing automakers toward full electrification.

 

Market Restraints

One of the primary restraints in the EV thermal system market is the high cost associated with development and implementation. Designing advanced thermal management systems requires significant R&D investment and testing. EVs may lose up to 36% of their battery range in cold weather, as energy is diverted toward heating the battery & maintaining cabin comfort. This range drop poses a serious obstacle in colder regions such as Canada, Northern Europe & parts of the U.S., affecting both consumer confidence & EV adoption rates. Thermal safety concerns remain a pressing issue, particularly related to thermal runaway in lithium-ion batteries. Faulty or underperforming thermal management systems can lead to overheating, which in some cases has caused vehicle fires or explosions.

 

Market Opportunities

The EV thermal system market is poised for significant growth due to the rapid global adoption of EVs, they are expected to make up around 60% of global car sales by 2030. Modern EVs require up to 30% more thermal management components than internal combustion engine (ICE) vehicles, particularly in battery cooling, cabin climate control, and power electronics. The rising demand for fast charging infrastructure also intensifies the need for more efficient thermal systems to manage heat during high-power charging cycles. Hyundai Mobis introduced an advanced battery cell cooling material designed to enhance thermal stability & optimize performance during ultra-fast EV charging. This innovation addresses a critical market need, improving efficiency & safety while supporting the growing demand for high-speed charging solutions in the electric vehicle sector.

 

EV Thermal System Market Segmentation: A Comprehensive Overview

By Component:

• Compressor

• Heat Exchanger

• Electric Heater

• Thermoelectric Module

• Others

 

By System Type:

• Battery Thermal Management System (BTMS)

• Cabin Thermal System

• Powertrain Cooling System

• Waste Heat Recovery System

 

By Vehicle Type:

• Battery Electric Vehicles (BEVs)

• Plug-in Hybrid Electric Vehicles (PHEVs)

• Hybrid Electric Vehicles (HEVs)

• Fuel Cell Electric Vehicles (FCEVs)

 

By Application:

• Commercial Vehicles

• Passenger Vehicles

 

By Region:

• North America

• Europe

• Asia Pacific

• Latin America

• Middle East & Africa

 

Segmentation Analysis – EV Thermal System Market

By Component:

Compressor holds the largest market share at 32%, as it plays a critical role in air conditioning & heat pump systems, which are essential in both passenger comfort & battery temperature control.

Thermoelectric Modules are the fastest-growing component segment, expected to grow at a CAGR of 12.6%, driven by their compact design, efficiency & suitability for localized cooling in battery packs & electronics.

 

By System Type:

Battery Thermal Management System (BTMS) dominates the market with a 41% share, due to the crucial need to maintain battery temperature within optimal limits for performance, safety, and longevity.

Waste Heat Recovery Systems are the fastest-growing, with a CAGR of 13.4%, as OEMs explore ways to improve EV efficiency by utilizing residual thermal energy from inverters & motors.

 

By Vehicle Type:

Battery Electric Vehicles (BEVs) account for the largest share at 61%, supported by surging global sales, rising battery capacities & growing adoption of heat pump technologies in long-range models.

Fuel Cell Electric Vehicles (FCEVs) are the fastest-growing segment, with a CAGR exceeding 14%, as governments invest in hydrogen infrastructure and demand increases for thermal solutions specific to fuel cell stacks.

 

By Application:

Passenger Vehicles lead the market with a share of around 74%, driven by the mass adoption of electric sedans, SUVs & compact cars across North America, Europe & Asia Pacific.

Commercial Vehicles are the fastest-growing, expected to expand at a CAGR of 11.5%, due to electrification trends in delivery vans, buses & logistics fleets that require robust thermal control for larger battery packs.

 

By Region:

APAC dominates the global EV thermal system market, holding the largest share of 48% in 2024, owing to China’s leadership in EV production & the strong presence of component suppliers across Japan & South Korea. Chinese carmakers produced more than 50% of all electric cars sold worldwide in 2023. In 2023, global battery recycling capacity reached 300 gigawatt-hours. If all planned projects come to fruition, capacity could surpass 1,500 gigawatt-hours by 2030, with China accounting for 70% of the total.

 

Europe is the fastest-growing regional market, projected to grow at a CAGR of over 12.1%, fueled by strict emission targets, subsidies for EV adoption & rapid expansion of EV infrastructure.

 

Electric Vehicle (EV) Thermal System Market Report Coverage

Report Attribute	Details
Forecast Period	2024 – 2032
Market Size Value in 2024	USD 5.6 Billion
Revenue Forecast in 2030	USD 14.4 Billion
Overall Growth Rate	CAGR of 16.2% (2024 – 2030)
Base Year for Estimation	2023
Historical Data	2017 – 2021
Unit	USD Billion, CAGR (2024 – 2030)
Segmentation	By Component, By System Type, By Vehicle Type, By Application, By Geography
By Component	Compressor, Heat Exchanger, Electric Heater, Thermoelectric Module, Others
By System Type	Battery Thermal Management System (BTMS), Cabin Thermal System, Powertrain Cooling System, Waste Heat Recovery System
By Vehicle Type	Battery Electric Vehicles (BEVs), Plug-in Hybrid Electric Vehicles (PHEVs), Hybrid Electric Vehicles (HEVs), Fuel Cell Electric Vehicles (FCEVs)
By Application	Commercial Vehicles, Passenger Vehicles
By Region	North America, Europe, Asia-Pacific, Latin America, Middle East & Africa
Country Scope	U.S., Germany, China, India, Japan, South Korea, Brazil, UAE, etc.
Market Drivers	Growth in EV adoption, need for efficient thermal management systems, regulatory support for zero-emission vehicles
Pricing and Purchase Options	Customization available upon request

 

Key Players in the EV Thermal System Market

• Denso Corporation

• Valeo SA

• Hanon Systems

• MAHLE GmbH

• Robert Bosch GmbH

• Gentherm Incorporated

• BorgWarner Inc.

• Continental AG

• LG Chem

• Samsung SDI Co., Ltd