Electrification Market Expected To Reach Approximately US$ 170.4 billion by 2032 | CAGR of 8.9%

Smart grid technology has been a game-changer for the electric power market, driving significant growth in recent years. The technology's ability to improve electric power transmission, generation, and distribution has created opportunities for increased efficiency and reliability. This has resulted in an upsurge in the demand for related products and services, fueling the market's growth.

New York, April 19, 2023 (GLOBE NEWSWIRE) -- The global electrification market in terms of revenue was estimated to be worth USD 74.2 in 2022 and is poised to reach USD 170.4 Bn by 2032, growing at a CAGR of 8.9% from 2023 to 2032. The conversion of non-electric energy sources into electricity at the point of final consumption is known as electrification. Additionally, electrification is an essential option for achieving net zero goals, as it has a significant potential to decarbonize energy supply chains and reduce emissions.

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Key Takeaway:

  • By source, the renewable energy segment held the largest market share in 2022 and is expected to grow more during the forecast period from 2023 to 2032.
  • By application, transportation dominated the global electrification market and is estimated to expand significantly over the forecast period from 2023 to 2032.
  • In 2022, North America dominated the market with the highest revenue share of 48%.
  • Asia-Pacific is likely to grow at the fastest CAGR from 2023-2032.

Growing inclination towards electrified sources, mainly in the transportation sector, is anticipated to enhance the growth of the electrification market over the forecast period. This is largely due to rising concerns over pollution as well as climate change.

Factors Affecting the Growth of the Electrification Market

There are several factors that can affect the growth of the electrification industry. Some of these factors include:

  • Growing inclination: The electrification market growth is mainly influenced by the growing inclination towards electrified sources, mainly in the transportation sector.
  • Utilization of electrification in several industries: The electrification market can be highly attributed to the rising utilization of electrification in several industries and sectors, including commercial and residential buildings, transportation, and industrial manufacturing.
  • Increasing government focus: The increased focus of governments from various economies on the implementation of policies to increase the demand for electrification is likely to boost this market growth.
  • Improvement of smart grid technology: The market growth is significantly fuelled by the improvement of smart grid technology that has opened up endless possibilities for improved electric power transmission, generation, and distribution.

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Top Trends in Global Electrification Market

The rising use of electrification in various industries is the key trend in the global market for electrification. In buildings, it involves the use of electric heating and cooling systems and other electrical appliances such as water heaters, lights, and refrigerators. In the industrial sector, electrification involves the utilization of electric-powered equipment’s and machinery, as well as other electrified systems for the production and manufacturing processes. In the transportation sector, electrification involves the use of electric vehicles (EVs) such as buses, cars, and trucks and supports the infrastructure such as charging stations.

Market Growth

The combination of introducing new electric end-use technologies and various policy objectives in jurisdictions is driving the trend of electrification. Moreover, electrification can be utilized in several industries and sectors, including commercial and residential buildings, transportation, and industrial manufacturing.

Regional Analysis

North America dominated the global electrification market with the highest revenue share in 2022. This growth can be mainly attributed to numerous policies being implemented in this region that are related to electrification. Moreover, the expansion is mainly influenced by the earlier adoption of technologies in this region. Moreover, the Ministry of Natural Resources also announced the funding for the placement of EV chargers in Canada. Asia-Pacific is expected to expand at the fastest CAGR over the forecast period. This can be highly attributed to the rising urbanization across this region.

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Scope of the Report

Report AttributeDetails
Market Value (2022)US$ 74.2 Billion
Market Size (2032)US$ 170.4 Billion
CAGR (2023 to 2032)8.9%
North America Revenue Share48%
Historic Period2016 to 2022
Base Year2022
Forecast Year2023 to 2032

Market Drivers

The increased focus on the implementation of policies by various economies is expected to drive market growth over the forecast period. Several nations are approaching electrification from different perspectives, with the aim of either increasing the demand for electricity or the (renewable) electricity share in the total energy supply. Some countries, mainly emerging countries, are also addressing the distribution network as well as setting targets for the part of the population which is linked to the electricity grid or growing the capacity of the system.

In recent years, several regions are engaged in strengthening their network of electricity, including the European Union, the U.S., Hungary, and India having well-established funds to achieve this. Recently, Sweden published a strategy concentrated only on electrification and further how to enable it. It concentrates on the expansion of EV charging networks, increasing grid capacity, and developing the wind energy sector. Similarly, Japan issued an inclusive response regarding the power shortages. Australia and Canada have started to fund smart- and micro-grid demonstration projects to improve the reliability and resilience of the power grid. Hence, the increase in electrification-related policy measures is expected to propel the global electrification market growth during the forecast period.

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Market Restraints

Difficulties related to building electrification as well as grid responsiveness are likely to hamper the global electrification market growth. As electrification turns an even larger portion of creating the ultimate energy consumption into electricity, it represents two different difficulties for the electrification market. The first is financial; that is, utilities and resource aggregators must ensure their value proposals to residential and commercial consumers are capable enough to win their support. The second difficulty is a technical challenge related to electrification that lies in the non-uniformity and complexity of buildings, thereby making it more challenging for their management in a scalable manner. This is anticipated to restrict the market growth during the forecast period.

Market Opportunities

The advancements in technologies are anticipated to offer numerous growth opportunities over the forecast period. The improvement of smart grid technology has significantly opened up endless possibilities for improved electric power transmission, generation, and distribution. It can be more quickly installed as compared to conventional grids and also occupy less area because of its adaptability.

These advancements in energy storage systems for cost reduction and increased efficiency make it easy to combine renewable energy sources into the grid. The aim of the smart grid design model is to make the grid more observable, improve the security and performance of the power system, make assets controllable, and particularly improve the financial elements of planning, operations, and maintenance.

Report Segmentation of the Electrification Market

Source Insight

The renewable energy segment dominated the global electrification market in 2022. The environmental regulations in both developing and developed countries are anticipated to contribute to segment growth in the coming years. Moreover, the segment growth is largely enhanced due to the rising pressure to reduce greenhouse gas emissions and growing environmental concerns. Additionally, the technological improvements in solar PV production and energy storage systems are likely to present huge prospects for segment growth. The fossil fuels segment is projected to expand at a significant CAGR over the forecast period. The increased population worldwide has led to an increase in demand for energy, particularly in emerging economies.

Application Insight

The transportation segment dominated the global electrification market in 2022 with the largest revenue share. As awareness about air pollution and climate change is rising, the pressure to reduce carbon emissions in the transportation sector is increasing. Furthermore, policies and incentives are being increasingly implemented by several countries in order to promote the usage of EVs as well as other electric transportation technology. In addition, these include credits, tax breaks, and requirements for which automakers create a definite number of zero-emission automobiles. All these factors are expected to support the segment’s growth.

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Market Segmentation

Based on Source

Based on Application

  • Industrial
  • Buildings
  • Transportation

By Geography

  • North America
    • The US
    • Canada
    • Mexico
  • Western Europe
    • Germany
    • France
    • The UK
    • Spain
    • Italy
    • Portugal
    • Ireland
    • Austria
    • Switzerland
    • Benelux
    • Nordic
    • Rest of Western Europe
  • Eastern Europe
    • Russia
    • Poland
    • The Czech Republic
    • Greece
    • Rest of Eastern Europe
  • APAC
    • China
    • Japan
    • South Korea
    • India
    • Australia & New Zealand
    • Indonesia
    • Malaysia
    • Philippines
    • Singapore
    • Thailand
    • Vietnam
    • Rest of APAC
  • Latin America
    • Brazil
    • Colombia
    • Chile
    • Argentina
    • Costa Rica
    • Rest of Latin America
  • Middle East & Africa
    • Algeria
    • Egypt
    • Israel
    • Kuwait
    • Nigeria
    • Saudi Arabia
    • South Africa
    • Turkey
    • United Arab Emirates
    • Rest of MEA

Competitive Landscape

The competitive landscape of the market has also been examined in this report. Some of the major players include

  • ABB Ltd.
  • Siemens
  • Powersys Solutions
  • Enel S.p.A.
  • Duke Energy Corporation
  • Schneider Electric SE
  • General Electric Company
  • ICF International, Inc.
  • Other Key Players

Recent Development of the Electrification Market

  • In May 2022, the launch of PNG Electrification Global Information System Platform was announced by U.S. Agency for International Development. The Electrification Global Information System (GIS) platform would support their off-grid energy suppliers in Papua New Guinea (PNG) to achieve more than 50% of electrification by 2030.
  • In September 2020, Mahindra Electric stated that the MESMA 48 platform (its electrification solution) is currently available to the rest of the world. It is a highly used EV technology solution architecture in the company. The platform is largely scalable and has powered over 11,000 EVs on Indian streets to date. It can power several vehicles, including three-wheelers, motorcycles, and even small cars.

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