The global electrification market is rising faster at a 8.91% CAGR from 2023 to 2032. A growing number of end users are shifting towards electricity, further boosting the demand for electrification.

Due to growing global warming, governments and companies are aiming to reduce carbon emissions. It requires electrification in order to cut harmful greenhouse gases. The rising advent of technology along with surging industrialization is driving the demand for energy, electrification has become a critical factor in ensuring sustainability. Increasing penetration towards zero emission and a clean environment and rising government initiatives to develop a sustainable source of energy are driving the demand for electrification. Moreover, electricity helps reduce the final demand for energy as it is more efficient than fossil fuels. Electricity saturated with renewable energy alleviates carbon emissions. A growing number of end users are shifting towards electricity, further boosting the demand for electrification.

The global electrification market revenue was valued at USD 73.64 billion in 2022 and it is expanding around USD 172.9 billion by 2032. It is growing at a CAGR of 8.91% from 2023 to 2032.

What is electrification?

Electrification is defined as the process in which fossil fuels are substituted with electricity generated from renewable sources. Electrification is a fuel utilized by the industrial sector to meet their energy requirements. They are not just efficient as compared with other fuels but also require less maintenance. The investment cost of electrical equipment is comparatively lower. The rising development of technology in the renewable industry is adding to the demand. In order to become carbon neutral by 2050, the European Union has raised its climate goals for 2030, aiming for at least a 55% decrease in greenhouse gas (GHG) emissions from 1990. According to this scenario and EU data, the final energy usage percentage of electricity in the EU27 is expected to increase from 23% to 30-31% by 2030 and to between 47% and 60% by 2050.

Market Overview

The electrification market is anticipated to gain momentum in the upcoming years. The growth of the market is attributed to the growing advancement in the automobile sector. The development of new technologies such as energy storage systems, smart grids, and electric vehicles has enabled more efficient and sustainable use of electrical energy. Energy storage systems, for example, allow for the storage of excess energy generated by renewable sources and the release of this energy when demand is high. Smart grids, on the other hand, enable the efficient and automated management of energy distribution and consumption The rising inclination towards electric vehicles is one of the major factors contributing to the growth of the market. Rising environmental concern due to surging pollution and climate change is also proliferating the growth of the market.

Moreover, growing industrialization is also driving the demand for electrification, as electric machines are being extensively used owing to the rising advancement of technology and climate change. Electrification has been proven effective in reducing carbon emissions and promoting sustainable development. Stationery and transportation energy are also expected to drive the growth of the industry.
The rising demand for electric vehicles is to propel the market growth

At the end of 2020, there were just 10 million electric cars on the road across the globe. Electric cars experienced a sharp increase in demand of more than 40% in 2020. The electric bus and truck registration also experienced a major surge. Stringent regulations are imposed by the government of various economies in order to reduce carbon emissions. For instance, by the end of 2020, nearly 20 countries announced a ban on conventional vehicles. Moreover, some countries across the globe also introduced incentives to enhance the sale of electric vehicles.

Governments across the world also spend more than 10 billion to support the sale of electric cars. The future of EV sales looks promising in the near term. Global sales of electric vehicles increased by over 140% in the first quarter of 2021 over the same time in 2020, with sales in China accounting for the majority of that increase.

In 2020, the global electric vehicle stock reached more than 9 million. An increase of more than 40% as compared to 2019. In 2020, battery electric vehicles (BEVs) made up two-thirds of the stock and all new electric car registrations. China has the largest fleet with 4.5 million electric vehicles, but in 2020, Europe experienced the largest yearly rise to approach that number. 500 000 automobiles worldwide, with about 450 000 in Europe. US sales also increased significantly compared to the first quarter of 2020, although starting from a far lower level.

However, the overall market of electric vehicle in Europe suffered a decline in 2020. In general, the European auto market shrank 22% in 2020. However, registrations of new electric vehicles more than doubled to 1.4 million, representing a 10% market share. Germany dominates the large markets.
The number of registrations in the UK more than doubled to 176 000. In Norway, the sales proportion of electric vehicles hit a record high of 75%, an increase of around one-third from 2019. Electric vehicle sales percentages exceeded 50% in Iceland, 30% in Sweden, and 25% in the Netherlands.

The increase in the number of electric car registration in Europe is attributed to the European Union CO2 emissions standards, moreover, the increasing subsidy schemes by the European government also boosted the sale of the vehicles.

Impact of COVID-19

The outbreak of the coronavirus pandemic has declined the growth of almost every industry. The lockdown imposed by the government has led to a disruption in the supply chain. The measures negatively impacted the demand for electricity. The decline in the demand for transportation owing to the travel restriction imposed across the globe negatively hampered the growth of the industry.
However, the pandemic also created awareness regarding the sustainability of the environment and led to increasing in the demand for renewable energy. This is expected to propel the growth of the market.

Asia Pacific is expected to grow at the fastest rate

Based on region, the market is bifurcated into North America, Latin America, the Middle East, Europe, Asia Pacific, and Africa. Asia Pacific is anticipated to grow at the fastest CAGR. The growth of the market is attributed to the increasing urbanization along with the developing economies in the region. The government of various countries is promoting electrification in order to reduce carbon emissions.

In Australia, for instance, the government has made public its Long-Term Emissions Reduction Plan, which aims to achieve net zero emissions by the year 2050. The strategy describes a technology-driven method for reaching a net zero economy while considering the effects on important industries, geographical areas, and jobs. The plan is a component of a larger emissions reduction strategy that is centred on the creation and adoption of low-emissions technology. Important elements of this strategy include the Low Emissions Technology Statements and the Technology Investment Roadmap. The market expansion in the region is being fuelled by electrification solutions, which are likely to be encouraged by these policies and incentives.

Key Market Players:

• ABB


• ZAPI GROUP


• Powersys Solutions


• Siemens


• Enel Spa


• Schneider Electric


• Duke Energy Corporation


• General Electric


• Enel X S.r.l.


• ICF International Inc.

Market Segmentation

By Source

• Renewable Energy


• Nuclear Power


• Fossil Fuel-based

By Application

• Transportation


• Industrial


• Buildings

By Geography

• North America


• Europe


• Asia-Pacific


• Latin America


• The Middle East and Africa