Electric Vehicle Reducer Market Size - By Type, By EV, By Sales Channel, By Vehicle, Growth Forecast, 2025 - 2034

Electric Vehicle Reducer Market Size

The global electric vehicle reducer market size was valued at USD 1.7 billion in 2024 and is estimated to register a CAGR of 24.2% between 2025 and 2034. The increasing sales of electric vehicles globally is one of the major factors contributing to the demand for electric vehicle reducers.
 

The global sales of fully electric vehicles and plug in hybrids, in December, reported a 25.6% year on year growth reaching 1.9 million, although it has slowed for the second month in a row. The total EV sale in China increased by 36.5% and reached 1.3 million vehicles in December 2024. This led to the total sale of EVs to 11 million in the year 2024. EV sales in the U.S. and Canada also reported a rise by 8.8% reaching 0.19 million in December, while Europe recorded 0.31 million in sales, an increase of 0.7% compared to same period in the previous year.
 

This rising adoption of electric vehicles by both consumers and corporations is leading to an increase in the EV market and subsequently increasing the demand for drivetrain parts such as reducers. EVs, especially battery electric vehicles, require reducers to lower the high rotational speed of the motor to a usable speed. With the rise in the demand for these vehicles, automakers will then need to meet the demand by manufacturing a greater number of passenger cars, commercial vehicles, and fleet vehicles, which requires increased manufacturing of reducers to meet the demand from automakers, leading to electric vehicle reducer market growth.
 

The growing adoption of electric commercial vehicles and fleets is also driving the need for electric vehicle reducers backed by higher efficiency and torque demands. Trucks, buses, and delivery vans as commercial vehicles serve longer operational hours and require heavy-duty multi-stage reducers for effective load handling. With this growing shift to electric fleets for cost-saving on fuel and emission regulations, the demand for efficient drivetrain parts such as reducers has been increasing. This is in turn boosting the EV reducer market on the commercial vehicle side.
 

Electric Vehicle Reducer Market Trends

• Multi-stage reducers are gaining prominence because commercial motor vehicles and high-performance EVs need higher efficiency and torque. These systems are more beneficial for heavy load vehicles, electric buses and trucks along with premium passenger EVs. They are evolving to provide enhanced power and improved energy savings for these vehicles.
   
• Suzuki Motor Corporation entered into a partnership with Canada’s Inmotive Inc. to jointly develop a two-speed EV transmission for future Suzuki EVs. Inmotive is known for its cutting-edge EV transmission systems. The Ingear transmission is purpose-built for EVs, being lightweight, compact, and efficient, which is one of the best options available. Inmotive states that the system can increase the operational range of EVs by about 15% and enhance acceleration by approximately 15% owing to its patented structure and quiet shifting. The Ingear EV transmission further improves the efficiency of torque utilization in motors and decreases the price while reducing the size and weight of the entire unit. The partnership was formed in January 2023.
   
• Manufacturers of electric vehicles are now focusing on reducing the weight and size of critical drivetrain components. Reducer units are now becoming lighter and more compact without losing their core competencies, which is critical for range and energy efficiency of electric vehicles. This development is necessary for its adoption in smaller EVs and two-wheeled vehicles.
   
• Many automotive companies are adopting integrated e-axle configurations that consolidate the motor, inverter, and reducer into one compact unit. This also simplifies the drivetrain as well as the weight, improving efficiency and e-axle systems are gaining popularity in commercial and passenger EVs.
   
• Recent innovations in materials such as high-strength steels and advanced alloys support the production of more efficient and durable reducers. These alloys and materials help lessen the weight of the reducers, enhancing performance and lifespan, which is important for both commercial and consumer passenger electric vehicles (EVs).
   

Trump Administration Tariff

• The tariffs might result in a disruption in the global supply chain for EV components. Automakers that were heavily dependent on Chinese manufacturers for reducers and other parts are facing delays and increased costs, which affects production schedules and the pricing of the vehicles.
   
• China’s auto parts, along with other goods, have attracted around 125% of tariffs from the U.S. This directly affects the production cost of EV manufacturers that depend on foreign sourced parts, particularly Chinese parts due to its contribution to the supply of important EV component.
   
• The adoption rate of the EVs in the U.S. is expected to slow down due to the additional costs resulting from tariffs. In addition to the higher expenses mentioned, the reduced availability is also expected to affect the demand due to the negative growth in the market resulting in shrinking demand for components such as reducers.
   
• With the aim to reduce the impact of tariffs, some automotive manufacturers are shifting their production base to countries with less restrictive trade barriers. This approach focuses on cost reduction and sustaining competitive advantage, but it may increase the likelihood of more permanent changes to the international supply chain for EV components in the long term.
   

Electric Vehicle Reducer Market Analysis

Based on vehicle, the electric vehicle reducer market is segmented into passenger cars, commercial vehicles, off highway vehicles, and two and three wheelers. In 2024, the passenger vehicles segment was valued at around USD 700 million and held a market share of over 40%.
 

• Sale of electric passenger vehicles have become significant contributors to the EV reducers market for electric vehicles (EVs) globally. The Tesla Model Y and BYD Seal, for example, sell at high volumes and each version requires a reducer as a part of the drivetrain. Statista shared that the sales of EVs in 2024 had reached 13.33 million units. Such figures signify a positive market outlook and the high growth potential for the market.
   
• Automakers are focusing on electric passenger vehicles with dedicated EV platforms. These platforms integrate and adopt reducers as part of their system to lead to improved operational efficiency and performance. With the constant innovation and development of newer passenger vehicle EV models, the demand for reducers is expected to grow in the coming years.
   
• Fuel savings, lower maintenance, and environmental concerns has resulted in rising EV adoption of EV, especially amongst urban populations. Statista reported that, in the U.S., in the year 2022, approximately 22 percent of customers from a metropolitan area were planning to purchase an EV, while this figure decreased to 13 percent in rural areas. EVs remain the easiest option for personal transportation, and as a result, there is a greater number of vehicles on the road.
   
• The ongoing developments in the design of reducers, especially the new compact and lightweight models, increasingly meet the requirements of passenger EVs. This compatibility contributes to the dominance of the passenger vehicle segment in the overall reducer market.
   

Based on the sales channel, the electric vehicle reducer market is segmented as OEM and aftermarket. The OEM segment dominated in 2024 with a market share of around 89%.
 

• The reducers form a fundamental part of the EV drivetrain and are directly integrated in manufacturing by OEMs. As these are not user-serviceable parts, nearly all reducers are factory fitted which gives OEMs substantial market control.
   
• Eaton’s Vehicle Group set up a new dedicated ePowertrain business unit to serve the emerging demands of the electric vehicle (EV) market with commercial and light-duty integrated solutions in February 2022. This unit also brings together Eaton’s electric vehicle transmission, speed reducer, and differential products, allowing the company to better serve global automakers with integrated ePowertrain products and leverage existing synergies across the business groups.
   
• OEMs frequently demand reducers that are customized to specific EV architectures and performance criteria. These reducers are designed after discussing and cooperating with OEMs and their Tier 1 suppliers, which makes OEMs the primary sales channel.
   
• OEM demand for reducers is growing equally with the expansion of global EV production from major players like Tesla, BYD, Hyundai, and Volkswagen. Consistent, high-volume production guarantees easy, large-scale procurement through OEM supply chains.
   

Based on type, the electric vehicle reducer market is segmented as single-stage reducers and multi-stage reducers. The single-stage reducers segment led the market in 2024.
 

• Single stage reducers are less expensive to manufacture and easier to integrate in existing vehicle architecture due to their simple design and reduced number of components needed. This makes them a preferred option for mass-market EVs and keeps automotive manufacturers economically competitive.
• Single stage reducers are smaller and lighter in weight than the multi-stage reducers. This characteristic helps improve the vehicle efficiency and driving range, which is an important factor in compact and mid-sized EVs with limited space available.
   
• Adoption of single-stage reducers across multiple EV platforms leads to increased production and economies of scale. This drives market standardization for these products and increases market share further.
   
• Reduced costs associated with maintenance and long-term operating expenses make single-stage reducers appealing to both manufacturers and consumers. Their simpler structure, fewer moving parts, and increased reliability contribute to its higher preference.
   

Based on EV type, the electric vehicle reducer market is segmented as BEV, PHEV, FCEV, and HEV. The BEV segment led the market in 2024.
 

• The battery electric vehicle (BEV) is the largest segment of the electric vehicle market and sells as a major percentage of total EV sales. It is estimated that the BEV market growth will reach USD 1 trillion by 2032, backed by a CAGR of 15%. Their market share is expected to increase further as governments around the world are encouraging the adoption of zero-emission vehicles. This growth in the production of BEVs in turn contributes to the demand for reducers. This is because every BEV is fitted with a reduction gearbox to convert the high-speed rotation of the motor into usable torque for driving the wheels.
   
• Battery electric vehicles are equipped only with an electric motor, an inverter, and a reduction gearbox, unlike hybrid or fuel cell vehicles that have more complex systems. The absence of multi-speed transmission increases the relevancy of reducers. Single-stage reducers are the preferred choice for BEVs because the electric motor’s extensive torque range along with many other features make it a great fit for vehicles that rely heavily on electric propulsion.
   
• To maximize the performance and range of BEVs, high-efficiency drivetrains are typically required, and the reducer is critical in optimizing motor output. A well-engineered reducer enables better energy transfer so that losses are minimized, increasing overall efficiency. Improving efficiency is particularly important for BEVs as extending driving range is a primary concern for both consumers and manufacturers. The growing market and adoption of BEVs, coming alongside advancements in reducing technology, create a demand for more efficient reducers in this space.
   

Asia Pacific dominates the global electric vehicle reducer market with a major share of over 35% and the China led the market in the region and was valued at around USD 163.9 million in 2024.
 

• China is one of the major EV markets in the world and holds a dominant position in global EV production and sales. According to Statista's report of 2023, China alone produced approximately 6.7 million battery electric vehicles, which is an increase of 22 percent on a year-over-year basis. The consumption of electric passenger cars as well as buses and two wheelers create enormous demand for drivetrain parts like reducers. This allows the country to establish a strong market for reducers.
   
• China has a robust vertically integrated manufacturing ecosystem which includes local production of electric vehicle components such as motors, reducers, gear sets, and e-axles. Domestic suppliers can meet high volume orders efficiently and at low costs. This vertically integrated manufacturing ecosystem provides China with a competitive edge in the global supply market.
   
• China’s government has actively encouraged EV development by introducing and encouraging the use of subsidies, tax cuts, and electrification policy. These policies support the domestic adoption and production, which in turn increases the overall market requirement for fabrication systems such as reducers.
   
• China is not only a leading consumer, but also a global distributor of EV components. A number of global automobile manufacturers and tier 1 vendors purchase reducers and associated components from Chinese producers because of the low cost and high-volume manufacturing capabilities. This strengthens the presence of China in the reducer market globally.
   

The growth forecast for the electric vehicle reducer market in Germany from 2025 to 2034 is highly encouraging.
 

• Germany's advanced engineering techniques and manufacturing gives the country considerable technological power and advantage. This helps the country remain competitive in the global supply chain of EVs. The country’s investments in research and innovation in integration, miniaturization, and efficiency of lightweight reducer systems helps the country in maintaining a significant market share.
   
• German suppliers are known for their high standards for OEM parts, which are usually used in high-end electric vehicles due to their unparalleled standards in precision, reliability, and endurance. Low noise and high torque demand advanced reducer systems, ensuring continued dominance in Germany’s reducer market.
   
• Major Tier 1 automobile parts manufacturers like ZF Friedrichshafen, Schaeffler AG as well as Bosch have their headquarters in Germany and are known for their drivetrain technologies globally. The advanced reducer systems developed by these companies are installed into numerous domestic and foreign EVs, helping the country gain a substantial share of this market.
   

U.S. is expected to show remarkable and promising development in the electric vehicle reducer market from 2025-2034.
 

• The U.S. has gained and maintains its global leadership in advanced engineering and innovation, particularly related to electric mobility and drivetrain systems. Businesses actively work on and invest in the design of reducers for EVs, as they are critical components in EVs. These parts are integrated into complete e-axles or e-drives, and their design determines system efficiency.
   
• American have developed and deploy advanced automation and effective manufacturing systems for the production of drivetrain systems. This helps manufacture components such as the reducers at pre-defined standards and in competitive quantities. This helps meet the country meet both the domestic and international demands.
   
• Government incentives such as tax credits, regulations on fuel economy, and infrastructure spending are driving the adoption of EVs. With the domestic production of EVs increasing, the supply needs for critical parts, such as reducers, are rising, thereby strengthening the U.S. market position.
   

The electric vehicle reducer market in Mexico is expected to experience significant and promising growth from 2025 to 2034.
 

• Mexico is a significant automotive industry, and the country manufactures more than three million cars annually, of which around 80% cars are exported to the U.S. It is also a growing market for electric vehicles. From January to June of 2024, around 54,000 hybrid and electric vehicles were purchased in the country. This indicated an increase of 80% compared to the same time in 2023.
   
• Mexico provides economical and cost-effective manufacturing opportunities alongside skilled workers and closeness to important markets such as the U.S. and Canada. This promotes investment and manufacturing the large quantities of EV components, such as reducers, particularly for budget EVs and mid-range electric vehicles produced in North America.
   
• There is a significant increase in the amount of private sector and government funding allocated to EV power infrastructure, localized EV component production, and the domestic supply chain for reducers. These efforts help the country in promoting EV market growth and supply chain in Mexico, thus expanding their position in the international EV market.
   

Electric Vehicle Reducer Market Share

Top 7 companies leading the electric vehicle reducer industry in 2024 were ZF Friedrichshafen, BorgWarner Inc., Robert Bosch, Schaeffler AG, GKN Automotive, Magna International, and Nidec Corporation. Together, they held around 35% of the market share.
 

• ZF Friedrichshafen possesses a considerable market share related to drivetrain technologies and the EV sector. The organization manufactures and provides EV reducers, e-axles, powertrain systems, and single-stage reducers with high torque and efficiency. Due to ZF’s deep understanding of electric drivetrains and their partnerships with automotive manufacturers, the company has gained a significant share of the market.
   
• BorgWarner has established itself in the electric vehicle industry, concentrating on electric powertrains and high-efficiency reducers. eGearDrive which offers compact high-performance reduction gear systems for EVs, is a major product of the company. The company's strong innovation and research in the automotive industry, electric and hybrid vehicles have helped them position themselves as a significant player in the EV reducer market.
   
• Robert Bosch is one of the significant manufacturers of automotive components and actively develops EV powertrain components, making it a dominant supplier of electric vehicle reducers. Bosch’s advanced electric axle drives, and reduction gears help maximize torque and overall performance, thus improving the vehicle capabilities. Bosch’s strong relations with leading car manufacturers help the company position themselves as a reliable partner in this market.
   
• Schaeffler is a key player in the drivetrain sector, particularly recognized for the technology of electric vehicle reducers as well as other components. The company’s e-mobility products also include advanced e-axle and reduction gear systems aimed at optimizing the efficiency of EVs. In addition, Schaeffler is a leader in producing compact and highly efficient reducers to modern electric vehicle specifications.
   
• GKN Automotive is a dominant provider of electric and hybrid vehicle drivetrain technologies, including high-performance reducers. This company is recognized for its seamless e-axle and powertrain assembly design integration into electric vehicle platforms. The growth of the company in the electric vehicle industry is due to their remarkable compact and lightweight durable reducer technology.
   

Electric Vehicle Reducer Market Companies

Major players operating in the electric vehicle reducer industry include:

• Aichi Machine Industry
• BorgWarner
• GKN Automotive
• Hyundai Transys
• Jatco
• Magna International
• Nidec
• Robert Bosch
• Schaeffler
• ZF Friedrichshafen
   

• The competition is fueled by technological innovations in the EV industry. Companies are working towards developing smaller and cheaper reducers that enhance the vehicle’s range, efficiency, and performance. Market competition is also led by the capability of offering innovative options like integration with e-axle systems and the use of novel advanced materials.
   
• The market faces competition from both the start-ups and niche players that focus on advanced technologies. These companies usually prioritize designing and developing highly specialized reducers for EVs such as performance electric vehicles and two-wheelers. Their innovations in efficiency, weight, and materials can lead to healthy and innovative competition among both traditional and newer players.
   
• To stay competitive and ahead of competitors, many companies are entering into strategic alliances and collaborations with other suppliers, automakers, and technology companies. With their combined expertise and resources, these companies are accelerating the development of next-generation EV powertrains and reducers, enhancing specific capabilities in the supply chain infrastructure as well as market reach and accessibility.
   

Electric Vehicle Reducer Industry News

• InfiMotion Technology introduced L402, a revolutionary 12-in-1 Electric Drive Unit (EDU) electric vehicle (EV) powertrain which claims to be the most advanced integration of powertrain modules for EVs to date, in April 2025. It directly integrates several pieces of essential hardware and software systems into one compact unit. This elegantly solves the issues of volume, weight, cost, and system complexity in EVs. The L402 integrates and incorporates the following components and functions such as E-motor, Reducer, Motor Control Unit (MCU), Onboard Charger (OBC), DC/DC Converter, Power Distribution Unit (PDU), and a Battery Management System (BMS)
   
• In January 2025, JATCO marked the opening of a new plant in Sunderland, UK, which will manufacture electric vehicle (EV) powertrains. This plant is JATCO’s first manufacturing facility in Europe and is set to produce state-of-the-art 3-in-1 EV powertrains where the motor, inverter, and reducer are miniaturized into a lightweight system. These powertrains will serve Nissan's nearby Sunderland vehicle assembly plant, aiding Nissan's EV36Zero initiative that intends to roll out all-electric vehicles, including future iterations of the Qashqai, JUKE, and a LEAF successor.
   
• In December 2024, ZF Electric Mobility Systems (Shenyang) Co., Ltd officially opened its third e-mobility plant in the Hunnan District of Shenyang, China. The facility specializes in manufacturing new advanced electric axle drives designed majorly for new electric vehicles. This will help the company meet its dual aim of growing in the Chinese electric vehicles market and supporting their global electrification plan. The firm manufactures electric axle drives fully covering front and rear axles and based on ZF’s modular electric drive platform. Integrated electric motors, power electronics, and reducers composed into a three-in-one drive make these units stand as one of the key components.
   
• In February 2022, Seojin Automotive expanded its reducer business to include EVs to their product portfolio. The company was earlier focused on developing transmission systems for ICE along with clutch separable components. Now, it is aiming to increase its footprint in the EV market. They aim to increase the sales of EV parts to 30% within five years, a significant increase from the current single-digit figure.
   

The electric vehicle reducer market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Bn) and shipments (units) from 2021 to 2034, for the following segments:

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Market, By Type

• Single-stage reducers
• Multi-stage reducers

Market, By EV

• BEV
• PHEV
• FCEV
• HEV

Market, By Sales Channel

• OEM
• Aftermarket

Market, By Vehicle

• Passenger cars
  • Sedan
  • SUV
  • Hatchback
• Commercial vehicle   
  • LCV
  • MCV
  • HCV
• Off highway vehicle   
• Two and three wheelers       

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Southeast Asia 
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • South Africa
  • Saudi Arabia