June 22, 2024
All Wheel Drive Market

All Wheel Drive Market is Gearing Up for Higher Adoption of Electric Vehicles

The global All Wheel Drive market is poised to witness increased traction owing to growing demand for electric vehicles. All Wheel Drive provides optimal traction and stability for electric vehicles, especially in challenging terrains and extreme weather conditions. The technology helps utilize electric motor’s full torque potential and improves vehicle control and handling characteristics.

All Wheel Drive systems use multiple electric motors and sophisticated torque vectoring techniques to distribute optimum torque to each wheel based on driving conditions. This enhances acceleration, improves handling on slippery roads, allows smooth power delivery, and increases safety. The technology is increasingly being adopted in crossover SUVs, luxury sedans and performance vehicles due to its handling advantages.

The Global All Wheel Drive Market is estimated to be valued at US$ 38.24 Bn in 2024 and is expected to exhibit a CAGR of 7.9% over the forecast period 2024 to 2031.

Key Takeaways

Key players operating in the All Wheel Drive Market Demand are AB Volvo, American Axle Manufacturing, Inc., BorgWarner Inc., Continental AG, Dana Incorporated, GKN Plc, Honda Motor Company Ltd., JTEKT Corporation, Magna International Inc., Nissan Motor Co., Ltd.,, Tesla, Inc., Valeo SA, ZF Friedrichshafen AG.

The growing demand for electric vehicles worldwide is expected to drive the adoption of all wheel drive systems. Automakers are focusing on developing efficient and durable all wheel drive architectures suitable for battery powered cars. Countries are also announcing proposals to ban new internal combustion engine vehicles, which will further boost the electric vehicle market.

The all wheel drive market is expanding globally with automakers planning to launch more all wheel drive variants of their popular models. Companies are also expanding their manufacturing and technological capabilities in major markets like North America, Europe, China and India to cater to the growing demand. Partnerships between automakers and all wheel drive system manufacturers are becoming more common to fast track the incorporation of new technologies.

Market key trends

Adoption of electric vehicles is a major trend in the all wheel drive market presently. Automakers are focusing on developing dedicated electric vehicle platforms with advanced all wheel drive capabilities. This helps improve driving dynamics and handles higher torque levels of electric vehicles better. Technologies like torque vectoring and dynamic torque distribution are becoming standard in premium electric vehicles to utilize full performance potential.

Porter’s Analysis

Threat of new entrants: The all-wheel drive market requires high R&D investment and manufacturing facilities to produce advanced all-wheel drivetrain systems. This poses significant entry barriers for new companies.

Bargaining power of buyers: Buyers have moderate bargaining power in the all-wheel drive market as there are several established brands offering customized options. However, differentiated products give an edge to automakers in price negotiations.

Bargaining power of suppliers: The suppliers of essential raw materials and components like differentials, gearboxes have some bargaining power due to their specialized expertise and capabilities. However, established all-wheel drive systems makers try to avoid dependence on single suppliers.

Threat of new substitutes: Hybrid and electric powertrains are emerging as substitutes, though all-wheel drive still has advantages in extreme weather conditions and provides better traction and handling. The co-existence of multiple technologies ensures limited threat from substitutes.

Competitive rivalry: The all-wheel drive market has fair competition among global automotive giants and established drivetrain suppliers. Players differentiate through continuous technological innovations and customized product offerings.

Geographical Regions

North America holds the largest share of the global all-wheel drive market in terms of value, due to high demand for luxury and premium vehicles in countries like the United States. The need for superior traction in varied terrains and extreme weather conditions drives the adoption of all-wheel drivetrain systems.

The Asia Pacific region is expected to witness the fastest growth during the forecast period, led by high vehicle production and sales in China, Japan, and India. As consumer preferences shift towards enhanced safety, handling and performance, the demand for all-wheel drive vehicles is surging rapidly across emerging economies.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it