Automotive Thermal System Market –Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Vehicle Type (Passenger Cars, Commercial Vehicles), By Propulsion (ICE, BEV), By Application Type (HVAC, Powertrain Cooling, Fluid Transport, Others), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 40.84 Billion
CAGR (2026-2031)	3.48%
Fastest Growing Segment	BEV
Largest Market	North America
Market Size (2031)	USD 50.14 Billion

Market Overview

The Global Automotive Thermal System Market will grow from USD 40.84 Billion in 2025 to USD 50.14 Billion by 2031 at a 3.48% CAGR. The Global Automotive Thermal System Market comprises technologies designed to regulate the temperature of the engine, drivetrain, and cabin, including HVAC units and battery thermal management systems. A primary driver for this market is the rapid acceleration of vehicle electrification, which necessitates advanced thermal solutions to maintain optimal battery performance, alongside stringent emission regulations demanding improved fuel economy. This industrial shift is substantiated by recent statistics. According to the China Association of Automobile Manufacturers, in 2024, the sales of new energy vehicles reached 12.87 million units with an annual increase of 35.5 percent.

Despite these favorable growth conditions, the market faces a significant challenge regarding the high cost and technical complexity associated with advanced thermal management architectures. Modern electric vehicles require intricate systems involving heat pumps and multiple coolant loops, which significantly elevate manufacturing expenses and complicate supply chain logistics. These elevated costs can hinder mass adoption in price sensitive emerging markets and potentially slow the overall expansion of the automotive thermal system sector.

Key Market Drivers

Accelerated adoption of electric and hybrid vehicles is the fundamental catalyst propelling the Global Automotive Thermal System Market. Unlike internal combustion engines, electric vehicles require complex thermal management architectures for battery packs, inverters, and electric motors to ensure operational safety and maximize driving range. This structural shift creates substantial demand for specialized components such as battery chillers, electronic expansion valves, and coolant loops. According to the International Energy Agency (IEA), May 2025, in the 'Global EV Outlook 2025', global electric car sales were up 35 percent year-on-year in the first three months of 2025. This surge underscores the industry's deepening reliance on advanced thermal regulation technologies to support the mass deployment of electrified platforms.

Simultaneously, the market is being shaped by a critical focus on battery thermal management efficiency to address consumer concerns regarding range anxiety and charging speeds. As automakers introduce high-voltage architectures for faster charging, the thermal load on battery systems increases, necessitating high-performance liquid cooling and heat pump solutions to maintain stability. According to Hanon Systems, October 2025, in the 'Third Quarter 2025 Financial Results', electrified-vehicle sales accounted for 28 percent of the company's total revenue. This figure highlights the strategic pivot of major suppliers toward electrification-centric components. Reflecting the broader industrial momentum, according to Valeo, in 2025, the company reported an order intake of 11.8 billion euros for the first half of the year, representing a 30 percent increase supported by strong performance in thermal and electrification systems.

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Key Market Challenges

The high cost and technical complexity associated with advanced thermal management architectures present a substantial barrier to the expansion of the Global Automotive Thermal System Market. As manufacturers transition toward electrification, the requirement for intricate systems involving heat pumps, multiple coolant loops, and precise temperature control mechanisms significantly increases the bill of materials. This complexity not only elevates production expenses but also creates logistical hurdles within the supply chain, making it difficult for automakers to achieve economies of scale rapidly. Consequently, these elevated manufacturing costs are often passed down to the consumer, keeping the retail price of electric vehicles high and dampening demand in price-sensitive regions.

This economic pressure directly correlates with a slowdown in vehicle adoption rates, which in turn limits the volume of thermal systems required by OEMs. The impact of such market dynamics is evident in recent industry performance data. According to the German Association of the Automotive Industry (VDA), in 2024, the new registrations of electric vehicles in Germany declined by 18 percent compared to the previous year. Such a contraction in a leading automotive market illustrates how cost-related barriers and fluctuating demand can directly impede the broader trajectory of the thermal system sector.

Key Market Trends

The Development of Integrated Thermal Management Modules (ITMM) is reshaping the market by consolidating complex coolant circuits into unified manifolds, thereby reducing weight and assembly costs while optimizing energy distribution. As electric vehicles require precise temperature regulation for the battery, cabin, and power electronics, manufacturers are moving away from decentralized components toward these centralized units that dynamically route thermal energy. This consolidation is gaining significant commercial traction among major tier-1 suppliers as they transition to modular architectures. According to MAHLE, April 2025, in the 'MAHLE holds its ground in a difficult market environment' press release, the company secured a record-breaking order for a thermal management module with a volume of 1.2 billion euros, marking the largest single order in its history. Such high-value contracts indicate a decisive industry pivot toward integrated systems that streamline supply chains and enhance overall vehicle efficiency.

The Shift Toward 800V Electrical Architectures for Reduced Heat Generation is simultaneously driving demand for high-performance thermal components capable of managing the intense heat spikes associated with ultra-fast charging. Higher voltage systems enable rapid energy replenishment but impose severe thermal stress on power electronics and battery cells, necessitating the deployment of advanced silicon carbide (SiC) inverters and robust liquid cooling loops. This transition to high-voltage platforms is directly influencing financial performance and product uptake for specialized component manufacturers. According to BorgWarner, October 2025, in the 'Third Quarter 2025 Results' report, the company achieved net sales of 3,591 million dollars for the quarter, an increase of approximately 4.1 percent driven largely by growth in light vehicle eProduct sales. This growth trajectory underscores the critical role of advanced thermal and electrical technologies in supporting the mass commercialization of next-generation 800V electric vehicle platforms.

Segmental Insights

The Battery Electric Vehicle segment constitutes the fastest-growing category within the global automotive thermal system market. This trajectory is primarily driven by stringent emission mandates from regulatory entities like the European Commission and the United States Environmental Protection Agency, which compel manufacturers to transition toward zero-emission platforms. Unlike internal combustion engine vehicles, electric models require dedicated thermal management architectures to maintain optimal battery operating temperatures and ensure system efficiency. This structural shift in vehicle design increases the requirement for thermal components per unit, directly supporting the rapid expansion of this segment.

Regional Insights

North America holds the leading position in the global automotive thermal system market, driven by a robust manufacturing sector and increasing electric vehicle adoption. This dominance is primarily supported by stringent fuel economy and emission standards enforced by the National Highway Traffic Safety Administration and the Environmental Protection Agency. These regulatory mandates compel automotive original equipment manufacturers to integrate efficient thermal management components that optimize vehicle performance and reduce energy consumption. Furthermore, the established presence of major industry players in the United States and Canada ensures the continuous integration of these essential systems across passenger and commercial segments.

Recent Developments

• In October 2024, Valeo expanded its collaboration with TotalEnergies to develop improved thermal management technologies for electric vehicle batteries. The partnership focuses on immersive cooling solutions, where battery cells are directly cooled by a high-performance dielectric fluid. This approach is intended to manage thermal output more effectively than traditional methods, thereby ensuring battery safety and enabling faster charging speeds. The companies aim to optimize battery performance while reducing the carbon footprint associated with electric transportation. This joint effort combines expertise in automotive thermal systems and fluid engineering to address the technical challenges of modern electric mobility.
• In August 2024, Hanon Systems announced the commercial availability of its fourth-generation heat pump system designed specifically for electric vehicles. This system utilizes a parallel heat source recovery method that captures waste heat from the motor, battery, and external air to manage cabin and battery temperatures effectively. By integrating the refrigerant and coolant control modules into a unified controller, the company created a compact component that helps extend the driving range of electric vehicles. The company also introduced a thin heating, ventilation, and air conditioning unit that reduces the system size by roughly 30 percent, providing additional legroom for passengers.
• In June 2024, Marelli secured a global contract to supply approximately 5 million units of its Battery Thermal Plate to a major automobile manufacturer. Production is scheduled to begin in 2024 to support vehicle platforms in China, North America, and Europe. The thermal management component features a specialized design aimed at optimizing heat exchange and stabilizing battery cell temperatures, which is essential for vehicle performance and safety. The President of Marelli’s Green Technology Solutions business noted that this agreement strengthens the company's collaboration with original equipment manufacturers to deliver efficient thermal energy management solutions for future electric mobility.
• In April 2024, Mahle secured two major contracts totaling nearly €1.5 billion for its thermal management modules, reflecting strong demand for its electrification technologies. One order originated from a global vehicle manufacturer, while the second was awarded by an emerging Asian carmaker. These modules integrate various thermal components into a single unit that regulates temperatures for the battery, cabin, and powertrain. The company indicated that this modular approach can increase an electric vehicle's range by up to 20 percent and support faster charging. This development highlights the shift toward integrated systems that reduce assembly complexity and enhance overall vehicle efficiency.

Key Market Players

• Robert Bosch GmbH
• Dana Limited
• MAHLE GmbH
• Gentherm Inc.
• Hanon Systems
• Denso Corporation
• BorgWarner Inc.
• Valeo
• MODINE MANUFACTURING COMPANY
• Schaeffler Technologies AG & Co. KG

By Vehicle Type	By Propulsion	By Application Type	By Region
Passenger Cars Commercial Vehicles	ICE BEV	HVAC Powertrain Cooling Fluid Transport Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Automotive Thermal System Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Automotive Thermal System Market, By Vehicle Type:

• Passenger Cars
• Commercial Vehicles

• Automotive Thermal System Market, By Propulsion:

• ICE
• BEV

• Automotive Thermal System Market, By Application Type:

• HVAC
• Powertrain Cooling
• Fluid Transport
• Others

• Automotive Thermal System Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE