Military Vehicle Electrification Market Report

Attractive Opportunities

Global Demand Analysis & Sales Opportunities in Military Vehicle Electrification Market 

• The annual demand for military vehicle electrification was USD 3.25 billion in 2024 and is expected to reach USD 3.71 billion in 2025, up 14.2% than the value in 2024.
• During the next 8 years (forecast period of 2025-2032), the military vehicle electrification market is expected to grow at a CAGR of 13.8%. The annual demand will reach of USD 9.21 billion in 2032, which is almost 3 times the demand in 2025.
• During 2025-2032, the military vehicle electrification industry is expected to generate a cumulative sales opportunity of USD 49.0 billion which is almost 3.5 times the opportunities during 2019-2023.

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High-Growth Market Segments: 

• North America is expected to be the dominant and fastest-growing region over the forecasted period.
• By platform type, Combat Vehicles segment accounted for the largest share of the military vehicle electrification market.
• By mode of operation type, Autonomous/Semi-Autonomous segment is projected to be the the fastest-growing segment of this market during the forecast period.
• By technology type, Hybrid segment is projected to be the fastest-growing segment of this market during the forecast period.
• By voltage type, Medium Voltage segment is anticipated to be the fastest-growing segment of this market during the forecast period.

Market Statistics 

Have a look at the sales opportunities presented by the military vehicle electrification market in terms of growth and market forecast.

Market Dynamics

Introduction:

What is military vehicle electrification?

Military vehicle electrification refers to the process of integrating electric or hybrid propulsion systems into military ground vehicles, replacing or supplementing traditional internal combustion engines. It encompasses completely electric, hybrid electric, and plug-in hybrid systems to improve fuel efficiency, lower emissions, decrease thermal and acoustic signatures, and increase operating capabilities. Moreover, electrification supports modern military needs such as stealth, extended range, energy independence, and powering advanced onboard systems.

Market Drivers: 

Defense Modernization Programs

• Defense modernization programs are a key driver of the military vehicle electrification market, as global defense forces increasingly prioritize advanced technologies to enhance operational readiness, mobility, and sustainability. These programs involve systematic upgrades and replacements of legacy military equipment, including the integration of hybrid and fully electric vehicles into ground fleets.
• Electrification is seen as a strategic move to reduce logistical burdens, improve energy efficiency, and provide tactical advantages such as reduced noise and thermal signatures for stealth operations.
• Therefore, the defense modernization efforts are accelerating demand for electric propulsion systems, advanced batteries, and energy management technologies, significantly propelling the growth of the military vehicle electrification market.

Market Challenges: 

High Procurement and Retrofit Costs

• One significant barrier to large-scale electrification of military vehicles is the high upfront investment in replacing existing conventional diesel systems with electric or hybrid-electric systems. It involves end-to-end reengineering of key components such as propulsion systems, energy storage, power distribution networks, and thermal management systems.
• The inclusion of new, high-performance lithium-ion battery packs, high-voltage cable systems, power electronics, auxiliary cooling packages, and advanced control modules, significantly contributes to the initial expenditures.
• Moreover, in the case of main battle tanks or infantry fighting vehicles, the weight and size of battery packs necessary for achieving substantive operational range add to the total costs.

Market Opportunities: 

Rise of hybrid-electric architecture

• The rise of hybrid-electric architecture provides a substantial growth opportunity for the military vehicle electrification market by providing a balanced solution between conventional and fully electric configurations.
• Hybrid setups improve fuel efficiency, increase operational range, and minimize acoustic and thermal signatures, enhancing mission effectiveness. They also offer onboard power generation for advanced systems, thus making them suitable for contemporary, multi-mission military operations across varied environments.

Segments' Analysis

By Technology Type

“Hybrid segment is projected to be the fastest-growing segment of this market during the forecast period.”

• The military vehicle electrification market is segmented by technology type into hybrid and fully electric.
• Hybrid segment is projected to be the fastest-growing segment of this market during the forecast period, due to its ability to combine the advantages of conventional and electric propulsion. It enhances fuel efficiency, reduces logistical burdens, and enables silent mobility for stealth operations.
• Additionally, hybrid systems improve range, reduce thermal and acoustic signatures, and offer reliable performance in diverse combat scenarios, aligning with modern defense modernization goals.

By Voltage Type 

“Medium Voltage (50-600 V) segment is anticipated to be the fastest-growing segment of this market during the forecast period.”

• The military vehicle electrification market is segmented by voltage type into low voltage, medium voltage, and high voltage.
• Medium Voltage (50-600 V) segment is anticipated to be the fastest-growing segment of this market during the forecast period, due to their ability to offer trade system safety, power density, and operational efficiency on a wide set of tactical and combat vehicles.
• Medium voltage is best utilized to supply hybrid drivetrains, battery packs with high power, directed-energy systems, and high-performance sensor sets, all essential subsystems for armored combat vehicles, unmanned ground vehicles (UGVs), and tactical trucks of the future.

Regional Analysis 

“North America is expected to be the dominant and the fastest-growing region over the forecasted period.”

• Based on region, the military vehicle electrification market has been segmented into North America, Europe, Asia Pacific, and the Rest of the world.  
• North America is expected to be the dominant and fastest-growing region over the forecasted period, driven by robust defense budgets & modernization programs, advanced technological capabilities, and strong government support.  
• Moreover, the region is home to leading manufacturers and integrators of military systems, such as General Dynamics, Oshkosh Corporation, Textron Inc., and General Motors, which will further drive the market growth during the forecast period.

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Competitive Landscape

Most of the major players compete in some of the factors, including price, service offerings, regional presence, etc. The following are the key players in the military vehicle electrification market -  

• BAE Systems
• General Dynamics Corporation
• Northrop Grumman Corporation
• Lockheed Martin Corporation
• Oshkosh Defense
• Raytheon Technologies Corporation
• Rheinmetall AG
• Elbit Systems Ltd.
• Navistar International Corporation
• Leonardo S.p.A.

Note: The above list does not necessarily include all the top players in the market.

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Recent Developments/Mergers & Acquisitions: 

• In January 2025, Oshkosh Defence LLC (US), a business unit of Oshkosh Corporation, signed a deal with the Marine Corps to incorporate next-generation autonomous technology into the Remotely Operated Ground Unit for Expeditionary Fires (ROUGE-Fires). 

• In February 2024, ABB (Switzerland) secured an order from Ulstein Verft (Norway) to deliver a cutting-edge power and propulsion system for a new cable-laying vessel (CLV) for Nexans, with a 2026 delivery. The vessel will be the third CLV in thefleet, following Nexans Skagerrak and Nexans Aurora. The integrated system will consist of power generation, energy storage, and electric propulsion to provide safe and efficient cable laying, recovery, and repair

Report Features

This report provides market intelligence most comprehensively. The report structure has been kept so that it offers maximum business value. It provides critical insights into market dynamics and will enable strategic decision-making for existing market players as well as those willing to enter the market.

The following are the key features of the report:

• Market structure: Overview, industry life cycle analysis, supply chain analysis.
• Market environment analysis: Growth drivers and constraints, Porter’s five forces analysis, SWOT analysis.
• Market trend and forecast analysis.
• Market segment trend and forecast.
• Competitive landscape and dynamics: Market share, Service portfolio, New Product Launches, etc.
• COVID-19 impact and its recovery curve.
• Attractive market segments and associated growth opportunities.
• Emerging trends.
• Strategic growth opportunities for the existing and new players.
• Key success factors.

Market Segmentation

This report studies the market, covering a period of 15 years of trend and forecast. The report provides detailed insights into the market dynamics to enable informed business decision-making and growth strategy formulation based on the opportunities present in the market.

The military vehicle electrification Market is segmented into the following categories. 

Military Vehicle Electrification Market, by Platform Type

• Combat Vehicles
• Support Vehicles
• Unmanned Armored Vehicles

Military Vehicle Electrification Market, by Mode of Operation Type

• Manned Vehicles
• Autonomous/Semi-Autonomous Vehicles

Military Vehicle Electrification Market, by Technology Type

• Hybrid
• Fully Electric

Military Vehicle Electrification Market, by Voltage Type

• Low Voltage
• Medium Voltage
• High Voltage

Military Vehicle Electrification Market, by Region

• North America (Country Analysis: The USA, Canada, and Mexico)
• Europe (Country Analysis: Germany, France, Italy, The UK, and Rest of Europe)
• Asia-Pacific (Country Analysis: Japan, China, India, and Rest of Asia-Pacific)
• Rest of the World (Country Analysis: Brazil, Saudi Arabia, and Others)

Research Methodology

• This strategic assessment report from Stratview Research provides a comprehensive analysis that reflects today’s Military Vehicle Electrification market realities and future market possibilities for the forecast period. 
• The report segments and analyzes the market in the most detailed manner to provide a panoramic view of the market.
• The vital data/information provided in the report can play a crucial role for market participants and investors in identifying the low-hanging fruits available in the market and formulating growth strategies to expedite their growth process.
• This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with Stratview Research’s internal database and statistical tools.
• More than 1,000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles, have been leveraged to gather the data.
• We conducted more than 15 detailed primary interviews with market players across the value chain in all four regions and industry experts to obtain both qualitative and quantitative insights.

Customization Options

With this detailed report, Stratview Research offers one of the following free customization options to our respected clients:

Company Profiling

• Detailed profiling of additional market players (up to three players)
• SWOT analysis of key players (up to three players)

Competitive Benchmarking

• Benchmarking of key players on the following parameters: Service portfolio, geographical reach, regional presence, and strategic alliances

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