Thermal Systems Market

The thermal systems market for ICE vehicles is projected to reach USD 50.28 billion by 2033 from USD 44.85 billion in 2026, registering a CAGR of 1.6% during the forecast period. Rising vehicle electrification is driving demand for battery cooling, electric compressors, heat pumps, and power-electronics cooling, while conventional HVAC and engine-cooling systems continue to evolve to improve vehicle efficiency and passenger comfort. The increasing integration of thermal management across batteries, electric motors, power electronics, and cabin systems is also shifting the market toward more compact and integrated thermal architectures.

The thermal systems market is led by DENSO Corporation (Japan), MAHLE GmbH (Germany), Hanon Systems (South Korea), Valeo (France), and BorgWarner Inc. (US). Recent developments from these companies highlight the industry's shift toward electrification-focused thermal management, integrated modules, heat-pump systems, battery and power-electronics cooling, and intelligent thermal control. These developments are strengthening the role of thermal management in improving EV efficiency, driving range, charging performance, and overall powertrain operation.

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DENSO Corporation is strengthening its position in the market by consolidating production and reducing product variants by 40%, improving manufacturing flexibility and supply stability. The company is advancing heat-pump and thermal-management technologies to reduce energy consumption for vehicle heating and improve EV driving range. For instance, Denso is also developing waste-heat utilization and energy-saving heating technologies, including systems that use radiant heat to warm occupants more efficiently. These initiatives support the shift toward integrated, energy-efficient thermal systems for electrified vehicles and expand DENSO’s thermal technology portfolio.

MAHLE is strengthening its automotive thermal-management position through eCompressors, heat pumps, heat exchangers, battery cooling technologies, coolant pumps, and integrated thermal-management modules. Its strategy is increasingly focused on combining these technologies into integrated systems that manage the battery, cabin, powertrain, and power electronics, rather than supplying individual thermal components. In 2024, MAHLE secured two thermal-management module orders with a combined value of just under USD 1.69 billion, with the modules integrating components such as eCompressors, heat exchangers, refrigerant valves, and coolant circuits. MAHLE also consolidated its thermal activities and reported USD 6.88 billion in 2025 sales from Thermal and Fluid Systems, while its 2026 India eCompressor facility represents a USD 7.90 million investment with an annual capacity of more than 300,000 units.

Hanon Systems is a major automotive thermal-management supplier with a portfolio spanning eCompressors, heat-pump systems, coolant and refrigerant control modules, HVAC systems, electronic pumps and valves, and front-end cooling modules for EV, hybrid, and ICE platforms. The company is increasingly integrating refrigerant and coolant circuits with heat-pump and electronic control technologies, including highly integrated modules that combine the eCompressor, expansion valves, condenser, heat exchanger, chiller, and sensors. In 2025, Hanon surpassed 1 million cumulative R744 eCompressor units, supporting the Volkswagen MEB platform. In 2026, the company announced a USD 110.8 million direct investment in an eCompressor plant and R&D center in Canada, within a USD 142.16 million total project scope, targeting an annual capacity of up to 1.5 million units by 2034.

Valeo (France) is strengthening its position in automotive thermal systems through integrated powertrain and thermal-management solutions for conventional and electrified vehicles, including heat pumps, front-end cooling modules, HVAC systems, and battery thermal management. The company is combining thermal hardware with software-based energy management to optimize heat flows and reduce energy consumption in EVs. Its portfolio includes smart heat-pump systems, compact front-end cooling modules, smart heating/ventilation/air-conditioning modules, and battery thermal-management systems, alongside e-motor and power-electronics thermal solutions. Valeo indicates thermal-management content of up to EUR 2,400 per battery-electric vehicle, highlighting the increasing value contribution of integrated thermal systems.

BorgWarner is strengthening its position in automotive thermal systems through a portfolio spanning battery eCoolers, power-electronics cooling, high-voltage coolant and air heaters, integrated thermal modules, and high-voltage eFans for BEV, PHEV, and hybrid platforms. The company is increasingly combining these technologies with electrified propulsion and power-electronics systems to manage heat across batteries, inverters, motors, and vehicle cooling circuits. In 2025, BorgWarner secured HVCH programs covering 400V and 800V PHEV applications, while its light-vehicle eProducts grew approximately 23%, supported by demand in Europe and Asia. These developments reflect BorgWarner's strategy of expanding scalable, high-voltage thermal solutions and integrated thermal architectures to increase thermal-system content across electrified vehicles.

Related Reports:

Thermal Systems Market by Application (Front & Rear A/C, Powertrain, Seat, Steering, Battery, Motor, Power Electronics, Waste Heat Recovery, Sensor), Technology, Component, Vehicle (ICE & Electric), and Region – Global Forecast to 2033

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