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Thermal Systems Market Growth From $14.24 Billion In 2026 To $19.82 Billion By 2030 At A CAGR Of 8.6%
The thermal systems market has experienced consistent expansion in recent years. This market is projected to grow from $50.61 billion in 2025 to $52.78 billion in 2026, registering a compound annual growth rate (CAGR) of 4.3%. The drivers for its historical growth are attributed to the early adoption of traditional cooling systems, the development of heat exchangers for industrial uses, an increase in HVAC component demand, the expansion of automotive thermal systems, and a reliance on manual temperature control technologies.
The market for thermal systems is projected to experience consistent expansion over the upcoming period. This market is set to reach $62.51 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 4.3%. This anticipated growth during the forecast timeframe stems from several factors, including the expanding use of thermal systems in EVs, a greater requirement for cooling batteries and power electronics, the development of automated industrial thermal control, the wider availability of high-efficiency thermal components, and a growing call for waste heat recovery solutions. Key trends anticipated during this period encompass the progression of smart thermal management systems, the incorporation of IoT-powered thermal monitoring, the proliferation of electric vehicle thermal control innovations, the creation of AI-driven heat optimization platforms, and the uptake of eco-friendly, energy-efficient thermal components.
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Thermal Systems Market Growth Momentum: What Factors Are Shaping Demand?
The increasing demand for electric vehicles is anticipated to propel the expansion of the thermal systems market in the upcoming years. These vehicles, known as battery electric vehicles (BEVs), operate using an electric motor rather than an internal combustion engine. Thermal systems are essential for sustaining optimal temperatures in battery packs, power electronics drives, and electric motors, alongside regulating both external and internal temperatures within electric vehicles. For example, in December 2024, the U.S. Energy Information Administration (EIA), a US-based federal statistical agency under the Department of Energy, reported that the share of electric and hybrid vehicle sales in the United States reached a record high in the third quarter of 2024. Sales of hybrid, plug-in hybrid electric, and battery electric vehicles collectively represented 21.2% of total new light-duty vehicle sales, an increase from 19.1% in the preceding quarter. This growth was largely led by battery electric vehicles, which saw their market share rise from 7.4% to 8.9%, while hybrid vehicles also attained a record 10.6% share of total sales. Hence, the escalating demand for electric vehicles is a key driver for the growth of the thermal systems market.
Thermal Systems Market Segmentation: How Does The Market Break Down By Category?
The thermal systems market covered in this report is segmented –
1) By Component: Air Filter, Condenser, Compressor, Water Pump, Motor, Heat Exchanger, Heater Control, Thermoelectric Generator, Other Components
2) By Vehicle: Internal Combustion Engines (ICE), Electric, Off-Vehicle And ATV
3) By Application: Front And Rear A Or C, Powertrain, Seat, Steering, Battery, Motor, Power Electronics, Waste Heat Recovery, Sensor
Subsegments:
1) By Air Filter: HEPA Filters, Electrostatic Filters, Activated Carbon Filters
2) By Condenser: Air-Cooled Condensers, Water-Cooled Condensers, Shell And Tube Condensers
3) By Compressor: Reciprocating Compressors, Rotary Compressors, Scroll Compressors
4) By Water Pump: Centrifugal Pumps, Positive Displacement Pumps, Submersible Pumps
5) By Motor: AC Motors, DC Motors, Servo Motors
6) By Heat Exchanger: Shell And Tube Heat Exchangers, Plate Heat Exchangers, Air-Cooled Heat Exchangers
7) By Heater Control: Thermostats, Control Valves, Electronic Controllers
8) By Thermoelectric Generator: Module-Based Generators, System-Based Generators
9) By Other Components: Expansion Valves, Sensors And Thermocouples, Ducts And Fittings
Thermal Systems Market Trends Redefining Industry Growth
Leading companies in the thermal systems market are concentrating on advanced innovations like air-to-water (ATW) heat pumps, which employ natural refrigerants, to enhance energy efficiency, decrease carbon emissions, ensure compliance with regulations, and support global decarbonization efforts. These air-to-water heat pumps, utilizing natural refrigerants such as R290 (propane), extract heat from the air to provide heating, cooling, and domestic hot water while minimizing their environmental impact. As an illustration, in October 2025, Mitsubishi Heavy Industries Thermal Systems, Ltd., a Japan-based manufacturer of HVAC and refrigeration solutions, introduced two new models from its “Hydrolution EZY” series of air-to-water heat pumps for the European market, which operate using R290 refrigerant. These new units offer high-temperature water heating capabilities, operate silently, and are simple to install, aligning with Europe’s stricter environmental regulations and contributing to carbon neutrality under MHI Group’s MISSION NET ZERO initiative.
Thermal Systems Market Competitive Overview And Top Companies
Major companies operating in the thermal systems market are Continental AG, Denso Corporation, Dana Incorporated, Grayson Thermal Systems, Gentherm Inc., Hanon Systems, Lennox International Inc., Modine Manufacturing Company Inc., MAHLE GmbH, Robert Bosch GmbH, Valeo SA, Visteon Corporation, Schaeffler Technologies AG & Co. KG, Johnson Electric Holding Ltd., Sanden Corp., Diakin Industries Ltd., Calsonic Kansei Corp., BorgWarner Inc., ZF Friedrichshafen AG, Honeywell International Inc., Parker Hannifin Corporation, Siemens AG, Aavid Thermalloy LLC, Advanced Cooling Technologies Inc., Boyd Corporation, Delta Electronics Inc., Laird Technologies Inc., Lytron Inc., Nortek Air Solutions LLC, Thermacore Inc., Thermotek Inc., Vertiv Co., Wakefield-Vette Inc.
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Thermal Systems Market Regional Analysis: Which Geography Leads On Revenue?
North America was the largest region in the thermal systems market in 2025. The regions covered in the thermal systems market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
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Wasay has over a decade of experience in market research, data modelling, and analytics, with prior experience at GlobalData and Decision Tree Consulting Services. At The Business Research Company , he leads research operations across syndicated studies, customized consulting engagements, and the Global Market Model platform. His professional experience includes supporting organizations such as Boston Consulting Group, KPMG, and Ernst & Young. Wasay holds a degree in Electronics and Communications Engineering, postgraduate management qualifications from International Management Institute Belgium and Indian School of Business and Entrepreneurship, and completed the Integrated Program in Business Analytics from Indian Institute of Management Indore.
