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Thermal Systems Market Value Expansion And Long-Term Growth Outlook
The thermal systems market size has shown consistent expansion over recent years. Projections indicate an increase from $50.61 billion in 2025 to $52.78 billion in 2026, demonstrating a compound annual growth rate (CAGR) of 4.3%. Historically, this growth was influenced by factors such as the initial adoption of conventional cooling systems, the creation of heat exchangers for industrial applications, a rise in demand for HVAC components, the enlargement of automotive thermal systems, and a dependence on manual temperature regulation methods.
The thermal systems market is anticipated to experience consistent expansion over the upcoming years, projected to reach $62.51 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 4.3%. This projected growth during the forecast period is fueled by factors such as the increasing integration of thermal systems in electric vehicles, the escalating requirement for cooling batteries and power electronics, the advancement of automated industrial thermal control, the wider availability of high-efficiency thermal components, and a rising call for solutions that recover waste heat. Key developments expected during this period include the evolution of smart thermal management systems, the incorporation of IoT-enabled solutions for thermal monitoring, the broadening of thermal regulation technologies for electric vehicles, the creation of AI-driven platforms for heat optimization, and the embrace of sustainable, energy-efficient thermal components.
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Thermal Systems Market Growth Drivers: What Factors Are Accelerating Expansion?
The thermal systems market is anticipated to expand in the coming years due to the increasing demand for electric vehicles. These vehicles, known as battery electric vehicles (BEVs), operate with an electric motor rather than an internal combustion engine. Thermal systems are essential for regulating optimal temperatures in key components such as battery packs, power electronics drives, and electric motors, as well as managing both internal and external temperatures within electric vehicles. For instance, data from December 2024, provided by the U.S. Energy Information Administration (EIA), a US-based federal statistical agency under the Department of Energy, indicated that sales of electric and hybrid vehicles in the United States reached a new peak in the third quarter of 2024. Combined sales of hybrid, plug-in hybrid electric, and battery electric vehicles constituted 21.2% of overall new light-duty vehicle sales, an increase from 19.1% in the preceding quarter. This growth was primarily fueled by battery electric vehicles, whose market share rose from 7.4% to 8.9%, while hybrid vehicles also achieved a record 10.6% share of total sales. Consequently, the increasing demand for electric vehicles is propelling the expansion of the thermal systems market.
Thermal Systems Market Segments: Where Are The Largest Growth Opportunities?
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 Growth Trends: What Is Influencing The Future Outlook?
Major companies within the thermal systems market are increasingly focusing on advanced innovations like air-to-water (ATW) heat pumps that utilize natural refrigerants. This strategic emphasis aims to enhance energy efficiency, reduce carbon emissions, ensure compliance with regulations, and contribute to global decarbonization efforts. These air-to-water heat pumps, employing natural refrigerants such as R290 (propane), function by extracting heat from the air to supply heating, cooling, and domestic hot water, thereby minimizing their environmental impact. An illustrative example occurred in October 2025 when Mitsubishi Heavy Industries Thermal Systems, Ltd., a Japan-based manufacturer specializing in 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 boast high-temperature water heating capabilities, operate quietly, and are designed for easy installation, aligning perfectly with Europe’s increasingly strict environmental regulations and supporting carbon neutrality under the MHI Group’s MISSION NET ZERO initiative.
Thermal Systems Market Major Participants And Competitive Dynamics
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 Region Leads By 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.