Thermal Systems Global Market Report 2026

A thermal system is a complex assembly comprising interlinked components, some of which operate thermally, collaborating to generate internal cold while demonstrating a unified and organized behavior.

The primary constituents of the thermal system include an air filter, condenser, compressor, water pump, motor, heat exchanger, heater control, thermoelectric generator, and other essential elements used across different vehicle types like ICE, electric, off-vehicle, and ATV. Air filters function as devices aimed at purifying the air by removing harmful airborne particles, which have adverse effects on both the environment and human health. These components find applications in various vehicle systems such as front and rear A or C, powertrain, seat, steering, battery, motor, power electronics, waste heat recovery, and sensor technologies.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

Tariffs have affected the thermal system market by raising costs for imported compressors, heat exchangers, motors, electronic controllers, and metallic components used across automotive, industrial, and energy applications. North America, Europe, and Asia-Pacific have experienced higher equipment prices and extended procurement timelines due to supply chain interruptions. However, tariffs are encouraging localized component production, promoting regional sourcing strategies, and driving innovation toward cost-efficient and energy-optimized thermal system technologies.

The thermal systems market research report is one of a series of new reports from The Business Research Company that provides thermal systems market statistics, including thermal systems industry global market size, regional shares, competitors with thermal systems market share, detailed thermal systems market segments, market trends, and opportunities, and any further data you may need to thrive in the thermal systems industry. This thermal systems market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The thermal systems market size has grown steadily in recent years. It will grow from $50.61 billion in 2025 to $52.78 billion in 2026 at a compound annual growth rate (CAGR) of 4.3%. The growth in the historic period can be attributed to early adoption of traditional cooling systems, development of heat exchangers for industrial uses, growth in hvac component demand, expansion of automotive thermal systems, reliance on manual temperature control technologies.

The thermal systems market size is expected to see steady growth in the next few years. It will grow to $62.51 billion in 2030 at a compound annual growth rate (CAGR) of 4.3%. The growth in the forecast period can be attributed to increasing deployment of thermal systems in evs, rising need for battery and power electronics cooling, growth in automated industrial thermal regulation, expansion of high-efficiency thermal components, increasing demand for waste heat recovery solutions. Major trends in the forecast period include advancement of intelligent thermal management solutions, integration of IoT-enabled thermal monitoring systems, expansion of electric vehicle thermal regulation technologies, development of AI-based heat optimization platforms, adoption of sustainable energy-efficient thermal components.

The rising demand for electric vehicles is expected to drive the growth of the thermal systems market in the coming years. Battery electric vehicles (BEVs) operate using an electric motor instead of an internal combustion engine. Thermal systems are essential for maintaining optimal temperatures in battery packs, power electronics, and electric motors, while also managing both internal and external temperatures in 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. Combined sales of hybrid, plug-in hybrid, and battery electric vehicles accounted for 21.2% of total new light-duty vehicle sales, up from 19.1% in the previous quarter. This growth was primarily driven 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. Therefore, the rising demand for electric vehicles is driving the growth of the thermal systems market.

Major companies in the thermal systems market are focusing on advanced innovations, such as air-to-water (ATW) heat pumps using natural refrigerants, to enhance energy efficiency, reduce carbon emissions, ensure regulatory compliance, and support global decarbonization efforts. Air-to-water heat pumps with natural refrigerants like R290 (propane) extract heat from the air to provide heating, cooling, and domestic hot water while minimizing environmental impact. For example, in October 2025, Mitsubishi Heavy Industries Thermal Systems, Ltd., a Japan-based HVAC and refrigeration solutions manufacturer, launched two new models of its "Hydrolution EZY" air-to-water heat pump series for the European market using R290 refrigerant. These units offer high-temperature water heating, operate quietly, and are easy to install, aligning with Europe's stringent environmental regulations and contributing to carbon neutrality under MHI Group's MISSION NET ZERO initiative.

In August 2023, Mission Critical Group (MCG), a US-based provider of electrical equipment solutions, acquired Johnson Thermal Systems (JTS) for an undisclosed amount. This strategic acquisition positions JTS to continue delivering integrated design and manufacturing solutions while gaining access to the comprehensive system design, application engineering, manufacturing, on-site professional services, and ongoing support capabilities offered by the broader MCG platform. Johnson Thermal Systems, a US-based provider of thermal solutions, brings valuable expertise and capabilities to the MCG portfolio, enhancing their position in the thermal systems market.

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.

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.

The countries covered in the thermal systems market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The thermal systems market includes revenues earned by entities by Egr valve, A/C valve, oxygen sensor, temperature sensor, and charge air cooler. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

Thermal Systems Market Global Report 2026 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.

This report focuses thermal systems market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.

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Where is the largest and fastest growing market for thermal systems ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The thermal systems market global report from the Business Research Company answers all these questions and many more.

The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, total addressable market (TAM), market attractiveness score (MAS), competitive landscape, market shares, company scoring matrix, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.

• The market characteristics section of the report defines and explains the market. This section also examines key products and services offered in the market, evaluates brand-level differentiation, compares product features, and highlights major innovation and product development trends.
• The supply chain analysis section provides an overview of the entire value chain, including key raw materials, resources, and supplier analysis. It also provides a list competitor at each level of the supply chain.
• The updated trends and strategies section analyses the shape of the market as it evolves and highlights emerging technology trends such as digital transformation, automation, sustainability initiatives, and AI-driven innovation. It suggests how companies can leverage these advancements to strengthen their market position and achieve competitive differentiation.
• The regulatory and investment landscape section provides an overview of the key regulatory frameworks, regularity bodies, associations, and government policies influencing the market. It also examines major investment flows, incentives, and funding trends shaping industry growth and innovation.
• The market size section gives the market size ($b) covering both the historic growth of the market, and forecasting its development.
• The forecasts are made after considering the major factors currently impacting the market. These include the technological advancements such as AI and automation, Russia-Ukraine war, trade tariffs (government-imposed import/export duties), elevated inflation and interest rates.
• The total addressable market (TAM) analysis section defines and estimates the market potential compares it with the current market size, and provides strategic insights and growth opportunities based on this evaluation.
• The market attractiveness scoring section evaluates the market based on a quantitative scoring framework that considers growth potential, competitive dynamics, strategic fit, and risk profile. It also provides interpretive insights and strategic implications for decision-makers.
• Market segmentations break down the market into sub markets.
• The regional and country breakdowns section gives an analysis of the market in each geography and the size of the market by geography and compares their historic and forecast growth.
• Expanded geographical coverage includes Taiwan and Southeast Asia, reflecting recent supply chain realignments and manufacturing shifts in the region. This section analyzes how these markets are becoming increasingly important hubs in the global value chain.
• The competitive landscape chapter gives a description of the competitive nature of the market, market shares, and a description of the leading companies. Key financial deals which have shaped the market in recent years are identified.
• The company scoring matrix section evaluates and ranks leading companies based on a multi-parameter framework that includes market share or revenues, product innovation, and brand recognition.

Scope

• Markets Covered: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
• Companies Mentioned: 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.
• Countries: Australia; Brazil; China; France; Germany; India; Indonesia; Japan; Taiwan; Russia; South Korea; UK; USA; Canada; Italy; Spain.
• Regions: Asia-Pacific; South East Asia; Western Europe; Eastern Europe; North America; South America; Middle East; Africa
• Time Series: Five years historic and ten years forecast.
• Data: Ratios of market size and growth to related markets, GDP proportions, expenditure per capita,
• Data Segmentations: country and regional historic and forecast data, market share of competitors, market segments.
• Sourcing and Referencing: Data and analysis throughout the report is sourced using end notes.
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