Global Exhaust Heat Recovery System Market Assessment, By Vehicle Type [Passenger Vehicles, Commercial Vehicles], By Technology Type [Exhaust Gas Recirculation, Thermoelectric Generator, Organic Rankine Cycle], By Component Type [Turbine, TEG Module, Compressor, Evaporator, Others], By Sales Channel [Original Equipment Manufacturer, Aftermarket], By Region, Opportunities and Forecast, 2018-2032F

Global exhaust heat recovery system (EHRS) market is projected to witness a CAGR of 6.67% during the forecast period 2025-2032, growing from USD 37.67 billion in 2024 to USD 63.14 billion in 2032F, owing to efforts to boost engine fuel economy and reduce emissions through waste heat recapture technologies. It spans multiple industries, including automotive turbochargers, EGR coolers, and industrial Rankine cycles. Asia Pacific leads the global market with the largest share, while technological advances such as thermoelectric generators and organic Rankine cycle units enrich the product mix. Increased environmental standards and sustainability goals worldwide are fostering ongoing adoption and innovation across passenger vehicles, commercial fleets, and industrial applications.

Attributes	Details
Base Year	2024
Forecast Period	2025-2032F
Historical Period	2018-2023
Projected Growth Rate	CAGR of 6.67% between 2025 and 2032
Revenue Forecast in 2032	USD 63.14 billion

In addition, the global market is experiencing a significant need owing to stringent government emission rules and regulations, a surge in goals concerning fuel efficiency, and a significant expansion in industrial and automotive sectors. Furthermore, the foremost drivers comprise energy cost saving and environmental sustainability trends. Whereas the automotive industry, especially electric and hybrid vehicles, is a key adopter. Also, the rapid industrialization and urbanization are projected to drive the Asia-Pacific exhaust heat recovery system market growth in the forecast period. Companies in the global market are planning to launch new products to address the rising demand.

For instance, in September 2024, Heidelberg Materials Egypt launched a pioneering waste heat recovery system at its Helwan Cement plant. This USD 30 million project is designed to convert excess heat from production into 18 MW of clean energy, significantly reducing annual CO₂ emissions by 40,000 tons and supporting Egypt’s sustainability and industrial efficiency goals

Fuel Efficiency Pressure and Stringent Regulations Fuels Exhaust Heat Recovery System Market Demand

Rising fuel prices and volatile energy markets are compelling manufacturers and consumers to seek ways of reducing energy consumption. EHRS allows the conversion of exhaust waste heat into usable energy, enhancing engine thermal efficiency and lowering fuel burn. In addition, the combination of high fuel costs and performance demands is creating a strong impetus for broader EHRS integration. Governments around India, China, Europe, and the U.S. are tightening regulations on tailpipe and carbon emissions for vehicles made after 2023. To meet these new standards, manufacturers will need to embrace technologies such as EGR coolers, turbochargers, and Rankine-based systems to cut down on NOx and CO₂ emissions. These regulatory requirements are crucial in speeding up the deployment of Electric and Hybrid Vehicle Systems (EHRS) in both the automotive and industrial sectors.

Industrial Expansion and Technological Edge to Shape Exhaust Heat Recovery System Market Dynamics

Rapid industrialization, particularly in Asian economies, is boosting demand for waste-heat recovery across sectors such as steel, cement, power generation, and marine systems. EHRS helps these industries reduce reliance on fossil fuels, lower carbon footprints, and meet sustainability targets. Integrating technology, such as combining waste-heat recovery with HVAC or power generation systems, is boosting adoption in large-scale infrastructure and manufacturing. This trend is significantly contributing to the growth of the global exhaust heat recovery system market in the coming years. Due to advancements in materials, heat exchanger design, and modular EHRS components, system efficiency and reliability have seen notable improvements. Also, innovations in thermoelectric generators and organic Rankine cycle units are making EHRS solutions more practical than ever. Moreover, Asia’s competitive production capabilities are driving down manufacturing costs, making these systems more accessible to OEMs and aftermarket retrofits.

Exhaust Gas Recirculation Leads the Global Exhaust Heat Recovery System Market Share

Based on technology type, the exhaust gas recirculation (EGR) segment, including valves, coolers, and related technologies, holds the largest share in the global EHRS market. EGR systems help reduce nitrogen oxide (NOx) emissions and improve fuel economy by recirculating a portion of the engine’s exhaust gas back into the combustion chamber. This process displaces some of the oxygen, lowers peak combustion temperatures, and thus reduces NOx formation. Cooled EGR units recover exhaust heat while simultaneously controlling emission levels.

These systems are widely adopted in both diesel and gasoline engines, especially in commercial fleets and passenger vehicles across Europe, North America, and Asia. Their cost-effectiveness, compatibility with conventional engine architectures, and alignment with stringent regulatory norms make them an attractive solution. As emission targets tighten and hybrid engines proliferate, EGR technology continues to offer scalable, efficient, and regulatory-compliant exhaust heat management. Not only this, but companies globally are also announcing different market growth strategies to expand their market presence and product portfolio, which further shapes the global market growth dynamics.

Asia-Pacific Dominates the Global Exhaust Heat Recovery System Market Size

The Asia-Pacific holds a huge portion of the global EHRS market, due to its extensive automotive production and industrial capabilities. The surge in vehicle sales in countries such as India, China, and Japan is fueling a strong demand for heat-recovery technologies. In response, governments are implementing stricter emission standards, such as BS VI and China 6a, which are encouraging original equipment manufacturers (OEMs) to embrace more efficient emission-control solutions. Additionally, the region benefits from competitive manufacturing costs, driven by a skilled workforce, easy access to raw materials, and a robust presence of OEMs, all of which bolster local production.

Government incentives, public-private collaborations, and foreign investment in R&D are helping accelerate innovation and adoption, driving the Asia-Pacific market growth. Countries such as South Korea and Japan are also leveraging advanced thermal management technologies in hybrid and electric vehicle systems. The region’s combined production scale, regulatory push, and technological progress make it both the largest consumer and one of the most dynamic innovation hubs for EHRS solutions.

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Impact of the U.S. Tariffs on the Global Exhaust Heat Recovery System Market

U.S. import tariffs on heat-exchange components and automotive parts raise the costs of EHRS equipment for manufacturers and OEMs. Higher equipment costs can deter adoption rates in North America, shifting demand toward regional suppliers or more tariff-exempt products. In response, some manufacturers may seek alternative sourcing strategies by relocating production out of tariff-affected regions or negotiating exemptions. These shifts could slow EHRS deployment in the U.S. market while encouraging domestic suppliers to scale up. In turn, innovation may accelerate locally, but global supply chains may become more fragmented.

Report Scope

“Global Exhaust Heat Recovery System Market Assessment, Opportunities and Forecast, 2018-2032F”, is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative and quantitative assessment of the current state of the global exhaust heat recovery system market, industry dynamics, and challenges. The report includes market size, segmental shares, growth trends, opportunities, and forecasts between 2025 and 2032. Additionally, the report profiles the leading players in the industry, mentioning their respective market share, business models, competitive intelligence, etc.

Report Attribute	Details
Segments Covered	Vehicle Type, Technology Type, Component Type, Sales Channel
Regions Covered	North America, Europe, South America, Asia-Pacific, Middle East and Africa
Key Companies Profiled	FORVIA Group, MAHLE GmbH, Continental AG, DENSO Corporation, Honeywell International Inc., Dana Incorporated, Marelli Holdings Co., Ltd., PHINIA Inc., Mitsubishi Heavy Industries, Ltd., Cummins Inc
Customization Scope	15% free report customization with purchase
Pricing and Purchase Options	Avail the customized purchase options to fulfill your precise research needs
Delivery Format	PDF and Excel through email (subject to the license purchased)

In the report, the global exhaust heat recovery system market has been segmented into the following categories: 

• By Vehicle Type
  • Passenger Vehicles
  • Commercial Vehicles
• By Technology Type
  • Exhaust Gas Recirculation
  • Thermoelectric Generator
  • Organic Rankine Cycle
• By Component Type
  • Turbine
  • TEG Module
  • Compressor
  • Evaporator
  • Others
• By Sales Channel
  • Original Equipment Manufacturer
  • Aftermarket
• By Region
  • North America
  • Europe
  • Asia-Pacific
  • South America
  • Middle East and Africa

Key Players Landscape and Outlook

Leading firms emphasize innovation, alliances, and tier 1 OEM collaboration. They invest heavily in R&D to optimize heat-exchange materials, integrate systems seamlessly with powertrains and EGR, and boost conversion efficiencies of Rankine and thermoelectric units. Strategic partnerships and joint ventures across the automotive and industrial sectors are common, enabling access to new markets and accelerating deployment.

Expansion of manufacturing footprints in high-growth regions such as Asia enables cost reduction and localized supply. Several players also offer aftermarket retrofit programs to capture demand from older vehicle fleets. The dual approach of OEM integration and aftermarket services lets them address immediate regulatory pressures while positioning for long-term penetration and diversified revenue streams.

For instance, in April 2024, FORVIA Group completed the full acquisition of Faurecia Aptoide Automotive, taking 100% ownership of the joint venture established in 2019. This move solidifies FORVIA’s leadership in automotive application distribution and strengthens its role as a trusted partner for automakers and app developers worldwide. The acquisition enables greater investment in advanced in-car infotainment solutions and positions FORVIA to set new standards for connected vehicles.

Key Players Operating in the Global Exhaust Heat Recovery System Market are:

• FORVIA Group
• MAHLE GmbH
• Continental AG
• DENSO Corporation
• Honeywell International Inc.
• Dana Incorporated
• Marelli Holdings Co., Ltd.
• PHINIA Inc.
• Mitsubishi Heavy Industries, Ltd.
• Cummins Inc

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