Market Overview & Projections

The global internal combustion engine (ICE) market stood at approximately 181,836 thousand units in 2022 and is projected to reach 366,726 thousand units by 2030, growing at a CAGR of 9.2% between 2023 and 2030. By 2023 alone, volume had already climbed to an estimated 198,637 thousand units — meaning the market added nearly 17,000 thousand units in a single year, even as EV adoption accelerated globally.

The insight most coverage misses: this is a volume-based forecast, not a revenue forecast — and that distinction matters. ICE unit shipments are still rising even as the narrative around combustion engines is one of decline. The reason is straightforward: EVs are winning new headlines, but ICE units keep multiplying because passenger vehicle demand in emerging economies is growing faster than EV infrastructure can scale to meet it. In other words, the ICE market isn't shrinking — it's being reshaped, running in parallel with electrification rather than being replaced by it in the near term.

A second underappreciated point: the forecast timeline (2023–2030) captures a market that has already weathered its worst disruption. COVID-19 hit engine manufacturing and supply chains hard between 2020 and mid-2021, but the second half of 2021 marked a sharp rebound, and growth from 2022 onward reflects genuine, structural demand recovery — not just a low-base statistical bounce.

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Regional & Segment Breakdown

By region:

• Asia Pacific led the market in 2022 with a 41.6% volume share — the single largest regional bloc — and is also projected to grow the fastest at a 9.6% CAGR through 2030.
• North America follows with an expected 8.9% CAGR, anchored by major manufacturers like General Motors and Ford.
• Europe continues to see ICE activity, but its trajectory is shaped more by regulatory pressure than by demand growth.

By end-use:

• Automotive dominates, holding 68.1% of volume share in 2022, and is also expected to post the fastest end-use CAGR at 9.4% — a combination that signals automotive isn't just the largest slice, it's the segment actively pulling the whole market forward.
• Aircraft is the segment to watch, forecast at an 8.5% CAGR, powered by commercial aviation's need for high-torque engines and multi-fuel capability.
• Marine rounds out the segment split, growing steadily but less dramatically than automotive or aviation.

By fuel type:

• Petroleum holds a commanding 81.6% share (2022) and is still expected to grow fastest among fuel types, at a 9.2% CAGR, largely because gasoline engines remain cheaper, lighter, and lower-vibration than alternatives.
• Natural gas trails in share but is projected to grow at a close 9.0% CAGR, gaining traction as a cleaner-burning, cost-stable alternative — particularly attractive to fleet operators facing volatile diesel and gasoline pricing.

The insight worth highlighting: the fastest-growing sub-segment in every single category — region, end-use, and fuel type — is also the one that already holds the largest current share (Asia Pacific, automotive, petroleum). That's unusual for a maturing industry. It suggests the ICE market isn't being propped up by niche pockets of resistance to electrification; the core of the market is compounding on itself, which points to durability rather than a slow wind-down.

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Key Drivers & Challenges

What's driving growth:

• Hybridization is the biggest structural tailwind — automakers are pairing electric powertrains with ICE units specifically to boost fuel economy, which keeps combustion engines relevant inside vehicles that are technically "going electric."
• Weak EV charging infrastructure, especially outside major cities, continues to make ICE the default, practical choice in large parts of the world.
• Government mandates are cutting both ways but sometimes favor ICE indirectly — India's mandatory flex-fuel engine requirement, for example, pushes manufacturers to keep innovating within combustion technology rather than abandoning it.
• Alternative-fuel ICE innovation is accelerating faster than most consumers realize. Toyota has been developing hydrogen-combustion engines since 2021; Cummins has rolled out near-zero-emission natural gas heavy-duty powertrains; Rolls-Royce is prototyping methanol-fueled marine engines; and JCB has unveiled a hydrogen combustion engine producing zero CO2 at the point of use. This is arguably the most underreported trend in the category — the ICE market's growth engine (so to speak) is shifting from "more gasoline engines" to "more non-traditional-fuel combustion engines."

What's constraining growth:

• Tightening emissions regulations are raising the cost of ICE technology, squeezing thermal efficiency gains and forcing expensive redesigns.
• Rising crude oil prices and long-term fossil fuel scarcity concerns are pressuring per-unit economics.
• Low-Temperature Combustion (LTC) technology — designed to cut NOx and particulate emissions while improving fuel efficiency — remains difficult to commercialize because ignition timing and heat-release control are still unresolved engineering problems.
• Strategic exits are becoming public commitments, not just speculation: Audi confirmed plans to release its final pure combustion-engine vehicle in 2026, and Mercedes introduced its last new combustion engine platform in its sixth-generation E-Class in 2023 — signaling that even as unit volumes grow, some legacy manufacturers are quietly setting internal end-dates for new ICE development.

The Bigger Picture

Put together, the data tells a more nuanced story than "ICE is dying" or "ICE is thriving." It's a market in transition: still growing in raw volume through 2030, still dominated by petroleum and automotive use, but increasingly diversifying into hydrogen, natural gas, and methanol variants as manufacturers hedge against tightening emissions rules. The real story isn't decline — it's adaptation, with the engine itself evolving faster than the fuel that powers it.