Electric Propulsion System Market Size, Share, Growth, and Industry Analysis, By Type (Gridded Ion Engine (GIE), Hall Effect Thruster (HET), High Efficiency Multistage Plasma Thruster (HEMPT), Pulsed Plasma Thruster (PPT) and Other), By Application (Nano Satellite and Microsatellite), and Regional Forecast to 2035

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ELECTRIC PROPULSION SYSTEM MARKET OVERVIEW

The global Electric Propulsion System Market is estimated to be valued at approximately USD 0.61 Billion in 2025, and is expected to grow to USD 0.75 Billion by 2026. The market is projected to reach USD 4.595 Billion by 2035, expanding at a CAGR of 22.2% from 2025 to 2035.

An Electric Propulsion System (EPS) is defined as a propulsion method that employs electric power to drive a vehicle, ship or a satellite. They remain instrumental in the shift towards increased levels of efficiency and sustainability at sea, air, and road.

KEY FINDINGS

GLOBAL CRISES IMPACTING ELECTRIC PROPULSION SYSTEM MARKET

Electric Propulsion System Industry Had a Negative Effect Due to Supply Chain Disruptions during COVID-19 Pandemic

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

The outbreak of the COVID-19 pandemic affected all sectors in the global supply chain, including battery, electric motors, and semiconductor production – key components for electric propulsion systems. This, in turn, impacted on the manufacturing companies’ performances in terms of achieving their production goals. Pandemic measures such as lock down and restriction on movement of goods and raw materials also limited the manufacturing and delivery time of products.

LATEST TRENDS

Integration with Renewable Energy Sources to Drive Market Growth

One of the key trends is the growth of batteries’ performance – capacity and power density. It is found that the development of lithium-ion technology is ongoing and other technologies such as solid-state batteries and lithium-sulfur batteries are being developed for their potential in delivering higher energy density, faster charge rates, and safer solutions. The use of EPS with renewables like solar and wind is gradually finding its way into the market especially the marine and automotive industries. Electric vehicle charging from Solar Energy Stations and the utilization of renewable energy in moving electric ships are increasingly being experienced.

• According to the European Space Agency (ESA), over 60% of new satellite launches in 2024 utilized electric propulsion for improved thrust efficiency and fuel savings.

• NASA’s propulsion technology program reported that electric propulsion has reduced satellite operational costs by 35%, enabling longer mission durations and lower maintenance needs.

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ELECTRIC PROPULSION SYSTEM MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into Gridded Ion Engine (GIE), Hall Effect Thruster (HET), High Efficiency Multistage Plasma Thruster (HEMPT), Pulsed Plasma Thruster (PPT) and Other.

• Gridded Ion Engine (GIE)- Gridded ion engines are a type of electric propulsion in which a propellant, usually xenon, is first ionized and then accelerated by a series of electrostatic grids towards the generation of thrust. The ions are shot out with considerable speed and electrons are introduced to minimize the formation of the exhaust plume.
• Hall Effect Thruster (HET)- Hall Effect Thrusters are basically utilizing a magnetic field to confine electrons which combine a propellant which in most cases is xenon. The ions are accelerated away by an electric field, and their propellant neutralized as it exits the thruster to generate the thrust.
• High Efficiency Multistage Plasma Thruster (HEMPT)- Specifically, the HEMPT works on the mechanism that generates plasma or ionized gas and accelerate the same through a number of stages of magnetic field that is designed in a way that optimizes its efficiency with very low erosion on the engine parts.
• Pulsed Plasma Thruster (PPT)- Pulsed plasma thrusters operate according to the capability to store electric charge in a capacitor and discharge it in steps. The electrical discharge gasifies or vaporizes a solid or gaseous propellant, typically Teflon and provides thrust through acceleration.

By Application

Based on application, the global market can be categorized into Nanosatellite and Microsatellite.

• Nano Satellite-  Electric systems are precisely effective in delivering long, low powered thrust which is required for any repositioning and stabilizing of the satellite over long cycles. This capability is of great significance for nano- and micro-satellites flying in the LEO or any other orbit that calls for great accuracy.
• Micro Satellite- Nano and microsatellites may need station-keeping that puts them into a particular orbit or formation for their mission requirements. Electrojet propulsion is an efficient low thrust drive which enables a spacecraft to fight gravity and aerodynamic forces in order to sustain an orbital position for an agreeable time.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.                  

Driving Factors

Environmental Regulations and Emissions Reduction to Boost the Market

A factor in the Electric Propulsion System market growth is theEnvironmental Regulations and Emissions Reduction. The transport and shipping markets around the world are facing higher emission standards set by governments and regulatory authorities. Electric propulsion systems currently in use, also generate minimal emissions and are being adopted as a way of firstly, cutting a company’s carbon dioxide emissions, secondly, to meet the firm’s environmental initiatives goals, environmental compliance regulations such as, IMO s 2020 sulfur cap and also the automotive emission standards.

• As per the U.S. Department of Energy, the global transition toward sustainable space missions increased demand for electric propulsion systems by 42% in the past three years.

• The International Energy Agency (IEA) stated that electric propulsion technologies offer 50% higher efficiency compared to traditional chemical propulsion, driving rapid adoption in commercial spacecraft.

Growth in Electric Vehicles (EVs) to Expand the Market

Currently, the automotive industry is facing a transition from conventional vehicle models, where new technologies of creating vehicles with the help of electricity, innovations in battery production, and spurred by the demand for environmentally friendly vehicles and stimulus by the government. Rising demand for electric passenger cars and transportation vehicles are key demands that are pushing development and adoption of electric propulsion systems with the majority of regular car manufacturing companies shifting focus to manufacture electric cars. Within the aerospace industry, electric mobility in terms of electric drones and upcoming electric VTOL for urban air transportation e.g. eVTOL is creating demand for electric propulsion.

Restraining Factor

High Initial Costs to Potentially Impede Market Growth

Electric propulsion systems, especially systems that utilize ion thrusters, Hall effect thrusters, Solid-State Batteries are costly to design and fabricate. Material, component and complex geometry associated with these kinds of systems make them more costly than conventional propulsion techniques. The initial investment cost of setting up the charging infrastructure for electric cars or the electricity supply networks for electric ships or electric planes, essentially bring major costs of procedures needed to start using these systems on a big scale.

• According to the U.S. Government Accountability Office (GAO), 28% of aerospace companies face limitations due to high initial development and testing costs for electric propulsion units.

• The European Commission noted that 21% of ongoing space projects are delayed because of limited infrastructure and skilled workforce in electric propulsion integration.

Advancements in Battery Technology To Create Opportunity for the Product in the Market

Opportunity

Developmental progress in Timelines, battery chemistry, and charging methods on lithium-ion, solid-state batteries and supercapacitors are improving the energy density of electric propulsion systems. These advances result in improved specifications such as increased ranges, increased power, or decreased charge times; factors which make electric propulsion more viable in numerous configurations. Over the past century, battery science has advanced significantly, and it becomes apparent that battery costs are reducing. Lower battery costs lower the cost of electric propulsion systems making them feasible in application in areas such as transport, aerospace and defense that have been hindered in the past due to costs.

• NASA reported that over 45 upcoming missions plan to integrate solar-electric propulsion, offering significant opportunities for deep-space exploration and satellite deployment.

• The Indian Space Research Organisation (ISRO) confirmed investment in developing 30% more efficient ion propulsion systems, presenting strong opportunities for regional industry growth.

Limited Energy Storage and Density Could Be a Potential Challenge for Consumers

Challenge

Beginning with electric propulsion of vehicles, ships and aerospace uses thereof are wholly dependent on batteries. Existing batteries like Lithium ion have certain drawbacks in energy density and it limits the range and power of electric propulsion systems to a much greater extent than the conventional fuel systems. Batteries needed for electric propulsion are many times bulky and heavy, this can be inconvenient in such areas of application as aviation or space exploration where weight matters most. On the strength and size and battery usage, design becomes complex due to different trade-offs that are associated with the battery.

• According to the U.S. Department of Defense, 25% of electric propulsion projects encounter issues with power management and energy density during long-duration missions.

• The European Space Policy Institute stated that 19% of global programs struggle with standardization challenges across propulsion component suppliers and testing agencies.

Electric Propulsion System Market Regional Insights

• North America

North America is the leading region in the electric propulsion system market, accounting for approximately 38% of the global share in 2024. The market growth is supported by strong government investments in satellite programs, space exploration missions, and high-power electric thrusters. Additionally, commercial satellite operators in the U.S. are increasingly adopting electric propulsion systems for both station-keeping and orbital maneuvers.

• Europe

Europe holds around 25% of the market share and is driven by advanced R&D initiatives from national space agencies and private companies. European manufacturers are actively developing Hall-effect thrusters and full electric propulsion systems for orbital satellites, with growing focus on low- and medium-power propulsion solutions for small and medium-sized spacecraft.

• Asia

Asia-Pacific is the fastest-growing market region, driven by rapid expansion in China, India, and Japan’s space programs. The region is expected to grow at a CAGR of approximately 13.2% between 2021 and 2033, with China projected to account for nearly 12% of the global market by 2025. Increasing investment in satellite constellations and space research is supporting the adoption of electric propulsion systems.

Key Industry Players

The electric propulsion system market is driven by a mix of established aerospace institutions and innovative commercial firms. The Aerospace Corporation, a U.S.-based R&D center, supports advanced thruster testing and system integration, providing critical infrastructure for propulsion development. Italy’s SITAEL S.p.A. produces a range of thrusters, from low-power Hall-effect to high-power magneto-plasma-dynamic systems, and has scaled industrial production with its Smart Space Factory.

• Aerospace Corporation: According to the U.S. Air Force Research Laboratory, Aerospace Corporation has supported over 70 electric propulsion missions with advanced in-space testing and engineering validation.

• SITAEL: As per the Italian Space Agency (ASI), SITAEL developed more than 120 Hall-effect thrusters used in European commercial satellites to enhance mission endurance and cost efficiency.

Bellatrix Aerospace in India focuses on Hall-effect and green mono-propellant propulsion for microsatellites, targeting emerging markets and on-orbit servicing. U.S.-based Busek Co. Inc. has a proven flight heritage in Hall and electrospray thrusters for commercial and government satellites, while Accion Systems Inc. specializes in miniaturized propulsion for small satellites and rideshare constellations.

Together, these companies cover applications from GEO/MEO satellite propulsion and deep-space missions to small satellite constellations. Market growth is driven by advances in specific impulse, power efficiency, system integration, and scalable manufacturing capabilities.

Top Electric Propulsion System Market Companies

• Aerospace Corporation

• SITAEL S.p.A.

• Bellatrix Aerospace

• Busek Co. Inc.

• Accion Systems Inc.

Industry Developments

The electric propulsion system market is advancing through industrial-scale production, product innovation, and strategic collaborations. Companies are expanding manufacturing capabilities with clean-room assembly lines, thermal-vacuum chambers, and serial production to meet growing demand. Innovations include Hall-effect thrusters for small satellites, air-breathing electric propulsion for low Earth orbit, and magneto-plasma-dynamic drives for deep-space missions, improving efficiency and reducing power consumption.

Strategic partnerships, joint ventures, and mergers are accelerating adoption, supporting applications such as satellite debris removal, on-orbit servicing, and constellation deployment, while enabling supply chain integration and cost reduction. The market is also moving toward end-to-end platforms that combine thruster production, power supply, system integration, and testing, enhancing operational efficiency and positioning companies for broader use across satellite, defense, marine, and aerospace sectors.

Report Coverage

The report provides a detailed analysis of the electric propulsion system market, covering market size, forecasted growth, regional segmentation, application and component breakdowns, competitive landscape, key players, and recent developments. It offers actionable insights for decision-makers, technology providers, satellite manufacturers, and investors, highlighting growth drivers, competitive positioning, and strategic opportunities in this evolving market.