Internal Combustion Engine Market Size, Share, Growth, and Industry Analysis, By Type (Spark Ignition, Compression Ignition), By Application (Automobile Engine, Aircraft Engine, Locomotive Engine, Marine Engine, Other), and Regional Forecast to 2035

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INTERNAL COMBUSTION ENGINE MARKET OVERVIEW

The global internal combustion engine market size at USD 1.7 billion in 2025 and is projected to reach USD 1.74 billion in 2026, growing further to USD 2.18 billion by 2035 at an estimated CAGR of 2.54% from 2026 to 2035.

It provides the user with a lot of features that make this particular product service work efficiently and effectively. Fundamentally, The internal combustion engine is a type of heat engine that burns fuel in a combustion chamber to generate mechanical power. It operates on the premise that fuel's chemical energy can be converted into mechanical energy through burning. This factor has augmented the Internal Combustion Engine Market growth.

The anticipated rate of growth for this particular product service is due to quality level of assurance. Prosperity has been observed for this particular product market with amusing numbers. Cleaner alternative fuel engines, like hydrogen combustion engines, are predicted to become more and more popular as environmental pollution from emissions from traditional gasoline and diesel engines grows. The usage of hydrogen combustion engines in vehicles including trucks, buses, and cars is anticipated to increase as a result of governments throughout the world placing more emphasis on encouraging the use of hydrogen as an auto fuel through incentives and laws. This has ultimately outraged the sales and demand for this particular market growth and prosperity.

KEY FINDINGS

COVID-19 IMPACT

Market Growth Obstructed by Pandemic due to Lockdown

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.

This has affected the overall supply and demand chains of the particular market. As a result of the government's lockdown and other steps to stop the coronavirus from spreading, all supply activities were postponed, which decreased the amount of product related to semiconductor and electronics. Therefore, a small influence from COVID-19 is anticipated on the Internal Combustion Engine Market share.

LATEST TRENDS

Concerns About Hazardous Waste, Government Initiatives, And The Rise In Demand For Diesel Engines To Drive Market Growth

A latest trend has been witnessed to proliferate the market growth. This particular trend has been recorded to be the most profiting trends that have been upgraded to augment the overall market growth. One of the main factors propelling the growth of the internal combustion engine industry is the increase in government measures to reduce emissions. The market benefits when manufacturers increase their investments to comply with government regulations. Market expansion is accelerated by the growing use of diesel oxidation catalysts (DOC), which convert hydrocarbons and carbon monoxide (CO) into carbon dioxide (CO2) and water. This catalyst reduces particulate matter (PM) in the engine's exhaust stream by breaking down harmful waste.

• Global sales of internal combustion engine cars peaked around 2018 at nearly 75 million units annually, after which ICE car sales started declining while electric vehicle adoption increased by more than 20 % year-on-year.
• In Q1 2025, ICE vehicles accounted for 72.68 % of new car sales in Australia, with 206,810 units sold, while hybrids and EVs captured the remaining 27.32 %.

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INTERNAL COMBUSTION ENGINE MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into Spark Ignition, Compression Ignition.

• Spark Ignition:  It consists of spark ignition in which electric spark is used and which holds the major market share during forecast period.

• Compression Ignition: Tis segment holds the major market share during forecast period.

By Application

Based on application, the global market can be categorized into Automobile Engine, Aircraft Engine, Locomotive Engine, Marine Engine, Other.

• Automobile Engine: It is just an application where it is used by Automobile Engine.

• Aircraft Engine: It is nothing but an application where it is used by Aircraft Engine.

• Locomotive Engine: It is just an application where it is used by Locomotive Engine.

• Marine Engine: It is just an application where it is used by Marine Engine.

MARKET DYNAMICS

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

Driving Factors

Growing Interest in Fuel-Efficient Automobiles to Boost the Market

This is the major factor attributing the growth of this particular market. This factor is majorly involved in taking the revenue numbers above the skies and soaring greater heights and also the sales and demands have been proliferation and increased its value to greater extent. Governments throughout the world are enforcing stricter fuel economy regulations, which is driving higher demand for internal combustion engines. Advanced fuel injection systems, variable valve timing, and turbocharging are being used to improve these engines. This particular product has recorded to be profiting for the market growth. This particular factor has been proved to a boon for this particular product market. These factors are anticipated to drive the Internal Combustion Engine Market growth during the forecast period.

• Average real-world fuel economy for new U.S. vehicles reached 27.1 miles per gallon in 2023, reflecting an improvement of 4.2% compared to the previous year, while CO₂ emissions fell by 5.3%.
• India currently has about 40 automobiles per 1,000 people, compared to over 800 per 1,000 people in developed markets showing a potential increase of more than 1,900% as motorization expands.

Growing disposable wealth and widespread use in developing nations to Expand the Market

This is the second major factor attributing the growth of this particular  market and has resulted in the hike of revenue numbers so much so that they are touching the skies. Clients benefit from it. This particular product market has touched new levels of lucrative revenue numbers and has also recorded to be the boon for this particular product market growth. In the upcoming years, the global market for internal combustion engines is anticipated to be driven by rising consumer disposable income. For the foreseeable future, internal combustion engine pricing will stay low, which will boost demand. The demand for goods is anticipated to rise as more people own cars. Strong economic expansion in Asia and Latin America will also help internal combustion engines. Consumers like dependable, high-performing goods. In the upcoming years, this should increase the utilization of internal combustion engines. As internal combustion engine vehicle fuel economy regulations improve, product demand is also anticipated to rise. The market may also be increased by significant expenditures made by major companies in the upcoming years for the introduction of novel products and updated features. This factor has attributed the overall growth of this market and helped with the hike of revenue numbers as well. These factors are anticipated to drive the market growth in the present times and also during the forecast period.

Restraining Factor

Limited Storage and Distribution Infrastructure for Hydrogen to Impede Market Growth

These particular solutions have been very helpful yet extremely costly as well. This particular restraining factor has caused the revenue numbers to impede with extremely low yields and declining the sales and demand for this market. The lack of infrastructure for storing and distributing hydrogen is one of the main issues facing the global market for hydrogen combustion engines. Although there are several ways to create hydrogen, creating effective networks for distribution and storage is a significant challenge. Because of its low density, hydrogen is more challenging to transfer by pipeline or truck than fossil fuels. High-pressure cylinders or cryogenic tanks are needed for storing hydrogen, and both need significant financial investment. This raises the price of hydrogen as a fuel for cars considerably. Furthermore, it will need significant financial outlays over an extended period of time to establish a ubiquitous refueling infrastructure on par with current gasoline/diesel networks. Coordination of efforts to create a hydrogen economy has also been hampered by the absence of standardization in distribution and storage systems. Widespread use of hydrogen-powered automobiles and other applications would not become economically feasible unless creative and affordable ways to store and transport hydrogen over great distances are discovered. This particular factor is anticipated to restrain the market growth and drastically reduce the sales and demands of this particular product market. 

• Production of ICE vehicles in China has dropped by 37% since 2017, even though total automobile output in 2023 reached 30.1 million units.
• From 2035 onwards, 100% of new cars sold in the European Union will need to be zero-emission, eliminating ICE from new registrations.

Growing Cooperation among Research Institutions, Industries, and Governments To Create Opportunity for the Product in the Market

Opportunity

This particular opportunity has been attributing the market growth immensely. Growing cooperation between governments, businesses, and research institutes is one of the major prospects for the global market for hydrogen combustion engines. It is becoming more widely acknowledged that switching to hydrogen necessitates a collaborative strategy involving supply chain participants. Numerous nations have unveiled comprehensive hydrogen roadmaps and collaborative research initiatives to address cost, technological, and infrastructure barriers. Large oil and gas companies as well as automakers have started collaborating with startups to create better fuel cells and cryogenic tanks

• The Indian automobile industry, valued at over US $100 billion, contributes 7.1% to national GDP and 8% to total exports, offering a strong platform for ICE market penetration.
• In the U.S., cumulative plug-in electric car sales reached 1.4 million units by 2023, securing 9.1% of the new car market indicating an opportunity for ICE makers to innovate with hybrid models capturing the remaining 90.9%.

Transition to electric vehicles Could Be a Potential Challenge for Consumers

Challenge

This particular factor has been drastically challenging for the market growth and has become another major restraining factor. High initial investment costs to hamper the market growth. There has been a notable move away from conventional internal combustion engines as a result of rising environmental consciousness and developments in electric vehicle technology. The transition is being accelerated by governments around the world implementing measures to promote the use of electric vehicles, such as tax cuts, subsidies, and tighter pollution laws.

• In Australia, plug-in hybrid sales rose by 81% in Q1 2025, reaching 4.81% market share, while conventional hybrids climbed to 16.2%, reducing ICE’s dominance to under 73%.
• The global ICE market was valued at US $249.2 billion in 2024, with projections of US $372.2 billion by 2031 a growth of about 49.4% over seven years, slower compared to EV growth rates above 150% during the same period.

INTERNAL COMBUSTION ENGINE MARKET REGIONAL INSIGHTS

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• Asia-Pacific

The Asia-Pacific region has augmented a lot in the past few years in this particular product market. The Asia-Pacific Internal Combustion Engine Market has anticipated to augment immensely over the forecast period. Almost all of the worldwide revenue share came from Asia-Pacific. The region's expanding investments in hydrogen infrastructure, technological developments, and a growing focus on sustainable energy solutions are the main drivers of this expansion. Government programs and growing fuel prices that promote the use of hydrogen combustion technology are driving nations in the Asia-Pacific region to actively pursue hydrogen as a clean energy alternative.

• North America

The North America market for this particular market has been accounted for attributing the overall global shares for this particular product service market. The market for hydrogen combustion engines is also anticipated to increase significantly in North America. With the help of government initiatives to lower carbon emissions and encourage environmentally friendly transportation, the area has emerged as a leader in the research and development of cutting-edge hydrogen solutions.

• Asia

Asia-Pacific is anticipated to expand at the fastest rate during the projection period due to a rise in the demand for cutting-edge technologies. This particular region has experienced immense proliferation in the market shares and has attributed to the global market revenue.

KEY INDUSTRY PLAYERS

Leading Players adopt Acquisition Strategies to Stay Competitive

Several players in the market are using acquisition strategies to build their business portfolio and strengthen their market position. In addition, partnerships and collaborations are among the common strategies adopted by companies. Key market players are making R&D investments to bring advanced technologies and solutions to the market.

• Caterpillar: Known for heavy machinery and industrial ICEs, Caterpillar engines power more than 180 countries worldwide, with its machinery accounting for over 13 % of the global construction equipment market.
• Mitsubishi Heavy Industries: Mitsubishi Heavy Industries maintains a strong share in heavy-duty ICE manufacturing, with over 90,000 employees and a presence in more than 30 countries, contributing significantly to large-scale engine solutions.

List Of Top Internal Combustion Engine Companies

• Caterpillar (U.S.)
• Mitsubishi Heavy Industries (Japan)
• Cummins (China)
• Daimler AG (Germany)
• Deutz (Germany)
• Yanmar Company (Japan)
• Rolls-royce (U.K.)
• Hyundai (U.S.)
• Agcopower (China)
• Ashok Leyland (India)
• Shanghai Diesel (China)

KEY INDUSTRY DEVELOPMENT

March 2023: This particular company has attributed the market growth in terms of revenue and shares system. This particular development and investment the global market has been recorded to be a boon for the market growth. By the end of 2025, Rolls-Royce intends to have a high-speed internal combustion engine idea for ships ready.

REPORT COVERAGE

This research profiles a report with extensive studies that take into description the firms that exist in the analysis by inspecting the factors like segmentation, opportunities, industrial developments, trends, growth, size, share, and restraints. This analysis is subject to alteration if the key players and probable analysis of market dynamics change market affecting the forecasting period. With detailed studies done, it also offers a comprehensive.