Electric vehicles curb shaft demand; commercial vehicles buffer

Electric vehicles are reducing demand for conventional propeller shafts because their simplified drivetrains can require fewer traditional shaft systems. The immediate buffer is commercial vehicles: electric passenger-vehicle penetration reached 4.30% in FY26, compared with 1.87% for electric commercial vehicles, according to Vahan Dashboard data cited in the industry report.

How do electric vehicles curb conventional shaft demand?

Electric vehicles curb conventional propeller-shaft demand by changing the architecture that transfers torque from an engine and gearbox to an axle. A conventional propeller shaft is a rotating component that transmits torque, or turning force, between drivetrain components, notably in internal-combustion-engine vehicles with rear-wheel drive or four-wheel drive. The industry report says electric-vehicle drivetrains use simplified layouts that reduce the need for conventional propeller-shaft systems, particularly in passenger vehicles where electrification is more advanced.

The effect is visible in the market-growth comparison supplied by Maia Research and CareEdge Research. The global automobile propeller-shaft market is projected to expand at a 6.61% compound annual growth rate, or CAGR, from 2020 to 2025, before slowing to 5.62% from 2025 to 2030. That deceleration does not mean demand disappears: it reflects a mix shift as electric passenger vehicles expand and conventional drivetrain content becomes less necessary in some vehicle designs.

The impact also differs by shaft configuration. Single-piece shafts, used mainly in passenger cars, small commercial vehicles and short-wheelbase sport-utility vehicles, are suited to shorter distances between the gearbox and final drive. Multi-piece shafts use centre bearings and universal joints to manage deflection and vibration over longer wheelbases, making them relevant to trucks, buses, military vehicles and construction equipment. The persistence of these long-wheelbase applications limits how quickly electric vehicles can displace conventional shaft demand across the entire market.

Why do commercial vehicles buffer electric-vehicle risk to shafts?

Commercial vehicles buffer the risk because their electric-vehicle penetration remains below passenger-vehicle penetration and because many commercial applications require range, payload and vehicle uptime that currently constrain electrification. In FY26, electric commercial vehicles, defined in the cited Vahan Dashboard data as electric buses and electric goods carriers, represented 1.87% penetration. Electric passenger vehicles represented 4.30%, a gap of 2.43 percentage points.

The difference has widened since FY22. Electric passenger-vehicle penetration rose from 0.55% in FY22 to 4.30% in FY26, an increase of 3.75 percentage points. Electric commercial-vehicle penetration increased from 0.17% to 1.87% over the same period, an increase of 1.70 percentage points. Both categories are electrifying, but passenger vehicles have added penetration more than twice as quickly in percentage-point terms, leaving more conventional drivetrain exposure in commercial fleets.

The report identifies higher upfront cost, range and payload requirements, long operating hours and dependable charging access as the mechanisms slowing electric commercial-vehicle adoption. Medium and heavy commercial vehicles, or M&HCVs, have negligible electric penetration because long operating cycles, heavy payloads and limited charging infrastructure remain material constraints. Urban buses, rail-mobility vehicles and light commercial vehicles are more suited to electrification, so the buffer depends in part on whether adoption broadens beyond those use cases.

How concentrated is propeller-shaft demand in vehicle applications?

Propeller-shaft demand is concentrated in automotive uses and in rear-shaft configurations, making passenger-vehicle electrification significant but not the sole determinant of market volume. In the global end-user split for 2025, automobiles accounted for 73% of propeller-shaft applications. Passenger vehicles represented 35%, light commercial vehicles 17%, heavy commercial vehicles 14% and off-road vehicles 7%, showing that commercial and off-road categories together comprised 38% of total demand.

India displays a similar 2025 application mix, but with a greater commercial-vehicle contribution. Passenger vehicles accounted for 33% of Indian propeller-shaft demand, while light commercial vehicles represented 18% and heavy commercial vehicles 17%. Therefore, commercial vehicles accounted for 35% of the Indian market, two percentage points more than passenger vehicles. Railways and shipping each accounted for 5%, mining 5%, real estate 3%, defence 3% and other applications 6%, creating non-passenger sources of demand.

Rear propeller shafts add another layer of concentration. They account for more than 75% of the global market because conventional rear-wheel-drive, or RWD, and four-wheel-drive, or 4WD, vehicles use them to transmit torque to the rear axle. In India, rear shafts account for more than 90% of the market, compared with front and inter-axle shafts. This dependency means demand remains tied to production and replacement needs in RWD and 4WD commercial vehicles, sport-utility vehicles and heavy-duty equipment.

What must hold for the commercial-vehicle buffer to persist?

The commercial-vehicle buffer will persist if heavy-duty electrification remains constrained and conventional RWD and 4WD vehicle output stays supported by freight, construction and replacement demand. Indian commercial-vehicle domestic sales rose 12.6% year on year in FY26, after a two-year correction following the high base created during FY22 and FY23. The report attributes FY26 growth to infrastructure activity, a normal-monsoon forecast, interest-rate cuts affecting financing and bus-fleet replacement linked to ageing vehicles.

A broader industrial base also matters because propeller shafts serve sectors beyond road vehicles. The 2025 global application distribution assigned 6% to railways, 5% to defence, 4% to mining, 3% to shipping and 3% to real estate. Rail freight expansion, procurement of locomotives and rolling stock, defence-vehicle procurement, mining activity and construction equipment can support torque-transmission demand even when passenger-vehicle drivetrain designs change.

Policy can both reinforce and erode the buffer. India’s PM E-Drive Scheme for 2024 to 2026 has an allocation of Rs 10,900 crore to support electric two-wheelers, three-wheelers, buses and trucks, alongside charging infrastructure. The Production Linked Incentive scheme for automobiles and auto components also supports advanced automotive technology, including potential research and capital expenditure for lightweight shafts and electric-vehicle drivetrain components. These measures could accelerate commercial electrification, but they may also enable suppliers to develop shafts suited to all-wheel-drive electric vehicles and related applications.

Conclusion

Electric vehicles are a direct operational risk for conventional propeller shafts because passenger-vehicle electrification is advancing faster than commercial-vehicle electrification. The FY26 penetration gap of 4.30% for electric passenger vehicles versus 1.87% for electric commercial vehicles, combined with commercial and off-road applications representing 38% of global 2025 shaft demand, explains why the risk is uneven rather than immediate across the market.

The next measure to watch is whether electric commercial-vehicle adoption moves beyond urban buses, last-mile freight and lighter applications into M&HCV operations. The disclosed PM E-Drive plan runs through 2026, while the report identifies charging availability, payload, range, upfront cost and operating cycles as unresolved barriers; changes in those conditions will determine the durability of the commercial-vehicle buffer.