Leakage of oil through breathers can be a serious concern in electric vehicle (EV) gearbox or transaxle units, especially due to the complexities presented by the small housing space and rotational components, which are running at relatively high speeds compared to conventional transmission units. Predicting the oil leakage from the transmission unit is another concern. Traditional methods are mostly centered on developing individual breather compartments, resulting in excess material usage, additional weight, and increased cost of manufacturing. To eliminate oil leakage through the air breather, the oil channelization technique used involves integrated oil deflection baffles, low-friction return channels, an oil accumulation cavity with cover, and strategically optimized airflow paths/vents. This design provides a number of benefits, such as increased gearbox reliability, minimized risk of component failure, and reduced maintenance needs, with all of these and a compact, cost-effective housing structure maintained. This paper presents a novel and compact way of oil channelization that has been created for the Electric vehicle powertrain housing and seeks to counter oil leakage, along with optimizing space, supported by simulation- based tools. In addition, the fluid simulation analysis was carried out and tested to develop a correlation with the real-life events. Using computational fluid dynamics (CFD) simulations and experimental validation with a prototyped transaxle housing, we demonstrate zero oil leakage in different running conditions with various grades and different speeds with varying oil quantity.