The Trend in Electric Vehicle Components
An electric car is powered by an electric motor rather than standard petrol or diesel engine. Lithium batteries power the motor, which can be loaded at home or an EV charging station. These cars are powered by a variety of technologies, including battery electric vehicles (BEV), plug-in hybrid electric vehicles (PHEV), and range extender (hybrid) electric vehicles (HEV).
The electric vehicle component market was worth $22.2 billion in 2018 and is expected to grow to $157.4 billion by 2025, at a CAGR of 29.4%. This expansion might be attributed to the increasing global usage of electric cars (EVs).
During 2019–2025, the Rest of the World will most likely enjoy the fastest growth in the electric vehicle component business, with a CAGR of more than 40.0 percent. Because the area is still in the early stages of EV adoption, it accounted for less than 2.5% of market revenue in 2018. However, EV penetration is increasing rapidly here, particularly in Mexico and Brazil, driving demand for their different components.
The EV Component Market Trend
The preference of EV manufacturers for induction motors over synchronous motors has become a significant industry trend. For example, Tesla Inc., one of the major EV manufacturers, incorporates induction motors into several models. Another market growth factor is the increased government support for EV adoption. Several governments are implementing tax breaks, financial incentives, and purchase refunds to encourage clean transportation. For example, the United States federal government offers an Internal Revenue Service (IRS) tax credit ranging from $2,500 to $7,500, depending on the capacity of the EV and the size of its battery.
Automobile manufacturers are switching to induction motors because they are more efficient and help reduce magnetic losses by lowering the inverter voltage. As a result, the rising use of these engines in high-functioning EVs will fuel the expansion of the electric vehicle component market shortly.
Segment Analysis
Within the component area, the battery pack category maintained the biggest part of the market for electric vehicle components during 2018. This is because the battery pack contributes 35–50% of the total cost of an EV. Therefore, in 2018, the battery cell represented a substantial portion of the different sub-components of a battery pack.
In 2018, the original equipment manufacturer (OEM) category had the highest demand in the end-use segment. This can be attributed to the global increase in EV production. Also, the aftermarket sector will likely develop quicker in the coming years due to increased demand for spare parts and components.
The Current Trend and Development
In recent years, the key competitors in the worldwide electric vehicle component market have adopted many strategic initiatives to achieve a competitive edge in the sector, including product releases, consolidations, and facility expansions. For example, LG Chem partnered up with VinFast Trading and Production LLC in April 2019 to ramp up production of backup batteries for the Vietnamese start-electric up’s scooters and other planned electric vehicles.
Japan is a pioneer in using hybrid e-vehicles and hence contributes to the electric vehicle component industry. However, because of the slower adoption of e-vehicles in the Middle East, the market for electric vehicle components is likely to expand slowly. In Africa, several nations expect low-cost renewable fuels, driving demand for electricity-powered cars and opening up opportunities for the electric vehicle component industry.
