In 2018, the global electric vehicle component market
reached a value of $22.2 billion and is projected to attain $157.4 billion by
2025, advancing at a 29.4% CAGR during the forecast period (2019–2025). The
market is witnessing growth because of the rising adoption of electric vehicles
(EV) and declining cost of the components used in them. On the basis of
end-use, the market is bifurcated into original equipment manufacturers (OEM)
and aftermarket, among which, the larger demand for electric vehicle components
was created by the OEMs division in 2018.
When component is taken into consideration, the electric vehicle component market is categorized into battery pack, controller,
electric vehicle supply equipment, high-voltage cable, thermal management
system, motor, DC-DC converter, power distribution module, and vehicle
interface control module. The battery pack category is projected to account for
the major share of the market during the forecast period, as it the most
important part of the vehicles. Moreover, battery pack accounts for
approximately 35–50% of the total cost of electric vehicles, which is why this
component is the major revenue contributor to the market.
Among all the regions, namely Europe, Asia-Pacific (APAC),
North America, and Rest of the World, the largest share of the EV component market was held by the APAC region in 2018. This was due
to the increased usage of electric vehicles in the region, primarily in China.
Factors including rising government support for EVs in the form of subsidies,
increasing environmental concern, and growing ownership costs of internal
combustion engine-based vehicles are leading to the use of electric vehicles in
the region.
People are becoming more aware regarding the adverse effects
of vehicular emissions on the environment, which is why the adoption of EVs is
rising, further driving the electric vehicle component industry. At the
present time, approximately 43% of the total amount of greenhouse gases being
emitted in the world is contributed by the automobile sector. Hence, several
countries are taking initiatives to curb the emissions by reducing the use of
fuel-based vehicles. The increased usage of electric vehicles will result in
the reduction of the amount of carbon dioxide being emitted into the
environment.
Furthermore, the governments of different countries are
increasingly taking steps for supporting the adoption of electric vehicles. Tax
exemptions, financial incentives, and purchase rebates are some of the
supportive initiatives taken by governments, which are predicted to drive the electric
vehicle component market in the coming years. For example, the federal
government in the U.S. provides an Internal Revenue Service tax credit of
$2,500 to $7,500 per new EV purchased, where the tax credit amount depends on
the size of the vehicle and battery capacity.
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A key trend that is being observed in the electric
vehicle component market is the rising preference for induction motors over
synchronous motors. The reason for this is that the induction motors have
improved efficiency and aid in reducing the magnetic losses by decreasing the
inverter voltage. In addition to this, these motors need minimal maintenance because
of the absence of slip rings, brushes, and commutators, which is why their
popularity has increased in the recent years.
Thus, the market is growing due to the growing adoption of
electric vehicles, which is further taking place due to the rapid environmental
degradation and rising government support for the adoption of electric
vehicles.
