The Vehicle Electrification Market is projected to grow at a CAGR of 11.9% to reach USD 129.6 billion by 2025 from USD 73.7 billion.
Increasing vehicle demand across the globe, especially in emerging economies, is one of the main reasons that lead to a stable increase in crude oil demand. However, considering this increase in the global vehicle demand, controlling GHG emissions from vehicles has become a challenge. Hence, multiple regulatory authorities have introduced country/region-level emission regulations and fuel efficiency standards, and that lead to the introduction of vehicle electrification technologies like EPS, start-stop, liquid heater PTC, and integrated starter generator, among others.
OPPORTUNITY: Electrification of commercial vehicles
Globally, buses and trucks are used for public transportation and logistics purposes. In Europe and Asia Oceania, public transportation is used more than private transportation. While in North America, transportation is primarily through private vehicles. The demand for public transportation is triggered by the growing population in urban areas where the existing transportation infrastructure is proving to be insufficient. As each OEM is now focusing on reducing the global carbon footprint, they are promoting the use of electric vehicles. With the rising trend toward mobility on demand, taxis and passenger cars are focused more on greener technologies. Most of the efforts in the field of vehicle electrification are for passenger cars. There are very limited electrical systems and components for commercial vehicles that can replace conventional mechanical systems because of the higher loads. Developing electric powertrains for commercial vehicles is a costly affair as it involves a great amount of R&D. Governments from various countries are taking initiatives to increase the use of electric vehicles in their public transportation to reduce CO2 emissions by providing incentives and tax rebates on using e-trucks and e-buses. Some of the electric vehicle models are the Mercedes Benz electric truck, and BYD K9 and Tata Starbus Hybrid e-buses. As of now, there are a few commercial vehicle manufacturers that have introduced electric buses. However, the electric driveline for trucks and buses is still a challenge for system developers.
As with the wide-scale adoption of these vehicles, the demand for more reliable and better-performing systems would increase. This is where e-drive systems would help in vehicle weight reduction. This offers a good opportunity for manufacturers of electric components and electric drivelines to develop and launch products for the commercial vehicle segment.
The vehicle electrification market comprises major manufacturers such as Bosch (Germany), Continental (Germany), Denso (Japan), BorgWarner (US), and Mitsubishi Electric (Japan).
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With the increased use of electrical and electronics components, there is an increased demand for power supply. Investing and researching on 48V architecture is the preferred option by OEMs. This will not only help reduce vehicular CO2 and NOx emissions to permissible limits but will also improve fuel efficiency, which would help OEMs to meet fleet targets. A 48V architecture is a stepping stone toward bringing smarter vehicles that utilize the available energy. 48V system consists of a 48V Li-ion battery, DC/DC converter, and an integrated starter generator (ISG). Without replacing the present 12V architecture completely, 48V architecture works parallel with the combustion engine and a regular 12V battery. This parallel combination helps boost the efficiency of electric parts like electrical oil, coolant, and vacuum pump. In this dual 12/48 architecture, the 48V architecture will handle the power requirement of the start/stop system, regenerative braking, air conditioning compressor, and active chassis system, whereas the 12V system will handle the power requirement of conventional accessories such as lighting system, ignition system, audio system, and entertainment.
Electric power steering (EPS) is expected to be the largest vehicle electrification market. EPS reduces fuel consumption and improves the manoeuvrability of vehicles. In Europe and North America, almost all the vehicle has EPS, and in Asia Oceania, the trend is growing rapidly. In Asia Oceania, the installation rate of EPS is almost 90%. Hence, the EPS segment is estimated to hold the largest market share during the forecast period.
According to MarketsandMarkets analysis, Europe is estimated to have a 45.5% share of the total 48V vehicle market in 2019. Developed infrastructure such as charging stations, limited range of present-day BEVs, and high cost of HEVs and PHEVs are the few reasons why 48V vehicles are preferred over hybrid vehicles in Europe. This trend is estimated to continue for the next 10 years. The 48V system consists of a 48V Li-ion battery, DC/DC converter, and an integrated starter generator (ISG). Without replacing the present 12V architecture completely, 48V architecture can work parallelly with the combustion engine and regular 12V battery. This parallel combination helps boost the efficiency of electric parts like electrical oil, coolant, and vacuum pump. Considering the fact that emission norms in Europe are very strict, 48V vehicle is expected to hold a significant market in the near future.
The North American vehicle electrification market has a very positive outlook, owing to effective infrastructure and tax exemption, subsidies, and special facilities provided by governments of different countries in the region. The US is set to dominate the North American vehicle electrification market in 2019. As the country has the presence of major OEMs and Tier I players, adoption of electric components in ICE vehicles, BEVs, HEVs, and PHEVs is very high. As ICE vehicle has the largest share in vehicle production, it is expected to hold the largest market for vehicle electrification.
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This research report categorizes the given market based on Product, 48V, ICE, BEV, HEV, PHEV, Vehicle Type, and Region
Vehicle electrification market, by product type
1. Start/Stop System
2. Electric Power Steering (EPS)
3. Electric Air-Conditioner Compressor
4. Electric Vacuum Pump
5.Electric Oil Pump
6. Electric Water Pump
7. Liquid Heater PTC
8. Integrated Starter Generator (ISG)
9. Starter Motor
10. Alternator
11. Actuator
Vehicle electrification market, by the degree of hybridization
1. Internal Combustion Engine (ICE) & Micro-Hybrid Vehicle
2. Hybrid Electric Vehicle (HEV)
3.Plug-In Hybrid Electric Vehicle (PHEV)
4. Battery Electric Vehicle (BEV)
5. 48 V
48V mild-hybrid market
Vehicle electrification market, by region
1. Asia Oceania
1. Europe
3. North America
4. RoW
The North American vehicle electrification market has a very positive outlook, owing to effective infrastructure and tax exemption, subsidies, and special facilities provided by governments of different countries in the region. The US is set to dominate the North American vehicle electrification market in 2019. As the country has the presence of major OEMs and Tier I players, adoption of electric components in ICE vehicles, BEVs, HEVs, and PHEVs is very high. As ICE vehicle has the largest share in vehicle production, it is expected to hold the largest market for vehicle electrification.
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