The vehicle electrification market is driven by factors such as stringent emission and fuel efficiency regulations across the globe. Increasing demand for passenger cars across the globe is also boosting the market. With the growing electrification trend, the demand for vehicles with 48V architecture is set to grow in the near future. The vehicle electrification market is estimated to be USD 62.53 billion in 2017 and is projected to grow at a CAGR of 8.17% during the forecast period.
Decreasing Limits of Tail-Pipe Emissions & Raised Fuel Economy Bars to Drive the Vehicle Electrification Market to USD 92.6 Billion By 2022
According to the European Commission, CO2 emissions will be regulatory limited at 95 g/km as an average value throughout the vehicle fleet by 2020. Also, the Corporate Average Fuel Economy (CAFE) regulations have set standards for vehicle fleets average for fuel economy. Till 2016, CAFE average of 35.5 mpg was followed, which will now change to 54.5 mpg with effect from 2017. Vehicle weight reduction is one of the preferred methods to achieve these targets and electrification of the conventional mechanical components is one of the ways to achieve the vehicle light-weighting. For instance, electric power steering, which is lighter than the hydraulic power steering, can benefit in terms of 2-4% improved fuel efficiency.
Alternatively, with increase in electrified components, such as electric water pump, electric oil pump, and electric vacuum pump among others, there would be an increase in demand for high voltage architecture. Thus, further fueling the demand for vehicle electrification.
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Vehicle weight reduction is one of the preferred methods to achieve these stringent emission limits. Original equipment manufacturers (OEM) and Tier-1 suppliers are working on the development of components and systems that are lighter and more efficient in order to comply with these emission and fuel economy standards. As part of this light weighting trend, several mechanically operated systems and components are being converted to electrical.
Vehicle Electrification Market Dynamics
Drivers:
– Decreasing permissible limits in emission regulations & raised fuel economy bars
– Increasing demand for reliable electric systems in vehicles
– Rising need for 48V architecture
Restraints:
– High Cost of Electrical Systems
Opportunities:
– Electrification of commercial vehicles
– Flourishing automotive industry in Southeast Asia
Challenges:
– Inadequate charging infrastructure for electric vehicles
– Developing fail-safe electronic and electrical components
Electric vacuum pump is estimated to be the fastest growing segment in the vehicle electrification market, by product type. The growth of this segment is driven by the increased adoption of 48V mild-hybrid system. Asia-Oceania and North America are estimated to be the leading markets for the electric vacuum pump market. Stringent emission norms and increasing demand for a reliable electric system in these regions help to create new revenue pockets for the vehicle electrification market. Countries such as India and China, who are the leaders in global vehicle production, have plans to upgrade their regulations equivalent to Euro 6 by 2020. This would drive the demand for electric vacuum pump in these markets, as the technology has benefits over mechanical vacuum pump.
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