Electric Vehicle Component Market Assessment, By Vehicle Type [Battery Electric Vehicle, Hybrid Electric Vehicle, Plug-In Hybrid Electric Vehicle, Fuel Cell Electric Vehicle], By Component Type [Traction Battery Pack, Power Inverter, Controller, Others],

Electric Vehicle Component Market Assessment, By Vehicle Type [Battery Electric Vehicle, Hybrid Electric Vehicle, Plug-In Hybrid Electric Vehicle, Fuel Cell Electric Vehicle], By Component Type [Traction Battery Pack, Power Inverter, Controller, Others], By Distribution Channel [Original Equipment Manufacturer, Aftermarket], By Region, Opportunities and Forecast, 2017-2031F

Global electric vehicle components market is estimated to witness a CAGR of 22.09% during the forecast period 2024-2031, growing from USD 154.90 billion in 2023 to USD 764.70 billion in 2031. The market has experienced growth in recent years and is estimated to maintain a strong pace of expansion in the coming years due to an increase in the production of electric vehicles, advancement in the electric vehicle charging platform, rising awareness concerning zero carbon emission, and surging investment by government to increase number of a charging station. The rising sales of electric vehicles and advancement in the fast-charging infrastructure of electric cars is driving the global electric vehicle components market demand to a larger extent in the forecast period. The country’s economic growth, propelled by a growing market share in electric vehicle charging components, is highly owing to the increasing prevalence of electric vehicles. The trend is fostered by their cost-effectiveness and environmental advantages, including reduced noise pollution, and zero emissions. The electric vehicle components market growth has witnessed a significant rise in the forecast period.

In addition, government funding from different regions for new technology advancement and increased research into components foster the global electric vehicle components market size. Furthermore, initiatives to enhance infrastructure by building new, technologically advanced, and more efficient charging stations support the expansion of the EV charging component market in the forecast period. Automakers in the automotive industry are projected to source components from other countries to address the rising demand for electric vehicles.

For instance, in November 2023, Tesla, Inc. announced to double its imports of components worth USD 1.9 billion from India. The increase in demand for EVs will help foster the growth of components according to the Commerce and Industry Minister of India.

Increase in Investment and Production of Electric Vehicles to Foster Market Demand

The production of electric vehicles is rising due to the significant benefits of electric vehicles and the growing demand from customers for EVs. Different benefits including increased environmental protection and controlled pollution owing to less carbon emission from electric vehicles propel the global market growth in the forecast period. Also, a rise in different research and development activities with different new components and technologies launched in the market, owing to accelerated requirements from the consumer has aided to surge in the global electric vehicle component market demand. Moreover, the increasing investment in the development of EV charging infrastructure with a growing number of charging platforms has supported the growth rate of electric vehicle charging components in the forecast period. Governments of emerging countries are planning to invest in the component segment for electric vehicles to create opportunities for the local manufacturing ecosystem.

For instance, in April 2024, the Investment Information and Credit Rating Agency forecasted an increase in investment in India’s auto component sector, especially for EV parts. Over the next 3-4 years the investment of USD 3 billion are expected to allow advancements in localization, enhance EV production, and address manufacturing challenges.

Establishment of Manufacturing Facilities for EV Batteries Propel the Market Growth

In the electric vehicle market, there are different innovations and advancements in lithium-ion batteries functioned by the market players to expand their product range and footprint. Companies are offering a wide range of batteries for EVs that are specifically dedicated to the development of advanced electric buses and passenger cars. Also, key participants are majorly focused on different innovations and research and development into electric vehicle components including EV batteries. Moreover, the growing interest of consumers in electric vehicles has created a number of opportunities for dominating the global electric vehicle components market share. From start-up entrepreneurs compelled by government initiatives to giant companies investing a heavy amount in establishing a manufacturing facility for the production of batteries to expand their business across the globe.

For instance, in March 2022, Panasonic Corporation announced to establish a production facility at Wakayama Factory across western Japan to produce innovative ‘4680’ lithium batteries for electric vehicles. The setup is majorly focused on contributing to the rapid adoption of EVs globally and expanding its business across the globe.

Government Investments, Incentives, and Regulations Propel the Global Market Growth

Government policies significantly propel the growth of the electric vehicle market. Different countries are enacting regulations focused on decreasing carbon emissions and motivating the usage and adoption of electric vehicles which further fosters the global electric vehicle components market demand. Financial investments and incentives comprising rebates, tax credits, and exemptions, are compelled to make EVs more fascinating to purchasers. In addition, mandates that compel vehicle manufacturers to manufacture a precise quantity and quality of electric vehicles propel the advancement and increase of demand for electric vehicle components. Furthermore, governments of different countries are significantly investing in electric mobility projects, introducing opportunities for electric vehicle component manufacturers. By providing incentives to consumers and automakers to adopt and produce electric vehicles respectively, governments are propelling the shift. Thereby, the growing requirement for electric vehicles is projected to drive the sales of components including batteries, motors, power inverters, and others.

For instance, in November 2022, the U.S. Energy Department announced a preliminary approval for approximately USD 710 million in loans to electric vehicle technology manufacturing ventures. SK Siltron CSS, a South Korea-based company, is projected to receive USD 544 million to expand a plant across Bay City, Michigan to produce high-power silicon carbide wafers integrated in EVs.

Traction Battery Pack Dominates the Largest Global Electric Vehicle Components Market Share

Traction battery pack dominate the market growth due to the increase in requirement and production of electric vehicles. A traction battery pack is an essential component in an electric vehicle as it is an electrical energy storage system in the form of direct-current electricity and is used to drive the motor. Therefore, an increase in demand for electric vehicles is projected to foster the demand for traction battery pack segment growth. In the global market for electric vehicle components, there is a range of electric car batteries whereas lithium-ion batteries are most widely used in EVs. Key participants in the market are significantly planning to invest in batteries of electric vehicles to offer better driving experience and vehicle safety.

For instance, in January 2024, Altmin Private Ltd. announced an investment of USD 100 million in lithium-ion batteries in India over the next five years to represent a noteworthy advancement in the value chain for electric vehicles in India.

Asia-Pacific Registers the Largest Global Electric Vehicle Components Market Size

Asia-Pacific registers the largest market size in the global market due to emerging countries witnessing increased technological developments, rising integration of components in electric vehicles, surge in manufacturing and production of electric vehicles, and growing customer requirements concerning electric vehicles. In addition, the government of different countries in Asia-Pacific is increasing their funding in different research and development activities with technological advancement in components coupled with increased infrastructure development, which is projected to market expansion to a greater extent in the forecast period. Furthermore, it is projected that China will be a leading player in the global electric vehicle market as there is a significant increase in demand for passenger cars and economic development. Also, companies in the region have been planning to invest to decrease carbon emissions and encourage the adoption of electric vehicle components.

For instance, in May 2024, Mitsubishi Electric Corporation announced a joint venture with Japanese components and systems producer, Aisin Corporation, for electric and hybrid vehicle components and aims to use the scale as an advantage in an increasingly competitive market.

Future Market Scenario (2024 – 2031F)

Increase in production of electric vehicles, and government policies including FAME and FAME II policies, is expected to propel the global electric vehicle components market growth.

Governments of emerging nations are offering monetary incentives for the advancement of innovative technologies coupled with investment in different research and development activities, accelerating the global electric vehicle components market demand.

Collaboration between companies to introduce new and advanced electrical components, boosting the market growth in the forecast period.

Establishment of new manufacturing facilities in emerging countries propel the production and sales of electric vehicle components.

Key Players Landscape and Outlook

Key participants in the electric vehicle components are significantly investing in different research and development activities to expand their portfolio and develop hybrid and electric vehicles. The automakers in emerging countries are taking and investing in advancement practices to offer cost-effective cars. In addition, companies are efficiently adopting different market growth strategies including new product launches, partnerships, collaborations, mergers and acquisitions, and others to expand product portfolios, and gain a competitive edge.

In May 2022, Mahindra & Mahindra Limited announced to strengthen its electric vehicle portfolio and explore partnerships for sourcing more components from other companies.