Automotive Power Electronics Market - Forecast(2024 - 2030)

Automotive Power Electronics Market Size is valued at $5.4 Billion by 2030, and is anticipated to grow at a CAGR of 4.2% during the forecast period 2024 -2030. The automotive power electronics market is experiencing significant growth, driven primarily by the increasing demand for electric vehicles (EVs). This surge is fueled by a global shift towards sustainable transportation and stringent emission regulations. The rapid technological advancements in semiconductor materials and power management solutions are enhancing the efficiency and performance of automotive power electronics, thereby accelerating market expansion. 

Additionally, consumer preferences are evolving towards vehicles that offer better energy efficiency, safety, and convenience, all of which are enabled by sophisticated power electronic systems. Manufacturers are investing heavily in research and development to innovate and stay competitive in this dynamic market. Furthermore, government incentives and subsidies for EVs are further propelling the adoption of automotive power electronics. This market trajectory is expected to continue its upward trend, as the integration of power electronics in vehicles becomes more prevalent, aligning with the broader goals of energy conservation and environmental sustainability.

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COVID-19/Russia-Ukraine War Impact

• The COVID-19 pandemic significantly disrupted the automotive power electronics market, initially causing production halts and supply chain disruptions. As factories shut down and demand for vehicles plummeted, manufacturers faced challenges in maintaining operations and meeting financial targets. However, the pandemic also accelerated the adoption of electric vehicles (EVs), driven by increased awareness of environmental issues and government incentives. This shift spurred innovations in power electronics, essential for EVs' efficiency and performance. Consequently, despite short-term setbacks, the industry experienced a renewed focus on developing advanced power electronics solutions, paving the way for long-term growth and resilience in a post-pandemic era.
• The Russo-Ukraine War has significantly impacted the automotive power electronics sector, primarily through disruptions in the supply chain and fluctuations in raw material prices. The conflict has caused instability in the region, affecting the production and transportation of essential components like semiconductors and rare earth metals, crucial for power electronics. This disruption has led to increased costs and delays, compelling manufacturers to seek alternative sources and adjust their supply chains. Additionally, the economic sanctions imposed on Russia have further strained international trade relations, exacerbating the challenges faced by the automotive industry. Consequently, companies are re-evaluating their strategies to mitigate risks and ensure resilience in their operations, focusing on diversifying suppliers and investing in local manufacturing capabilities to reduce dependency on geopolitically sensitive regions.

Automotive Power Electronics Market Report Coverage

The report “Automotive Power Electronics Market Forecast (2024 – 2030)”, by Industry ARC, covers an in-depth analysis of the following segments of the Automotive Power Electronics Market: By Component: Microcontroller Unit, Power Integrated Circuit, Sensors, Others By Vehicle Type: Passenger Cars, Commercial Vehicles By Electric Vehicle Type: Battery Electric Vehicles, Hybrid Electric Vehicles, Plug-In Hybrid Electric Vehicles By Application: Powertrain & Chassis, Body Electronics, Safety & Security, Infotainment & Telematics, Energy Management System, Battery Management System By Geography: North America (USA, Canada, and Mexico), South America (Brazil, Argentina, Colombia, Chile, and Rest of South America), Europe (UK, Germany, France, Italy, Netherlands, Spain, Russia, and Rest of Europe), Asia-Pacific (China, Japan, India, South Korea, Australia, Indonesia, Malaysia, and Rest of APAC), and Rest of the World (Middle East, and Africa)

Key Takeaways

• Asia-Pacific dominated the Automotive Power Electronics market with a share of around 50% in the year 2023.
• The automotive industry's need to meet stricter safety regulations and reduce emissions, coupled with rising consumer demand for electric vehicles, will propel the growth of the automotive power electronics market throughout the forecast period.
• Apart from this, thrust to equip vehicles with advanced power solutions is driving the growth of Automotive Power Electronics market during the forecast period 2024 – 2030.

Automotive Power Electronics Market Segment Analysis – By Vehicle Type

The demand for automotive power electronics in passenger cars is escalating due to government initiatives promoting the integration of advanced electronics. This surge is driven by policies aimed at enhancing vehicle efficiency, safety, and environmental performance. For instance, in March 2024, the European Union introduced new regulations mandating the inclusion of advanced driver-assistance systems (ADAS) in all new cars, significantly boosting the need for sophisticated power electronics. Similarly, the U.S. government has increased funding for electric vehicle (EV) infrastructure, encouraging automakers to incorporate more power-efficient electronic components. Additionally, China’s recent tax incentives for electric and hybrid vehicles, announced in January 2024, have accelerated the adoption of power electronics to improve performance and range. These initiatives are fostering innovation and production of cutting-edge electronic components, such as inverters and onboard chargers, essential for modern passenger cars. As a result, automotive manufacturers are increasingly investing in power electronics to comply with regulations, meet consumer expectations, and gain a competitive edge in the evolving market.

Automotive Power Electronics Market Segment Analysis – By Electric Vehicle Type

The demand for automotive power electronics in hybrid electric cars is rapidly increasing due to the global imperative to decarbonize the transport sector and reduce reliance on fossil fuels. Governments worldwide are implementing stringent regulations and incentives to promote the adoption of hybrid and electric vehicles. In January 2024, the European Union introduced enhanced subsidies for hybrid vehicle purchases, coupled with stricter emission standards, significantly boosting the market for power electronics. Similarly, the U.S. launched the "Clean Transport Initiative" in April 2023, providing substantial tax breaks and grants for hybrid car manufacturers to innovate and scale up production. Additionally, Japan’s latest energy policy, announced in February 2024, includes a comprehensive plan to phase out internal combustion engines, further propelling the demand for hybrid vehicles equipped with advanced power electronics. These components, such as power inverters, converters, and battery management systems, are essential for enhancing the efficiency and performance of hybrid electric cars. As a result, automotive companies are accelerating investments in power electronics technology to meet regulatory requirements, cater to consumer preferences, and contribute to a sustainable future.