The global electric vehicle component market generated revenue of USD 22.2 billion in 2018, and it is expected be valued at USD 157.4 billion by 2025, exhibiting a CAGR of 29.4 per cent between 2019 and 2025. Based on component, the battery pack contributed the highest revenue in 2018.
The battery pack is the most important component in an electric vehicle and is responsible for the largest contribution among all the components to the vehicle cost. As a result of this, battery packs are responsible for generating the highest revenue in the electric vehicle component market.
Shift toward lithium–nickel–manganese–cobalt (NMC) oxide batteries from lithium–iron phosphate (LFP) batteries is a major trend in the market. A major trend being witnessed in the electric vehicle component market is the shift of electric vehicle manufacturers from lithium–iron phosphate (LFP) batteries toward lithium–nickel–manganese–cobalt (NMC) oxide batteries. In the past, most of the manufacturers, especially, the Chinese players, used LFP batteries in their electric vehicles. For instance, BYD Co. Ltd., a major electric vehicle manufacturer, still uses LFP batteries in its vehicles. LFP batteries come with higher safety features and a longer life cycle, which made them a favourable option. However, in the recent years, the usage of NMC batteries in electric vehicles has witnessed a drastic climb. The shift toward NMC batteries from LFP batteries is mostly because the former batteries offer a greater energy density, which enables a longer vehicle range. Moreover, these batteries are much lighter than LFP batteries as well as consume lesser space in the vehicle. Thus, with the growing demand for longer-range and lighter electric vehicles, manufacturers are shifting from LFP batteries to NMC batteries.
The growing adoption of electric vehicles across the world is contributing in the growth of the electric vehicle component market. In 2018, the total electric car fleet across the world surpassed 5.1 million, increasing by over 2 million from the previous year, and it is expected that by 2030, the total fleet size will exceed 130 million. Thus, with such massive growth expected for electric vehicle production and sales, the demand for their components is also forecast to increase. The battery pack generated the highest revenue in the electric vehicle component market in 2018 among all components. The battery pack is further comprised of a battery cell, battery management system (BMS), battery thermal management system, and other components, out of which the battery cell alone is responsible for generating around 70 per cent of the revenue for the battery pack.
OEMs were the highest revenue generator in 2018 in the electric vehicle component market. In the forecast period, the demand for components is expected to witness faster growth in the aftermarket, due to the increasing requirement for replacement. APAC is the largest electric vehicle component market. The government of different countries in the region are actively taking initiatives to propel the adoption of electric vehicles, which is further contributing to the growth of the components’ market. Also, in 2017, Government of India outlined a vision that aims to have an electric vehicle fleet by 2030. Further, the National Electric Mobility Mission Plan 2020 was launched in 2013 to promote electric and hybrid vehicles in India.
