Automotive Electronics Market

Automotive Electronics Market Outlook (2023 to 2033)

Global demand for automotive electronics stands at US$ 261.8 billion in 2023 and is predicted to reach a market value of US$ 580.5 billion by the end of 2033.

The global automotive electronics market is forecasted to exhibit expansion at a high-value CAGR of 8.2% from 2023 to 2033.

The use of electronics in vehicles has been increasing rapidly in recent years owing to the surging adoption of electrification trends in the automotive industry and the growing integration of advanced electronic systems. Increasing focus on safety and implementation of strict vehicle safety mandates by governments around the world are also slated to benefit shipments of automotive electronics in the future.

• In April 2021, three senators in the United States proposed legislation that was expected to mandate the use of driver monitoring systems (DMS) in all new vehicles within the coming six years and mandate it effectively by 2027.

Increasing digitization, growing sales of electric vehicles, rising investments in research and development of novel auto electrical parts, the substitution of mechanical components with electrical components, and growing per capita spending capacity are some other aspects that could promulgate sales of vehicle electronics across the forecast period.

• As per statistics provided by EVvolumes.com, around 10.5 million new BEVs (battery electric vehicles) and PHEVs (plug-in hybrid electric vehicles) were delivered in the year 2022, which was a 55% increase from the numbers recorded in 2021.

Surging automotive production and integration of advanced technologies such as artificial intelligence (AI), Internet of Things (IoT), etc., in vehicles are also predicted to bolster demand for automotive integrated electronics going forward. Vehicle electrical connectors, automotive power electronics, car audio electronics, and electrical diagnostic tools are expected to witness a notable hike in demand over the coming years.

On the flip side, the high costs of vehicles after the integration of advanced electrical systems in cars and the low adoption of auto electronics in low- and middle-income countries are projected to be major restraints for market growth over the next ten years. Moreover, the high maintenance and replacement costs associated with automotive electrical components are also expected to inhibit market development through 2033 and beyond.

Report Attributes	Details
Market Size in 2023	US$ 261.8 Billion
Projected Market Value (2033F)	US$ 580.5 Billion
Global Market Growth Rate (2023 to 2033)	8.2% CAGR
Market Share of Current Carrying Devices (2022)	40%
Sales Growth of Sensors (2023 to 2033)	9.5% CAGR
Market Share of Asia Pacific (2022)	>40%
Key Companies Profiled	Altera (Intel Corporation) Continental AG Hella Gmbh & Co. Kgaa (Hella) Infineon Technologies AG Microchip Technology Inc. DENSO CORPORATION Panasonic Corporation Broadcom Ltd. Robert Bosch GmbH NXP Semiconductors N.V. Valeo Inc. Hitachi Automotive Systems Ltd. Visteon Corporation Xilinx Inc. Texas Instruments Incorporated ZF Friedrichshafen AG

Which Trend Will Open Up New Frontiers for Start-ups in This Space?

“Vehicle Electrification – A Godsend for New Companies”

Incoming automotive electronics manufacturers are expected to benefit tremendously from the vehicle electrification trend that has been gaining popularity in recent years. New automotive electronics suppliers are also expected to capitalize on expanding sales of electric vehicles (EVs) and hybrid vehicles around the world.

• CAPSolar, a start-up based in Canada, is developing solar modules for light electric vehicles that are highly efficient and flexible. The company aims to solve the issue of short-range and parasitic battery drain issues of the current light electric vehicles (LEVs) that are hampering the adoption of electric vehicles with its add-on solar modules. CAPSolar’s automotive electronics solutions are sustainable and effective in improving battery life.
• EPowerlabs, a new company from Spain founded in 2019, is providing product development and engineering services for e-mobility powertrains through its proprietary DeveLinkSTUDIO technology and modular control platform for battery management systems and other car electronics. The technology allows the reduction of cost and time required to develop electronic modules for automotive applications.

New auto electronics providers can also focus on advancements in semiconductor technology to create innovative products that can be used as automotive electronic components.

• Berxel, a company based in China and founded in 2018, is focusing on developing advanced semiconductor chips for optoelectronic devices that can be used in vehicles, IoT devices, etc. The organization uses a VCSEL optical chip technology to shorten the epitaxial growth time and improve the existing Bragg reflector (DBR) structure of chips.

More new developments by start-ups and how they augment product standards, safety regulations, local supply, and pricing trends have been explained in this latest automotive electronics market research analysis by skilled analysts at Fact.MR, a market research and competitive intelligence provider.

Country-wise Insights

Why Should Automotive Electronics Suppliers Target Japan?

“Presence of Leading Electronics & Automotive Manufacturing Companies”

Japan is home to some of the most prominent electronics and automotive manufacturing companies in the world and the growing adoption of advanced technologies in the country is slated to create moneymaking opportunities for automotive electronics companies in the future. Surging automotive manufacturing activity and the growing popularity of electric vehicles in the country are projected to open up new windows of opportunity through 2033.

The market in the country is expected to be governed by local companies but is also expected to provide lucrative growth scope for international automotive electronics vendors if they offer novel and innovative electrical components for vehicles. Increasing disposable income and changing consumer preferences are also expected to favor market growth as they are encouraging sales of new vehicles.

• As per the Japan Light Motor Vehicle and Motorcycle Association and Japan Automobile Dealers Association (JADA), new vehicle sales in Japan in March 2023 amounted to 572,494 units, which was an 11.6% Y-o-Y increase.

Why are European Countries Irresistible Markets for Automotive Electronics Companies?

“Robust Automotive Manufacturing Activity and Surging Luxury Car Sales”

Europe has a robust automotive manufacturing industry owing to the presence of key automotive companies such as Audi, BMW, Volkswagen, etc. Surging demand for luxury vehicles owing to the increasing number of high net-worth individuals in European countries such as Germany is also forecasted to create moneymaking business opportunities for automotive electronics manufacturers in the European region through 2033.

Rising focus on sustainability in European countries, implementation of strict road safety norms, and growing sales of EVs in the European region are other prospects that could potentially boost demand for electrical systems in cars and other vehicles. The war between Ukraine and Russia has harmed automotive electronics sales in 2022 in the European region due to disruptions in trade and supply of raw materials.

How Will Sales of Automotive Electronics Fare in the United States?

“Automotive Electronics Providers Earmark Growing Autonomous Vehicle Fleet”

Autonomous vehicles are no longer a topic of science fiction and have become a reality with the integration of advanced technologies and advancements in the automotive industry. Increasing investments in research and development of new autonomous vehicles and supportive government initiatives to promote the same are projected to boost demand for automotive electronic components in the United States.

Surging popularity and adoption of Level 2 and Level 3 autonomous vehicles in the country is expected to set the stage for Level 4 and Level 5 autonomous cars in the future, which could boost sales of automotive electrical connectors, automotive capacitors, automotive resistors, and other auto electronic parts through 2033. The growing availability of driverless taxis and expanding autonomous vehicle fleets in the United States are also projected to supplement market growth going forward.

• In June 2022, Cruise, a self-driving car company was approved to launch its driverless ride-hailing service for passengers by the California Public Utilities Commission. The company was expected to start its services with a fleet of 30 cars and was instructed to run its services in less congested parts of San Francisco, California, United States in the timeframe of 10 p.m. to 6 a.m.

Category-wise Insights

Sales of Which Component Have a Bright Outlook?

“Current Carrying Devices Account for Lion’s Share of Market”

Based on component, the automotive electronics market is segmented into electronic control units, sensors, current carrying devices, and others.

Current carrying devices are products such as wiring harnesses, fuses, connectors, relays, and electronic switches. These products are used abundantly in automotive manufacturing and are projected to gain more prominence in the future as the electrification of vehicles picks up pace through 2033. The high costs of the aforementioned devices and their growing use in several automotive applications contribute to the significant share of this segment.

• Current carrying devices held 40% share of the global automotive electronics industry in 2022.

Sensors are also projected to witness robust demand over the next ten years owing to the increasing use of advanced technologies in automotive cabins and the installation of advanced auto infotainment systems. Growing use of sensors in lane departure warning systems, driver alert systems, advanced driver assistance systems (ADAS), tire pressure monitoring systems, etc., is also expected to boost their sales going forward.

• Shipments of sensors are anticipated to soar high at a CAGR of 9.5% from 2023 to 2033.

Competitive Landscape

Top-tier automotive electronics companies are focusing on utilizing advanced technologies to create innovative electronic solutions for vehicles. Companies are also expected to adopt strategies such as mergers, partnerships, collaborations, and acquisitions to hasten the development and launch of advanced automotive solutions.

• In March 2023, Texas Instruments, a renowned semiconductor manufacturing company, announced a collaboration with a human insight AI organization called Smart Eye. The collaboration was aimed at working together to provide innovative interior sensing solutions for automakers to enhance driver safety and in-cabin experience.

Key Segments of Automotive Electronics Industry Research

• By Component :

  • Electronic Control Units
  • Sensors
  • Current Carrying Devices
  • Others

• By Application :

  • ADAS
  • Infotainment
  • Body Electronics
  • Safety Systems
  • Powertrain Electronics

• By Sales Channel :

  • OEMs
  • Aftermarket

• By Region :

  • North America
  • Latin America
  • Europe
  • APAC
  • MEA