[212 Pages Report] The vehicle electrification market in the pre-COVID-19 situation was projected to reach 735 million units by 2025 from 540 million units in 2020 (in terms of volume). The possibility of a second wave of COVID-19 may be a major blow to the automotive manufacturing industry. However, with lockdown relaxations in the US and China, enabling the resumption of production operations, the automotive ancillary industry is likely to resume operations by the end of 2020, thereby driving the vehicle electrification market.

The vehicle electrification market is projected to grow at a CAGR of 11.9% to reach USD 129.6 billion by 2025 from USD 73.7 billion. Owing to various benefits offered by electrification such as decreased vehicle weight, lower emissions, increased fuel efficiency, improved driving comfort, and safety among, vehicle electrification would be the preferred option for OEMs in the near future.

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COVID-19 IMPACT

The vehicle electrification market is expected to witness a significant downturn in 2020, largely attributed to a decline in vehicle production. The production of ICE vehicles remains largely disrupted due to the COVID-19 pandemic. The global production of vehicles, pre-COVID-19, was expected to reach from ~90-95 million units in 2020 and ~110-115 million units by 2025, with the Asia Oceania and North America regions being the major contributors in the passenger car segment and North America accounting for the largest share of LCV production.

The outbreak of the COVID-19 pandemic has caused a disruption in the export of automotive components as well as the closure of manufacturing and assembly plants across the world. Major players such as GM, Honda, Fiat, Volkswagen, PSA Group, General Motors, and BMW have suspended production. Considering these factors, the global vehicle production is expected to grow at a rate of 3.3% from 2020 to 2025.

Market Dynamics

DRIVER: Rising need for 48V architecture

The concept of 48 V architecture or mild hybrids is rapidly gaining traction around the globe, which is consequently expected to drive the demand for vehicle electrification in the near future. Full hybrid vehicles offer a better fuel economy as compared to mild hybrids. According to the International Council on Clean Transportation, full hybrid vehicles reduce fuel consumption by 30�35%. However, factors such as the higher cost and weight of vehicles are major challenges for full hybrid vehicle manufacturers. Mild hybrid systems with a 48 V battery are not as efficient as full hybrid systems but are cost-effective. Hence, OEMs prefer the mild hybrid concept. This involves the use of a conventional ICE engine and the addition of an electric motor with a power of up to 15 kW. The only addition to the cost is that of the electric motor, which is balanced by the removal of the starter motor and alternator from the conventional ICE engine.

RESTRAINT: Difficulty in achieving and maintaining an optimum power-to-weight ratio

The power-to-weight ratio is a calculation commonly applied to engines and power sources to enable the comparison of one vehicle to another. The power-to-weight ratio applies to the vehicle power in kW divided by the weight of the vehicle in kilograms. The lesser the weight of the vehicle, it is observed to have more power, better efficiency, and high range. Advanced, lightweight components and materials are required to achieve optimum power-to-weight ratio. OEMs and Tier I companies are working hard to improve the power-to-weight ratio by implementing lightweight materials and different advanced products such as e-CVT and e-axles, albeit still on a developmental stage.

OPPORTUNITY: Electrification of commercial vehicles

Globally, buses and trucks are used for public transportation and logistics purposes. In Europe and Asia Oceania, public transportation is used more than private transportation. While in North America, transportation is primarily through private vehicles. The demand for public transportation is triggered by the growing population in urban areas where the existing transportation infrastructure is proving to be insufficient. As each OEM is now focusing on reducing the global carbon footprint, they are promoting the use of electric vehicles. With the rising trend toward mobility on demand, taxis and passenger cars are focused more on greener technologies. Most of the efforts in the field of vehicle electrification are for passenger cars. There are very limited electrical systems and components for commercial vehicles that can replace conventional mechanical systems because of the higher loads. Developing electric powertrains for commercial vehicles is a costly affair as it involves a great amount of R&D. Governments from various countries are taking initiatives to increase the use of electric vehicles in their public transportation to reduce CO2 emissions by providing incentives and tax rebates on using e-trucks and e-buses. Some of the electric vehicle models are the Mercedes Benz electric truck, and BYD K9 and Tata Starbus Hybrid e-buses. As of now, there are a few commercial vehicle manufacturers that have introduced electric buses. However, the electric driveline for trucks and buses is still a challenge for system developers.

As with the wide-scale adoption of these vehicles, the demand for more reliable and better-performing systems would increase. This is where e-drive systems would help in vehicle weight reduction. This offers a good opportunity for manufacturers of electric components and electric drivelines to develop and launch products for the commercial vehicle segment.

CHALLENGE: Developing fail-safe electronic and electrical components

Electric vehicles signify the introduction of advanced technologies along with electric power components in vehicles. There are several risks associated with these technologies, such as thermal runaway of battery bank and fire, which need to be cautiously assessed. Numerous safety aspects need to be considered regarding vehicle electrification, including electric system safety, functional system safety, battery charging safety, and vehicle maintenance, operation, and training. The current challenges that hinder the popularity of electric vehicles are high battery cost, overheating, the total energy storage capacity of the battery, and the development of batteries for vehicles. Additionally, it is essential to examine the vehicle behavior as these systems often fail, making them inefficient when compared to ICE vehicles. Thus, automobile manufacturers need to ensure that customers use systems that operate efficiently in varied conditions to effectively promote the use of these electrical systems and their components.

Electric power steering is estimated to be the largest segment for the vehicle electrification market�

Electric power steering (EPS) is expected to be the largest vehicle electrification market. EPS reduces fuel consumption and improves the maneuverability of vehicles. In Europe and North America, almost all the vehicle has EPS, and in Asia Oceania, the trend is growing rapidly. In Asia Oceania, installation rate of EPS is almost 90%. Hence, the EPS segment is estimated to hold the largest market share during the forecast period.

�Plug-in hybrid electric vehicle (PHEV) is estimated to witness the fastest growth in the vehicle electrification market�

PHEV is the fastest growing segment in the vehicle electrification market. Automakers are seeing plug-in hybrids as a gateway to fully electric vehicles. Increasing charging infrastructure in China, the US, and European countries would be responsible for the shift from conventional ICE vehicles to PHEVs. OEMs of these regions are also investing significantly in vehicle electrification. This would also drive the demand for PHEVs.

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North America is expected to be the fastest growing market for vehicle electrification

North America is expected to be the fastest growing market for vehicle electrification. The growth in this region is propelled by growing charging infrastructure and significant investments by OEMs in the development of vehicle electrification. Federal tax credits and rebate incentives are accelerating the growth of vehicle electrification market, especially in the US. The US is set to dominate the North American vehicle electrification market, holding the highest market share in 2019. As the country has the presence of major OEMs and Tier I players, adoption of electric components in ICE vehicles, BEVs, HEVs, and PHEVs is very high. Hence, North America is expected to be the fastest growing market during the forecast period.

Key Market Players

The vehicle electrification market comprises major manufacturers such as Bosch (Germany), Continental (Germany), Denso (Japan), BorgWarner (US), and Mitsubishi Electric (Japan). These companies have strong distribution networks at a global level and offer an extensive product range. These companies adopt strategies such as new product developments, expansions, collaborations, and contracts & agreements to sustain their market position.

The study includes an in-depth competitive analysis of these key players in the vehicle electrification market, with their company profiles, SWOT analysis of the top 5 companies, recent developments, and key market strategies.

Bosch is anticipated to be a dominant player in the vehicle electrification market. Bosch adopted the strategies of expansion, new product development, partnership, and merger & acquisition to retain its leading position in the vehicle electrification market. Bosch has a presence in emerging markets such as India, China, and Brazil as well. Strengthening of the product portfolio and global presence by building customer relationships is the strategy that Bosch follows to maintain its leadership in the vehicle electrification market.

Scope of the Report

Report Metric Details Market size available for years 2017�2025 Base year considered 2019 Forecast period 2020�2025 Forecast units Volume (Million Units) & Value (USD Billion) Segments covered Product Type, 48V, Vehicle Type, Degree of Hybridization, Region Geographies covered North America, Asia Oceania, Europe, and Rest of the World Companies covered Bosch (Germany), Continental (Germany), Denso (Japan), BorgWarner (US), and Mitsubishi Electric (Japan) A total of 20 major players covered

This research report categorizes the given market based on Product, 48V, ICE, BEV, HEV, PHEV, Vehicle Type, and Region

Vehicle electrification market, by product type

Start/Stop System

Electric Power Steering (EPS)

Electric Air-Conditioner Compressor

Electric Vacuum Pump

Electric Oil Pump

Electric Water Pump

Liquid Heater PTC

Integrated Starter Generator (ISG)

Starter Motor

Alternator

Actuator

Vehicle electrification market, by degree of hybridization

Internal Combustion Engine (ICE) & Micro-Hybrid Vehicle

Hybrid Electric Vehicle (HEV)

Plug-In Hybrid Electric Vehicle (PHEV)

Battery Electric Vehicle (BEV)

48 V

48V mild-hybrid market

Vehicle electrification market, by region

Asia Oceania

Europe

North America

RoW

Recent Developments

In 2019, Bosch has planned to open a new office in Holzkirchen, Germany. A new office building and a parking facility are expected to be finished by 2021. The new office space and laboratories will be made available for 900 associates on 17,000 square meters. The new parking facility will measure 21,000 square meters, providing space for around 800 cars and around 130 bicycles.

In 2019, Continental presented the third generation of power electronics in an electric SUV of a European manufacturer, providing current of up to 650 amps. The third generation delivers six times the performance of the first, while its weight has been reduced from 12 kilograms to 8 kilograms. The new power electronics can be used in a broad range of electric vehicles.

In 2019, DENSO and Hitachi Power Semiconductor Device, Ltd, a supplier of semiconductors, developed a high-efficiency diode for alternators for gasoline and diesel engine vehicles. Alternators equipped with newly developed diodes for vehicles were to be sold in Europe in FY2019 and will be rolled out to manufacturing group companies around the world.

In 2019, Bosch assumed full control of EM-motive, one of Europe�s most successful manufacturers of electric motors. Bosch and Daimler set up EM-motive GmbH as a 50-50 joint venture in 2011, and from 2019 onward, Bosch has gained complete control over EM-motive.

In 2017, Changchun Branch of Robert Bosch Motor (China) Co., Ltd. signed an agreement with the Changchun High Tech Industrial Development Zone to establish a starter motor plant in the area with an annual capacity of 3 million sets. A total of USD 29 million was invested in the project.

Frequently Asked Questions (FAQ):

Which level of vehicle hybridization is going to dominate the market in the future? Plug-in Hybrid Vehicle (PHEV) is the fastest growing segment in the vehicle electrification market. Automakers are seeing plug-in hybrids as a gateway to fully electric vehicles. Increasing charging infrastructure in China, the US, and European countries would be responsible for the shift from conventional ICE vehicles to PHEVs. How are industry players addressing the challenge of maintaining a balance between performance and low-cost electric components? Fast-paced developments to achieve greater efficiency is the major focus of industry players. What could be the market size of vehicle electrification products? The vehicle electrification market is projected to grow at a CAGR of 11.9% to reach USD 129,605 million by 2025 from USD 73,726 million. Which electric components will lead the market for vehicle electrification in the near future? Actuator, Electric Power Steering (EPS), and Alternator are the top 3 products in the vehicle electrification market. These products would continue to dominate the market in the future. .

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