Automotive Electronics Market Size, Share & Industry Analysis, By Type (ECU/DCU, Sensors, Power Electronics, and Others), By Application (Body, Chassis, Powertrain, Infotainment, and ADAS/AD), By Vehicle Type (Passenger Cars and Commercial Vehicles), By Propulsion (ICE and Electric/Hybrid), and Regional Forecast, 2024-2032

The global automotive electronics market size was valued at USD 259.63 billion in 2023. The market is projected to grow from USD 279.93 billion in 2024 to USD 425.19 billion by 2032, exhibiting a CAGR of 5.4% during the forecast period.

Automotive electronics refers to the application of electronic systems and components in vehicles for various purposes, including vehicle control, safety, communication, entertainment, and connectivity. These electronic systems and components are designed to enhance the performance, efficiency, comfort, and overall user experience of automobiles.

This market has experienced substantial growth in recent years, primarily driven by the increasing demand for safety features, Advanced Driver Assistance Systems (ADAS), connectivity solutions, and Electric Vehicles (EVs). The market encompasses a wide range of electronic components and systems used in automotive, which includes powertrain electronics, infotainment systems, advanced sensors, control units, and telematics systems.

Although, the market witnesses a complex regulatory landscape, high development costs, and cyber security concerns, which restrains the market growth. The rise in electric vehicle sales, growing demand for connected cars, and advancement in ADAS technology to develop the market growth over the forecast period.

The COVID-19 pandemic disrupted global supply chains, causing a shortage of electronic components and raw materials needed for vehicle electronics manufacturing. The shortage of semiconductor chipsets negatively impacted the market. Furthermore, reduced vehicle production directly impacted the demand for vehicle electronics, as fewer vehicles were being manufactured. However, despite the challenges during the pandemic, acceleration digital transformation in the automotive industry led to a shift toward digitalization and connectivity. This is expected to fuel the market during the post-pandemic period.

Automotive Electronics Market Trends

Growing Demand for Electric Vehicles Supporting the Automotive Electronics Industry Development

The electric vehicle revolution is one of the prominent trends shaping the market. It encompasses the increasing adoption of electric vehicles and the associated electronic technologies. The global demand for electric vehicles has been rising steadily, driven by environmental concerns, government regulations promoting clean energy, and advancement in battery technology. This surge in demand for EVs directly impacts the vehicle electronics market, as hybrid electric vehicles and electric cars require sophisticated electronic systems to manage battery performance, motor control, energy efficiency, and charging infrastructure. For instance, According to the International Energy Agency, the share of EVs in the total vehicle sales tripled in the last three years, elevating from 4% share in 2020 to 14% in 2022. This growing share of electric vehicles in total automotive sales also contributes to the growth in the product demand over the forecast period.

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Automotive Electronics Market Growth Factors

Rising Awareness Regarding the Safety and Strict Automotive Regulations Fuels the Market Growth

The automotive industry is witnessing a growing emphasis on vehicle safety, driven by stringent regulations and consumer demand for enhanced safety features. Electronics for automotive play a vital role in implementing safety technologies such as advanced braking systems, airbags, Electronic Stability Control (ESC), collision avoidance systems, and Advanced Driver Assistance Systems (ADAS).

These electronic systems improve vehicle safety, reduce accidents, and comply with regulatory requirements. This fuels the market growth during the forecast period. In May 2023, Bosch signed a partnership with Plus, an autonomous vehicle solution provider, to provide assisted driving solutions for commercial vehicles.

RESTRAINING FACTORS

High Development Cost May Hinder the Market Growth

One of the key factors restraining the market of automotive electronics is the high cost associated with implementing advanced electronic systems and technologies in vehicles. The integration of advanced electronic systems and technologies in vehicles can significantly increase the overall cost of the vehicle. This includes the cost of components, software development, testing, and integration. The high cost of vehicle electronics can make vehicles more expensive for consumers, limiting their affordability and adoption, especially in price-sensitive markets. This hampers the overall growth of the market.

Automotive Electronics Market Segmentation Analysis

By Type Analysis

Growing Adoption of Electric/Hybrid Vehicles is Expected to Propel the Demand for ECU/DCU Components

Based on type, the market is classified into ECU/DCU, sensors, power electronics, and others. The ECU/DCU segment dominated market share in 2023. The ECU/DCU segment expansion is contributed by the growing demand for electric and hybrid vehicles. The control units play a crucial role in managing and optimizing the powertrain and energy management systems in electric vehicles, including battery control, motor control, and regenerative braking.  In December 2023, Continental AG signed a partnership with Synopsys to deliver the vehicle's digital twin capabilities and accelerate software development. The virtual electronic control unit (vECU) solution is integrated with Continental’s cloud-based development environment (CAEdge), which enables faster advancement for the Software-Defined Vehicle (SDV).

The power electronics segment is foreseen to be the fastest-growing segment in the forecast period. The market development of power electronics is highly dedicated to the development of the electric vehicle and autonomous vehicle sector. As electric vehicles and autonomous vehicles are gaining traction among consumers, this fuels the demand for the power electronics segment over the forecast period.

The sensors segmental growth is associated with the popularity of ADAS technologies in the automotive industry. These systems rely on a wide range of sensors, including radar, LiDAR, cameras, and ultrasonic sensors, to provide features such as adaptive cruise control, collision avoidance, and others. This contributes to segment development. In May 2023, Hella announced the series production of steering sensors to be used for all-electric steer-by-wire systems.

The others segment includes several vehicle electronics components such as harnesses, controls, switches, displays, and others. Automotive manufacturers focus on creating comfortable and visually appealing interiors that incorporate high-quality switches, controls, and displays. Thus, the demand for enhanced user interfaces in vehicles drives the market. In January 2023, Visteon showcased a range of digital cockpit technology at the CES event. The products included lightscape panorama display, command & control display, and others.

By Application Analysis

Growing Demand for High-Efficiency Powertrain Systems is Fueling the Growth of Automotive Electronics

Based on application, the market is segmented into body, chassis, powertrain, infotainment, and ADAS/AD.

The powertrain segment dominates the market due to its wide application in all types of powertrains, such as ICE, electric vehicles, and hybrid vehicles. The introduction of mild hybrid systems, which incorporate features such as a start-stop system, regenerative braking, and energy recuperation, fuels the market development.

The ADAS/AD segment is attributed to rapidly growing in the forecast period. Governments and regulatory bodies globally have implemented stringent safety regulations to reduce accidents and improve road safety. Thus, the increasing focus on safety drives the demand for ADAS technologies in vehicles. For instance, in May 2023, Volvo revealed the latest technology ADAS and safety features for its EX30 SUV.

The body, chassis, and infotainment segments are aimed to develop by the automotive manufacturers with cost-effective solutions that are reliable, durable, and easy to integrate into the vehicle’s architecture. Also, the demand for cutting-edge infotainment systems contributes to the market's development.

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By Vehicle Type Analysis

Huge Production Volume and Low Operating Costs of Passenger Cars Support the Segment Growth

Based on vehicle type, the market is divided into passenger cars and commercial vehicles.

The passenger cars segment dominated the market share for automotive electronics in 2023 due to the high passenger vehicle sales and production compared to other vehicle segments, such as commercial vehicles and off-road vehicles. The sheer volume of passenger cars being manufactured and sold drives the demand for electronics for automobiles over the period. According to OICA, in 2022, passenger car production increased by 7.9% compared to the previous year's production volume in 2021. Thus, increasing production and sales of passenger cars leads to the growing demand in the market.

Automotive electronics can help optimize fuel efficiency, engine performance, and powertrain management in commercial vehicles. Thus, the integration of electronics in automotive to reduce operating costs and increase overall productivity drives segmental growth.

By Propulsion Analysis

Vast Application of Electronics in Electric/Hybrid Vehicles Thrives the Segment Development

Based on propulsion, the market is considered into the ICE and electric/hybrid.

Electric/hybrid vehicles incorporate a large number of various vehicle electronics. These electronics are designed for battery management, electric motor control, regenerative braking, and charging infrastructure integration. This fuels the electric/hybrid segmental growth in the market. In January 2023, Sony, under its inaugural brand “Afeela”, signed a partnership with Honda. This partnership aims to utilize Sony’s technologies in electric vehicles beginning 2026.

Electronic Control Unit (ECU) manages various engine parameters, such as fuel injection timing, ignition timing, and air-fuel ratio, to ensure efficient combustion and maximize power output. This propels the demand for the ICE propulsion segment in the market.

REGIONAL INSIGHTS

Increasing Vehicle Safety Regulations is Expected to Support the Asia Pacific Market Dominance

The market is analyzed across North America, Europe, Asia Pacific, and the Rest of the World

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Asia Pacific dominated the automotive electronics market share in 2023 and is expected to lead with the fastest-growing CAGR throughout the forecast period. Asia Pacific is the home to a few global largest automotive markets, including South Korea, India, China, and Japan. The strong growth of the automotive industry in these countries, driven by rising disposable incomes, urbanization, and infrastructure development, fuels the demand for automotive electronics in the region. In February 2023, TATA Motors launched its SUV, the TATA Harrier, with 10 ADAS features.

North America held a significant market share in 2023. The region has a significant number of technology companies, research institutes, and automotive manufacturers focused on developing advanced electronic systems and technologies for vehicles. Thus, the drive for technological advancement and innovation fuels the automotive electronics market growth in the North America region.

Europe held a significant market share in 2023. Europe places a strong emphasis on vehicle safety and has been at the forefront of promoting ADAS. The region has introduced regulations mandating the inclusion of safety features such as automatic emergency braking, lane-keeping assist, and adaptive cruise control in new vehicles. These safety requirements drive the integration of advanced electronics for automobiles to enable these features, ensuring safer roads and enhancing the overall driving experience.

The Rest of the World comprises the Middle East & Africa and Latin America. The region leads with a certain market share in 2023. Consumers in the region are increasingly seeking vehicles with advanced features, such as infotainment systems, navigation systems, advanced driver assistance systems (ADAS), and connectivity options, which drives the demand for vehicle electronics in the market.

List of Key Companies in Automotive Electronics Market

Companies are Collaborating and Forming Partnerships to Achieve Competitive Advantage

The market is highly competitive, with several emerging and established players striving established and emerging players striving to gain a competitive edge. Key companies operating in the market include Bosch Group, Continental AG, Denso Corporation, Aptiv PLC, Infineon Technologies AG, and Panasonic Corporation. Mergers, acquisitions, collaborations, and new product launches are common strategies adopted by these companies to expand their market presence.

LIST OF KEY COMPANIES PROFILED:

• Continental AG (Germany)


• Robert Bosch GmbH (Germany)


• SONY Corporation (Japan)


• Aptiv PLC (Ireland)


• Hyundai Mobis (South Korea)


• ZF Friedrichshafen AG (Germany)


• Autoliv Inc. (Sweden)


• Magna International Inc. (Canada)


• Aisin Seiki Co. Ltd (Japan)


• Philips N.V. (Netherlands)


• Infineon Technologies AG (Germany)


• NVIDIA Corporation (U.S.)


• Valeo SA (France)

KEY INDUSTRY DEVELOPMENTS:

• October 2023- Continental, in collaboration with DeepDrive, developed wheel hub drive with integrated brakes for its application in electric vehicles.


• October 2023- NVIDIA signed a partnership with Foxconn to manufacture its highly developed autonomous EVs featuring its NVIDIA DRIVE Hyperion 9 platform. The solutions comprise the DRIVE Thor and a state-of-the-art sensor architecture.


• June 2023- Nidec Corporation signed a collaboration agreement with the Renesas Electronics Corporation. Under the agreement, the companies aim to develop semiconductor solutions for the E-Axle (X-in-1 system), which integrates the EV drive motor and power electronics for EVs.


• July 2022- Renault signed a partnership with Vitesco Technologies to develop power electronics named “One Box” for electric and hybrid powertrains. The partnership would help combine all the components, including the DC-DC converter, the onboard charger OBC, and the inverter, into a single housing.


• May 2023- IAR Systems stated that its RISC-V architecture offers enormous development potential in Taiwan, particularly in the automotive electronics industry. Meta developed its in-house Artificial Intelligence (AI) chip, which is based on the RISC-V architecture.


• March 2023- xEVs stated its plan to provide new opportunities for vehicle sensor deployment. The company aimed to cater to the need for responsive electrical current along with temperature control in their charging and drivetrain circuits and hybrid and battery-driven designs.


• March 2023- Lumotive, a U.S.-based company, developed a silicon-based semiconductor that uses software to steer a beam to detect a vehicle’s surroundings. The chips are designed to provide safety requirements across automotive industries.


• January 2023- HARMAN, a subsidiary company of Samsung Electronics and an automotive technology company, revealed its latest vehicle electronics products for vehicles. The company showcased its new product line at the CES 2023 event. HARMAN showcased products such as Ready Care, Ready Display, Ready on Demand, Ready Upgrade, Ready Vision, and Sound & Vibration Sensor+External Microphone.


• April 2023- HARMAN established an Automotive Engineering Centre in Chennai, India. With the help of this, the company aimed to acquire a leading position as a vehicle electronics supplier in India.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.

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