The global electric vehicle market was valued at $162.34 billion in 2019 and is projected to reach $802.81 by 2027, according to Portland, Ore.-based Allied Market Research. But most purchases of electric vehicles last year were generated abroad, with Asia-Pacific and Europe accounting for 74.8% of sales. Still, with mandates to reduce emissions and increase fuel efficiency across many states, North America is expected to see a compound annual growth rate (CAGR) of 27.5% through 2027.
In Colorado, for example, Gov. Jared Polis wants 940,000 electric vehicles on the road by 2030, said Tim Jackson, president and chief executive of the Colorado Automobile Dealers Association. Jackson estimates that in a good year, roughly 200,000 new vehicles are sold in Colorado, but only 3%, or about 6,000, of those are electric vehicles. At that pace, it would be impossible for the state to meet Polis’s mandate. Colorado ranks No. 4 in the nation in terms of the number of electric vehicles on the road, Jackson said.
There are several reasons sales aren’t as robust as they could be, Jackson said. First, electric vehicles are considerably more expensive than their gasoline-powered counterparts. A Nissan Leaf, for example, starts at about $38,000, compared with the automaker’s Versa or Centro models that start between $18,000 and $20,000. Then there’s what Jackson calls “range anxiety,” or fear that the vehicle’s charge won’t last long enough. Consumers also are nervous about finding charging stations and how long their vehicles will take to charge — it often takes more than four hours to fully charge an electric vehicle.
“Most of the people that buy these electric vehicles are buying them as a second or third car,” Jackson said. “They typically have an annual income of $100,000 or greater.”
Race for Dominance
The global electric vehicle market is dominated by companies such as Tesla in the United States; BYD Co. in China; BMW in Germany; and Nissan in Japan. The mid-priced electric vehicle category, which is expected to grow at the highest CAGR, has limited features with less emphasis on infotainment, instrument cluster, and other expensive features, according to Markets and Markets.
And with sales of electric vehicles on the rise, luxury automakers like Mercedes-Benz and Porsche are introducing their own luxury cars. Even high-end brands such as Rolls Royce and Bugatti have hinted that they’ll be releasing their own electric brands in the future.
But it’s not just passenger vehicles that are gaining traction. With the adoption of electric buses, most notably in China and India, the commercial vehicle segment is expected to be the fastest-growing market in the sector. And many companies are working to electrify delivery and distribution trucks on the road, but the challenge, as with passenger vehicles, is installing enough charging stations along interstate highways to keep long-haul trucks on the road. Currently, less than 1% of fleet vehicles are electric, but that number is expected to grow to 12 % by 2030.
Electronic Control Units
A key component in electric vehicles, as well as their gas-powered counterparts, is the electronic control unit (ECU). An ECU is a system that’s embedded in an automobile’s electronics that controls one or more of the vehicle’s electrical systems. The types of systems an ECU can control include doors, seats, tire pressure monitor, parking sensors, and water coolant temperatures. They also help reduce emissions and improve fuel economy.
The growing demand for electric vehicles is expected to drive the global ECU market, which is expected to reach $17.77 billion by 2024, according to the Global Electric Vehicle ECU Market report now available on Research and Markets, a Dublin, Ireland-based market research store.
The ECU market is dominated by German and Japanese companies. Key vendors in the ECU market include Robert Bosch GmbH in Gerlingen, Germany; Denso Corp. in Kariya, Japan; Aptiv in Dublin, Ireland; ZF Corp. in Friedrichashafen, Germany; Mitsubishi Electric and Hitachi in Tokyo; Continental AG in Hanover, Germany; and Autoliv in Stockholm, Sweden. In the United States, Southfield, Mich.-based Lear Corp. is among the big players in the market.
Robert Bocsch, which generated $913.7 billion in revenue last year, is among Germany’s largest engineering and electronic companies. In 2018, it invested about $120 million to build an ECU smart factory in Celaya, Mexico to make ECUs for the North American Market.
Continental’s 2019 sales were up 0.2% to $52.3 billion. But the company anticipates its sales will decline because global production of passenger cars and light commercial vehicles is expected to decrease for the third consecutive year because of the impact the coronavirus is having on production volumes.
Aptiv’s 2019 revenue totaled $14.4 billion, representing 4% growth over the previous year.
“Although the overall number of our top competitors has decreased due to ongoing industry consolidation, the automotive technology and components industry remains extremely competitive,” according to Aptiv’s annual report. “Furthermore, the rapidly evolving nature of the markets in which we compete has attracted, and may continue to attract, new entrants, particularly in best cost countries such as China and in areas of evolving vehicle technologies such as automated driving and mobility solutions, which has attracted competitors from outside the traditional automotive industry.”
About the Author
Margaret is an award-winning journalist who spent nearly 25 years in the newspaper industry. She has covered a variety of business topics, including residential and commercial real estate, technology, telecommunications, and cannabis.