By Claudio Vittori
What is the status of the global electric vehicle component industry now? What are the challenges the industry is facing and what would be the shape of it by the end of this decade?
Over the next ten years, the rapid pace of developments in the alternative powertrain domain is expected to flood the automotive industry with varying powertrain options. Internal combustion engine (ICE) vehicles will witness a declining share of the market, replaced by alternative powertrain technologies.
Alternative powertrain technologies such as mild-hybrid electric vehicles (MHEVs), full/plug-in hybrid electric vehicles (HEVs), battery electric vehicles (BEVs), and fuel-cell electric vehicles (FCEVs), exhibit superior performance and emissions characteristics over conventional ICE vehicles.
The penetration of alternative powertrain technologies, although significant, is forecast to remain markedly different among the various regions, with Europe and Greater China leading the way. The impact of the COVID-19 pandemic has tremendously affected the conventional powertrain market, as witnessed in the declining ICE vehicle productions in 2020 compared to 2019. However, no such adverse impact has been observed for the alternative powertrain domain; in fact, e-motor production volumes increased in 2020 over the previous year.
The Claw-pole synchronous motors are expected to remain the preferred motor type for Mild-hybrid vehicles.
With the growth in alternative powertrain technologies, the demand for electrified powertrain components will also increase in tandem. The demand for electric motors is expected to grow from 14 million component units in 2020 to around 100 million units in 2030. Today, about 50% of the demand for electric motors is from full-hybrid vehicles, whereas, around 45% of the electric motors produced in 2030 will be equipped with BEVs.
The Claw-pole synchronous motors are expected to remain the preferred motor type for Mild-hybrid vehicles. For full-hybrid and battery electric vehicles, the use of permanent magnet motors should remain widespread, owing to their higher torque density, better efficiency, and smaller packaging envelope. In a similar fashion, increasingly nickel-rich chemistries for battery cells, such as NMC622 and NMC811, are likely to be the preference of most mainstream automakers globally.
Since the battery capacities are significantly higher in BEVs than other electrified vehicles, BEVs will be the main driver of battery cell demand.
Since the battery capacities are significantly higher in BEVs than other electrified vehicles, BEVs will be the main driver of battery cell demand. Global battery cell annual production will grow from around 142 GWh in 2020 to more than 2300 GWh by 2030. Of the 2300 GWh production forecast in 2030, around 94% of the battery cells produced will be used in BEVs.
The global inverter market witnessed the production of about 13 million units in 2020, with the production volume forecast to grow to more than 80 million units in 2030, representing a CAGR of 19%.In 2020, about 24% of BEVs were equipped with SiC-based inverters. In 2030, the SiC-based inverters will find their application in more than 47% of the BEVs and FCEVs produced in that year. (cabin + battery & BMS cooling)
Thermal components are also expected to follow a similar trend, albeit with significantly higher volumes given the fact that multiple electrically driven water pumps are required in each vehicle depending upon the electrification level. IHS Markit expects that the demand for electrically driven water pumps for full hybrid, BEVs and fuel cell vehicle production will increase to more than 40 million units annually by 2025, growing from 10 million units in 2020. Again, the primary driver will be BEVs accounting for around 60% of the market demand.
With the move to electrified powertrain technology, OEMs are looking for new, more simplistic integration solutions, which ultimately leads to a smaller number of components required. Paired with this is the optimization of component volume, cost and weight whilst the vehicle’s interior space are liberated from intrusion by propulsion system components.
Various internal and external factors affect the supply chain of alternative powertrain components. The value creation of the supply chain is driven by the technology of the component, production scalability, supplier, and OEM footprint, supplier integration level, and the sourcing strategy of the OEMs.
In the e-mobility space, we have witnessed new and interesting strategies, collaborations, and joint ventures among component suppliers to expand their offerings and capture the new markets as and when they arise. A case in point is the e-axle domain where the electric motor, inverter, and transmission suppliers have increasingly joined hands to provide integrated electric propulsion solutions, requiring power electronics and thermal management functionality to be more flexible and to support modular approaches.
This will pave the way to a reduction of the breadth of supply chain opportunity as volumes increase, especially for small and medium-sized participants. This also implies a wider involvement of the OEMs in component manufacture thanks to licensing agreements, where OEMs produce components in-house using the strategic know-how of the Tier-1 supplier or a strategic technology partner/provider, who will effectively act as the design parent.
Whilst the ‘end state’ might appear somewhat already defined and moving towards full integration, the interim period is generating a huge number of creative technical solutions for e-motor and power electronics.
The sourcing strategies of different global OEMs are remarkably different. Among the major OEMs in the electric vehicle space, Tesla has adopted vertical integration and develops most, if not all, electric powertrain components in-house. In contrast, established global OEMs rely on a trusted supplier base for most of their component requirements. The overall trend of in-house production of electrified powertrain components is expected to increase in the future.
(Claudio Vittori is Senior Technical Research Analyst – Powertrain & E-Mobility Component Research at IHS Markit.)
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