Electric Vehicle Components Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Electric Vehicle Components Market is projected to expand from USD 219.57 Billion in 2025 to USD 461.52 Billion by 2031, registering a CAGR of 13.18%. This market encompasses the specialized hardware necessary for electric propulsion, including high-voltage battery packs, traction motors, inverters, and thermal management systems. The sector's growth is fundamentally driven by strict government emission regulations and financial incentives intended to hasten the shift from internal combustion engines to zero-emission transportation. These regulatory frameworks compel automakers to increase the production volume of electrified drivetrains and require the development of robust charging compatibility.

However, the market confronts a significant hurdle regarding the stability of supply chains for critical raw materials essential for battery production. Fluctuations in the availability of key minerals such as lithium and cobalt can lead to production bottlenecks that impede the ability to meet surging vehicle demand. According to the China Association of Automobile Manufacturers, the production of new energy vehicles surpassed nine million units in the first ten months of 2024. This rapid scaling exerts immense pressure on existing component supply lines and underscores the challenge of aligning upstream mining capacities with the immediate requirements of component manufacturers.

Market Drivers

Ambitious electrification targets and capital allocation by leading automotive OEMs serve as a primary catalyst for the component sector. Legacy manufacturers are restructuring their supply chains to support the production of electric drivetrains, generating sustained demand for motors, inverters, and thermal systems. This strategic pivot involves massive financial commitments to secure manufacturing capabilities and proprietary technology stacks. As noted by Honda Motor Co., Ltd. in May 2024 during the '2024 Business Briefing on Initiatives Key to the Electrification Strategy', the company intends to double its investment in electrification and software technologies to roughly 10 trillion yen through the fiscal year 2031. Such substantial capital injections directly accelerate the development and procurement of specialized hardware needed to meet the volume goals of these automotive giants.

Concurrently, the steady decline in lithium-ion battery costs is eliminating a major economic barrier to component adoption. Since the battery pack typically dictates the overall vehicle price, cost reductions in this area allow for better margins on other high-voltage components and broader market penetration. Improved manufacturing efficiencies and lower raw material prices contribute significantly to this downward pricing trend. According to a September 2024 report by Goldman Sachs titled 'Electric vehicle battery prices falling faster than expected', global average battery prices are forecast to drop to $80 per kilowatt-hour by 2026. This reduction enhances the affordability of electric mobility, thereby boosting total vehicle volume. The International Energy Agency projects that global electric car sales will reach approximately 17 million units in 2024, ensuring steady expansion of the addressable market for component suppliers.

Market Challenges

The instability of supply chains for critical raw materials acts as a severe constraint on the global electric vehicle components market. As component manufacturers strive to produce high-voltage battery packs and traction motors, their output is frequently disrupted by the volatile availability of essential minerals like lithium and cobalt. When upstream mining capacities fail to align with the rapid scaling requirements of the automotive sector, production bottlenecks emerge. These delays prevent manufacturers from fulfilling automaker orders on schedule, directly stalling the expansion of the broader electrified drivetrain market.

This disruption in the manufacturing pipeline has tangible consequences for industry output, causing fluctuations that impede steady market expansion. According to the Society of Motor Manufacturers and Traders, in 2024, the production volumes of electrified vehicles in the UK declined by 20.4% to 275,896 units compared to the previous year. Such a contraction in manufacturing output demonstrates how logistical and supply-side hurdles can physically limit the market's growth trajectory, regardless of consumer demand. Consequently, the component sector struggles to maintain consistent momentum, as the inability to secure reliable raw material inputs forces periods of stagnation.

Market Trends

Manufacturers are increasingly prioritizing Lithium Iron Phosphate (LFP) battery chemistries for standard-range vehicles to mitigate production costs and enhance thermal safety. This strategic shift allows automakers to reduce reliance on volatile nickel and cobalt supply chains while offering durable energy storage solutions that facilitate mass-market affordability. The rising dominance of this specific chemistry is evident in recent global deployment metrics, as it becomes the preferred choice for high-volume entry-level models. According to the International Energy Agency's 'Global EV Outlook 2024' published in April 2024, LFP batteries supplied more than 40% of electric vehicle demand globally by capacity in 2023, more than doubling the share recorded just three years prior.

Simultaneously, component suppliers are aggressively developing integrated 3-in-1 e-axle systems that combine the electric motor, power electronics, and transmission into a single compact unit. This architectural consolidation significantly reduces weight and packaging space, enabling vehicle manufacturers to streamline assembly processes and improve overall powertrain efficiency. Major Tier-1 suppliers are witnessing substantial financial growth from these electrified product lines as OEMs transition to these integrated modular designs. According to BorgWarner Inc.'s 'Third Quarter 2024 Results' press release from October 2024, the company expects its full-year 2024 eProduct sales to reach approximately $2.4 billion, representing a significant increase from the $2.0 billion recorded in the previous year.

Key Players Profiled in the Electric Vehicle Components Market

• Contemporary Amperex Technology Ltd.
• LG Energy Solution Ltd.
• Panasonic Holdings Corporation
• BYD Company Limited
• Samsung SDI Co. Ltd.
• Tesla Inc.
• Nidec Corp.
• Magna International Inc.
• ZF Friedrichshafen AG
• Robert Bosch GmbH

Report Scope

In this report, the Global Electric Vehicle Components Market has been segmented into the following categories:

Electric Vehicle Components Market, by Vehicle Type:

• Passenger Vehicles
• Commercial Vehicles

Electric Vehicle Components Market, by Propulsion Type:

• Battery Electric Vehicle
• Plug-in Hybrid Electric Vehicle
• Fuel Cell Electric Vehicle
• Hybrid Electric Vehicle

Electric Vehicle Components Market, by Component Type:

• Battery Packs
• DC-DC Converter
• Controller & Inverter
• Motor
• On-Board Chargers
• Other Component Types

Electric Vehicle Components Market, by Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Electric Vehicle Components Market.

Available Customization

The analyst offers customization according to your specific needs. The following customization options are available for the report:

• Detailed analysis and profiling of additional market players (up to five).

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