Vehicle electrification is speeding up globally within the major markets. The global LD vehicle market will reach 93 million units in 2028, with a 53.5% market share for xEVs. Among various electrification technologies, BEV leads the market with a 19.1% CAGR between 2022 and 2028, while the annual growth of xEV in general over the same period is 14.1%
The ICE market has started collapsing in some countries leading in electrification. In China, For example, NEV’s market share jumped from 13.4% in 2021 to 25.6% in 2022 . As a result, OEMs with large ICE portfolios have started losing market. Yole Intelligence, part of Yole Group, forecasts that the market value of all power converters for xEV combined will reach $29 billion in 2028, with a 12.2% CAGR between 2022 and 2028, thanks to high adoption rate and constant cost reduction measures.
According to Yu Yang, Ph.D., senior technology and market analyst, Power Electronics at Yole Intelligence, part of Yole Group, “In supporting the electrification trend, the power device market for xEV will reach $9.8 billion, strongly pushed by SiC MOSFET modules, which alone will be worth $5.5 billion in 2028.”
What are the key drivers of vehicle electrification? How will the market evolve? What is the market situation, and where are the new opportunities? What are the key technologies and business opportunities? Yole Intelligence releases its new market & technology report: "Power Electronics for e-Mobility 2023 – Focus on passenger & light commercial vehicles."
Tesla is pushing extremely hard for cost parity with ICE. It claims to greatly reduce costly SiC usage, with possible scenarios analyzed in detail, ranging from technological innovations, sourcing practices, to fleet strategies. This cost reduction was closely followed by Chinese EV brands led by BYD, which recently launched C-class PHEV models at the same prices as ICEs from peer brands.
Electrification goes beyond passenger vehicles. The increasing adoption of electric light commercial vehicles for "last mile delivery" requires specific models with synergies with either passenger vehicles or medium-duty commercial vehicles. Plus budget BEV potentials in the developed and developing countries alike. A new ecosystem is rapidly developing.
A new wave of consumer electronics players, such as Xiaomi, Sony, and potentially Apple, are joining the game. This could create new opportunities for existing Tier 1 suppliers, partially offsetting the trend among EV OEMs to increase in-house manufacturing.
Vertical integration alters the automotive business landscape, as the importance of power devices is more appreciated in the era of electrification. At Yole Intelligence, analysts deliver their vision:
- OEMs manufacture their own inverters: BMW, Volkswagen, Nio, etc.
- OEMs manufacture their own power modules (some through JVs): Li Auto, GWM, Dongfeng, etc.
- OEMs manufacture their own power devices (some through subsidiaries): BYD, Toyota, Geely, etc.
Si IGBT module suppliers are focusing intensely on 650/750 V and 1200 V rated devices, while SiC MOSFET module suppliers are heavily engaged in 1200 V, perfect for 800 V platforms.
According to Ana Villamor, Ph.D., team lead analyst for power electronics activities within the Power and Wireless division at Yole Intelligence, "The SiC supply chain has a unique focus on substrate materials. Most device giants, such as STMicroelectronics, onsemi, and Rohm are moving upstream to SiC wafering through M&As. In addition, OEMs and Tier 1 suppliers are working on various strategies, such as joint ventures, long-term supply agreements, and strategic partnerships to secure their supply of SiC substrates.”
China’s leading position in vehicle electrification, strongly dominated by local OEMs, is incubating a local supply chain mixed with international players. Tier 1 suppliers are becoming local, while Tier 2 suppliers are still dominated by international businesses, with many local ones underwater. Both Si IGBT and SiC MOSFET are of interest for automotive power devices. Chinese OEMs demonstrate an obsession with in-house power module packaging, which is also a perfect example of the strong focus on automotive semiconductor in China starting even far before the COVID pandemic.