Europe Automotive LED Lighting Market SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS UP TO 2030

Europe Automotive LED Lighting Market Analysis

The Europe Automotive LED Lighting Market size is estimated at 2.56 billion USD in 2025, and is expected to reach 3.35 billion USD by 2030, growing at a CAGR of 5.55% during the forecast period (2025-2030).

The European automotive LED lighting industry is undergoing a significant transformation driven by stringent safety regulations and technological advancements. The European Union has intensified its focus on road safety, as evidenced by approximately 20,600 road fatalities recorded in 2022, representing a 3% increase from 2021. This has led to the implementation of mandatory daytime running lights (DRL) for all European passenger cars and pick-up vans, while trucks and buses have followed suit since 2012. The European Commission's Strategic Action Plan on Road Safety and the EU Road Safety Policy Framework 2021-2030 has set ambitious targets to reduce road fatalities by 50% by 2030, driving the adoption of advanced automotive lighting technologies.

The manufacturing landscape is experiencing substantial evolution, with major automotive producers adapting to changing market demands. Spanish automotive production, for instance, reached 2,219,462 vehicles in 2022, marking a 5.8% increase compared to 2021. Traditional combustion engines still dominate production, with over 80% of vehicles produced in Spanish plants being combustion models in 2023. Major manufacturers are investing heavily in modernizing their production facilities, as exemplified by Tesla's announced USD 1.5 billion investment in Spain for a new electric car factory in June 2023, demonstrating the industry's commitment to future growth.

The shift towards electric mobility is reshaping the automotive lighting sector, with manufacturers developing specialized LED solutions for electric vehicles. Hybrid electric vehicles have shown remarkable growth, with sales increasing by 22.1% to 197,982 units, driven by impressive performance across major markets. This transition is supported by significant technological partnerships, such as the collaboration between Nichia and Infineon Technologies AG in 2023 for developing high-resolution 16,000 micro LEDs for headlight applications, specifically targeting the luxury automotive segment.

Innovation in automotive lighting technology continues to accelerate, with manufacturers focusing on advanced features and energy efficiency. Companies are investing in research and development to create more sophisticated lighting solutions, as demonstrated by HELLA's introduction of the FlatLight technology in 2023 for daytime running lights. The industry is witnessing a surge in strategic collaborations, exemplified by Valeo and SRG Global's partnership agreement to provide externally illuminated faceplates to the automotive industry. These developments are complemented by the emergence of new lighting technologies such as matrix beams, adaptive front lighting systems, and pixel lighting, particularly in luxury vehicles designed to enhance driving comfort and safety. The integration of automotive smart lighting systems is also becoming more prevalent, enhancing the functionality and safety of vehicles.

Europe Automotive LED Lighting Market Trends

Increasing EV sales are expected to drive the LED market in Europe

• The total automobile vehicle production in South Korea was 17.67 million units in 2022, and it is expected to reach 18.33 million units in 2023. The first Chinese factory closures disrupted the supply chains of the European automotive sectors. The average downtime for automotive plants throughout EU Member States was 30 days, with Sweden experiencing the most minor downtime (15 days) and Italy experiencing the highest (41 days). The EU automobile sector lost 3.6 million vehicles from production in the first half of 2020, amounting to a loss of EUR 100 billion (USD 107.9 billion). This number climbed to 4,024,036 motor vehicles by the end of September 2020, accounting for 22.3% of the EU's 2020 production. Such production loss in Europe ultimately had a negative impact on LED lights in the automotive sector.
• Volkswagen Group, Stellantis, Mercedes-Benz, BMW, Porsche, Hurtan, GTA Motors, Audi, and Peugeot are the major automotive car manufacturers in the region. With the rise in EVs and technological advancements in the fuel types utilized in vehicles, the region is seeing a significant transformation in its automotive industry. Battery electric vehicle sales in the EU are still rising quickly. For instance, 12.1% of the 9.1 million vehicles sold in EU markets in 2022 were fully battery electric vehicles, as compared to a share of just 1.9% in 2019 and 9.1% in 2021. About 22.6% of sales were made up of hybrid electric cars, and 9.4% of sales were made up of the more recent and eco-friendly plug-in hybrids. With the growing usage of EVs, the demand for semiconductors and LEDs in vehicle lighting is high due to their efficiency.

Increasing EV registrations and government policies for EV adoption may drive the growth of the LED market

• The adoption of EVs across Europe is growing rapidly. In Europe, sales of electric vehicles (BEVs, PHEVs, EREVs, and FCEVs) totaled 2.59 million units, up by 15% from 2021 and by 92% from 2020. Norway (79%), Sweden (33%), the Netherlands (23%), and Denmark (21%) had the highest market shares of EV sales in Europe in 2022, followed by Finland, Switzerland, and Germany, with an 18% share of EV registrations each in Europe in 2022. In 2022, battery electric vehicles (BEVs) accounted for 12.1% of the total market share, up from 9.1% in 2021 and 1.9% in 2019.
• In 2016, the number of battery-electric cars in the United Kingdom was 30,669, and by May 2023, this number reached 784,968. More than 265,000 battery-electric vehicles were registered in 2022, a 40% increase over 2021. The British government strongly supports the people who are choosing EVs to increase the number of registered electric vehicles in the United Kingdom. Buyers can benefit from the Plug-In Grant, which offers a discount of up to EUR 2,500 (USD 2,699) on new EVs. Scotland also offers interest-free loans on purchases of new and used EVs.
• As part of a restructuring strategy for the automotive industry, France planned to raise subsidy rates in May 2020. The main reason was a drop in sales caused by the COVID-19 pandemic. The maximum subsidy rate was increased from USD 6,479 to USD 7,558.8 at the time. In mid-2021, the maximum rate was reduced from USD 7,558.8 to USD 6,478.9. In 2023, the government reduced subsidies for electric cars to USD 5,399 from USD 6,478.9, effective from January 2023. It also set a target of producing two million electric vehicles per year by 2030. These advancements in the market are expected to drive the demand for automotive LEDs in the region in the coming years.

OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT

Segment Analysis: Automotive Utility Lighting

Headlights Segment in Automotive LED Lighting Market

Headlights represent the dominant segment in the European automotive LED headlight market, commanding approximately 60% of the market share in 2024. This significant market position is driven by stringent European safety regulations requiring high-performance lighting systems and the increasing adoption of advanced LED headlight technologies in both premium and mass-market vehicles. The segment's growth is further supported by the rising integration of adaptive LED headlight systems, which offer enhanced visibility and safety features. Major automotive manufacturers are increasingly incorporating sophisticated LED headlight technologies, including matrix beam systems and pixel lighting solutions, particularly in their electric vehicle offerings. The segment's dominance is also reinforced by the growing consumer preference for vehicles equipped with advanced lighting systems that provide better road illumination and improved energy efficiency.

Daytime Running Lights (DRL) Segment in Automotive LED Lighting Market

The Daytime Running Lights (DRL) segment demonstrates strong growth potential in the European LED daytime running light market through 2024-2029. This growth is primarily driven by mandatory DRL regulations across the European Union for all new passenger cars and commercial vehicles. The segment's expansion is further supported by the EU's Strategic Action Plan on Road Safety and Road Safety Policy Framework 2021-2030, which emphasizes vehicle safety through enhanced lighting systems. The increasing focus on reducing road fatalities and improving vehicle visibility during daytime has led to greater adoption of LED-based DRL solutions. Manufacturers are developing energy-efficient DRL systems that consume only 25-30% of the energy required for conventional low beams, making them particularly attractive for electric vehicles where energy efficiency is crucial.

Remaining Segments in Automotive Utility Lighting

The automotive lighting market encompasses several other crucial segments including directional signal lights, reverse lights, stop lights, and tail lights, each serving specific safety and functionality purposes. Directional signal lights are essential for vehicle communication and safety, while reverse lights provide necessary illumination during backing maneuvers. Stop lights and automotive LED tail lights market play critical roles in vehicle visibility and safety during braking and nighttime driving. These segments are experiencing steady growth driven by technological advancements in LED efficiency and design innovations. The integration of smart lighting features and the increasing focus on vehicle aesthetics continue to drive innovation across these segments, particularly in premium vehicle segments and electric vehicles where distinctive lighting signatures are becoming increasingly important for brand differentiation.

Segment Analysis: Automotive Vehicle Lighting

Passenger Cars Segment in Automotive LED Lighting Market

The passenger cars segment dominates the European automotive LED exterior lights market, commanding approximately 83% of the total market value in 2024. This substantial market share is driven by the increasing adoption of LED lighting technologies in modern passenger vehicles, particularly in premium and electric vehicle segments. The segment's growth is further bolstered by stringent European regulations mandating energy-efficient lighting solutions and advanced safety features. The surge in electric vehicle sales, with battery electric vehicles accounting for nearly 12% of new registrations, has significantly contributed to LED adoption as these vehicles typically feature more sophisticated lighting systems. Major European automakers like Volkswagen, BMW, and Mercedes-Benz are increasingly incorporating advanced LED lighting solutions in their vehicle lineups, including adaptive driving beam systems and dynamic signal lighting, further solidifying the segment's market leadership.

Remaining Segments in Automotive Vehicle Lighting

The commercial vehicles and two-wheelers segments complete the automotive LED lighting market landscape in Europe. The commercial vehicles segment has established itself as a significant market contributor, driven by the increasing adoption of LED lighting in trucks, buses, and light commercial vehicles. This segment's growth is supported by the rising demand for fleet safety features and energy-efficient lighting solutions. The two-wheelers segment, while smaller in market share, represents an emerging opportunity in the LED lighting market, particularly with the growing popularity of electric motorcycles and scooters in urban areas. The segment is witnessing increased integration of LED lighting solutions, especially in premium motorcycle models and electric two-wheelers, as manufacturers focus on enhancing both safety features and aesthetic appeal. Additionally, the rise of automotive ambient lighting in vehicles is contributing to the enhanced driving experience and vehicle personalization, further influencing market dynamics.

Europe Automotive LED Lighting Market Geography Segment Analysis

Europe Automotive LED Lighting Market in Germany

Germany maintains its dominant position in the automotive LED lighting market, commanding approximately 29% market share in 2024. The country's leadership is driven by its robust automotive manufacturing ecosystem, with major players like BMW and Audi adopting advanced lighting technologies. The federal government's initiative to provide subsidies to local LED chip makers has strengthened the domestic supply chain. German authorities are actively working to attract chip manufacturers by offering substantial financial aid, with plans worth EUR 14 billion in support. The country's automotive industry, particularly known for luxury vehicle manufacturing, continues to push technological boundaries in LED lighting applications. The integration of micro LED technology in luxury vehicles, exemplified by the joint development between Nichia and Infineon Technologies AG for high-resolution 16,000 micro LEDs in headlight applications, showcases the market's innovative trajectory. The competitive environment within Germany's automotive sector has fostered increased adoption of sophisticated LED lighting solutions, particularly in premium vehicle segments.

Europe Automotive LED Lighting Market in United Kingdom

The United Kingdom's automotive LED lighting market is projected to grow at approximately 5% CAGR from 2024 to 2029, marking it as the fastest-growing market in Europe. The British government's strong support for electric vehicle adoption has created a ripple effect in the automotive lighting sector. The country's comprehensive electrification policy, backed by significant investments in the transport sector, has catalyzed innovation in automotive lighting technologies. The implementation of the Plug-In Grant scheme, offering substantial discounts on new EVs, has accelerated market growth. The UK's strategic focus on infrastructure development, including the planned installation of 7,500 additional electric vehicle charging stations, complements the growing demand for advanced automotive lighting solutions. The government's commitment to retrofitting lights on national highways, with a planned investment of USD 166.8 million, demonstrates the strong emphasis on LED technology adoption. The market's growth is further supported by the UK Global Tariff regime, which has eliminated tariffs on LED lamps, reducing costs for businesses and encouraging wider adoption.

Europe Automotive LED Lighting Market in Spain

Spain's automotive LED lighting market benefits from its position as one of the world's crucial automobile producers. The country's automotive production capabilities have shown remarkable resilience and growth, with production facilities operating at increased capacity. The Spanish government's prioritization of electric vehicles to create jobs and meet Europe's 2035 ban on new petrol and diesel car sales has attracted significant investments from global players. Major manufacturers are establishing a presence in the Spain LED lighting market, with companies like Tesla planning substantial investments in electric car manufacturing facilities. The entry of international players like BYD, launching three EV models and establishing groundbreaking stores in Barcelona and Madrid, has diversified the market landscape. The development of charging infrastructure, exemplified by Circontrol's launch of powerful urban charging centers, has created additional opportunities for LED lighting applications in the automotive sector.

Europe Automotive LED Lighting Market in France

France's automotive LED lighting market is characterized by continuous innovation and strategic developments in the domestic LED lighting manufacturing sector. The country's position as a leading market for light commercial vehicles has created substantial opportunities for LED lighting applications. The government's ambitious target of producing two million electric vehicles annually by 2030 has spurred investments in automotive technology, including lighting solutions. French automotive manufacturers are actively developing innovative products, with companies like Stanley introducing advanced lighting systems with integrated sensors. The market has also benefited from strategic partnerships between French and Japanese companies, with investments exceeding EUR 23 billion planned over five years. The country's robust charging infrastructure development, with plans to establish 100,000 charging stations, has created a conducive environment for electric vehicle adoption and associated lighting technologies.

Europe Automotive LED Lighting Market in Other Countries

The Europe LED lighting market in other European countries demonstrates diverse growth patterns influenced by regional automotive manufacturing capabilities and electric vehicle adoption rates. Countries like Italy, the Netherlands, Denmark, and Sweden show strong potential, particularly driven by their high electric vehicle market shares. The Nordic countries, especially Norway and Sweden, lead in battery electric vehicle adoption, supported by extensive charging infrastructure networks. Eastern European countries are emerging as important manufacturing hubs, attracting investments in automotive production facilities. The market dynamics in these regions are shaped by government initiatives promoting sustainable transportation solutions and stringent safety regulations requiring advanced lighting systems. The integration of smart lighting technologies and the growing emphasis on energy efficiency continue to drive market development across these European nations, contributing to the broader Europe smart lighting market.

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