Market Trends of Automotive Fuse Industry
Electric/Hybrid Vehicles is Anticipated to Grow at Major Rate
- Currently, the trend toward vehicle electrification is attaining traction. Governments worldwide are transitioning from internal combustion and hybrid cars to all-electric vehicles, which impacts power system operations. This is anticipated to open up many possibilities in future system enhancements to decrease pollutant emissions and reliance on fossil fuels. As a result, the trend toward car electrification is anticipated to boost sales of automobile components, such as automotive fuse boxes.
- According to IEA, the net-zero emissions by 2050 Scenario sees an electric vehicle fleet of over 300 million in 2030 and electric vehicles accounting for 60 percent of new car sales. Countries such as China and the European region are leading the EV race, with other regions increasing their EV adoption rate.
- Incentives and mandates are also boosting the demand for EVs. Governments are delivering several incentives to boost electric car sales as nations focus on reducing vehicle emissions. Further, the EPA and NHTSA proposed implementing the Safer Affordable Fuel-Efficient (SAFE) vehicles rules (2021-2026). These laws may set corporate average fuel economy standards and greenhouse gas (GHG) emissions for light, commercial, and passenger vehicles. The Zero Emission Vehicles Program requires OEMs to sell exact numbers of clean and zero-emission automobiles (hybrid, electric, and fuel cell-powered commercial and passenger cars). The ZEV plan desires to put 12 million ZEVs on the road by 2030.
- Hence, the significantly growing electric vehicle market, alongside the integration of more fuses in the operational models, is anticipated to accelerate the demand in the studied market during the forecast period. Several major automakers have also stated in recent years that they intend to expedite the transition to a fully electric future by converting existing manufacturing capacity and establishing new product lines. For instance, Toyota declared the launch of 30 battery electric vehicle (BEV) models, aiming to reach 3.5 million annual EV sales by 2030. Lexus desired to sell 100% BEVs globally by 2035. By 2030, Volkswagen anticipated all-electric car sales to approach 70 percent in Europe, 50 percent in China, and 100 percent in the United States, with nearly all zero-emission motorcars by 2040. Such trends create a favorable outlook for the growth of the studied market.
- The growing proliferation of hybrid electric vehicles also supports the studied markets, as the inclusion of more electrical units significantly enhances the number of automotive fuses used in these vehicles. According to IEA, about 2.9 million of the latest plug-in hybrid electric cars were sold worldwide in 2022. Plug-in hybrid electric vehicle (PHEV) sales accounted for approximately 28.4 percent of EV sales in 2022. Meanwhile, battery electric cars accounted for most of the global sales that year.
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Asia-Pacific is Expected to Register a Significant Growth Rate
- Asia-Pacific is expected to hold a significant automotive fuse market, with a considerable growth rate over the forecasted period, owing to the presence of several prominent car manufacturers in nations such as India, China, and Japan. The region's expanding government efforts are also aiding the electric vehicle market's growth. For instance, the Indian government's Automotive Mission Plan 2016-26 is a joint initiative by the Government of India and the Indian automotive firms to lay down the roadmap for the development of the industry. Further, the government of India expects the automobile sector to attract USD 8-10 billion in local and foreign investments by 2023.
- Driven by such trends, Indian automotive manufacturers are also extending their efforts, which is contributing to the overall development of the EV ecosystem in the country. For instance, in December 2022, Mahindra & Mahindra invested USD 1.2 billion in an EV manufacturing plant in Pune. Further, in September 2022, Hero MotoCorp announced an investment of USD 60 million in California-based Zero Motorcycles to collaborate on developing electric motorcycles.
- Governments across various countries are taking similar initiatives, encouraging automobile manufacturers to enhance their efforts towards the electrification of vehicles. For instance, several automakers in China are making changes to match the 2030 carbon peaking aim. By 2024, Dongfeng, a leading automobile manufacturer in China, intends to electrify 100 percent of its new passenger car models. BYD, another Chinese automotive company in 2022, announced that they will only produce BEVs and PHEVs in the future.
- Furthermore, the government of India has launched various initiatives to facilitate the manufacturing and adoption of electric cars in India to reduce emissions and create e-mobility in the wake of rapid urbanization. The government recently announced an extension of phase two of the FAME scheme through 2024. This phase focuses on electrifying public and shared transportation through subsidizing e-buses, electric three-wheelers, electric passenger vehicles, and electric two-wheelers.
- For instance, Skoda Auto recently announced its plan to manufacture electric vehicles in India. However, before committing to local manufacture, the company might bring its first EV, the Enyaq, to market as a CBU. In May 2023, Hyundai announced a USD 2.45 billion investment in the state of Tamil Nadu, India, over the next ten years to drive the production growth of EVs in the country. Hence, such trends are anticipated to drive the demand for automotive fuse in the Asia Pacific region during the forecast period.
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