Automotive Power Modules Market

Increased Adoption of Electric Vehicles Drives Market Growth

The increased adoption of electric vehicles is driving the market CAGR for automotive power modules. The demand for electric vehicles is increasing quickly as a result of the need to meet future energy requirements. The necessity for environmentally friendly transportation is a major factor in the demand for electric automobiles. The EV market is emerging as a crucial component of the automotive sector and is a solution to improve energy efficiency as well as minimise pollution and other glasshouse gas emissions.

Furthermore, rising energy prices and competition between new energy-efficiency technologies are further factors anticipated to boost industry expansion. In 2017, the number of new electric car sales worldwide exceeded one million. Comparing this to 2016, there was an increase of roughly 54%. The industry exceeded 2 million sales in 2018. In some nations, like Norway, where ICE sales have reached a saturation point, consumers are choosing electric vehicles over ICE models at a higher rate.

Due to this paradigm shift in the mobility industry, businesses are even working to develop and manufacture power modules for electric cars. Companies including Infineon Technologies AG, Fuji Electric, Mitsubishi Electric, and Danfoss Group are among those working on relevant items right now and are anticipated to update their product lines in the future. Over the course of the forecast, this is anticipated to support market expansion.

In addition, the excellent utilisation of automotive power modules in electric and hybrid vehicles is becoming more and more well-known. These aid in giving the cars safety precautions for the actual physical confinement of different power parts. These include, among other things, power semiconductors as devices. As they are normally soldered on any electronic substrate that aids in delivering the power semiconductors, these are also known as dies. These aid in supplying thermal and electrical contact and then guarantee that there is electric insulation available when needed.

The Global Automotive Power Modules Market Industry is poised for substantial growth, with projections indicating a market value of 20.3 USD Billion by 2035. This anticipated growth reflects the increasing adoption of electric and hybrid vehicles, driven by consumer demand and regulatory pressures. The market is expected to experience a robust CAGR of 18.48% from 2025 to 2035, highlighting the industry's responsiveness to evolving technological and environmental landscapes. The growth trajectory suggests a strong future for automotive power modules, as manufacturers continue to innovate and adapt to meet the demands of a rapidly changing market.

The increasing global demand for electric vehicles (EVs) is a primary driver for the Global Automotive Power Modules Market Industry. As consumers and governments alike prioritize sustainability, the shift towards EVs necessitates advanced power management solutions. In 2024, the market is valued at approximately 3.14 USD Billion, reflecting the industry's response to this trend. The transition to electric mobility is expected to accelerate, with projections indicating that by 2035, the market could reach 20.3 USD Billion. This growth is indicative of the automotive sector's commitment to reducing carbon emissions and enhancing energy efficiency.

The rise in hybrid electric vehicles (HEVs) is contributing to the expansion of the Global Automotive Power Modules Market Industry. HEVs combine traditional internal combustion engines with electric propulsion systems, requiring sophisticated power management solutions. As consumers seek more fuel-efficient options, the demand for HEVs is expected to grow. This trend is supported by various incentives and subsidies offered by governments to promote cleaner transportation. The increasing adoption of HEVs is likely to drive the market's growth, as manufacturers invest in developing advanced power modules that cater to the unique requirements of these vehicles.

The expansion of automotive electrification is a crucial factor driving the Global Automotive Power Modules Market Industry. As the automotive landscape evolves, manufacturers are increasingly integrating electric components into their vehicles, necessitating efficient power management systems. This shift is evident in the growing number of electric and hybrid models being introduced by major automakers. The electrification trend is expected to accelerate, with the market projected to grow significantly in the coming years. This transition not only enhances vehicle performance but also aligns with global efforts to reduce reliance on fossil fuels, thereby fostering a more sustainable automotive ecosystem.

Regulatory support for emission reduction is a significant driver of the Global Automotive Power Modules Market Industry. Governments worldwide are implementing stringent regulations aimed at reducing greenhouse gas emissions from vehicles. This regulatory landscape encourages automakers to invest in advanced power modules that enhance vehicle efficiency and reduce emissions. For instance, the European Union's Green Deal aims to make Europe climate-neutral by 2050, which is likely to spur demand for electric and hybrid vehicles. Consequently, the automotive power modules market is expected to benefit from these initiatives, aligning with global sustainability goals and driving market growth.

Technological advancements in power electronics are significantly influencing the Global Automotive Power Modules Market Industry. Innovations such as silicon carbide (SiC) and gallium nitride (GaN) technologies are enhancing the efficiency and performance of power modules. These materials allow for higher switching frequencies and improved thermal management, which are crucial for modern automotive applications. As a result, manufacturers are increasingly adopting these technologies to meet the growing demands for efficiency and reliability in electric and hybrid vehicles. This trend is likely to contribute to the market's projected CAGR of 18.48% from 2025 to 2035, underscoring the importance of continuous innovation.

By region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. The Asia Pacific region dominates the global market for automobile power electronics. In 2022, Asia Pacific will have 45.80% of the worldwide market. Market growth is being driven by the region's increased vehicle production and the increasing presence of automotive power electronics manufacturers. Furthermore, a huge population base, rising middle-class income, and fast urbanisation create significant vehicle demand, which supports the growth of the automotive power electronics market.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: Automotive Power Modules Market Share By Region 2022 (USD Billion)

Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

Europe’s automotive power modules market accounts for the second-largest market share due to increased investment by various main important players is another element driving market demand in this area. Further, the German automotive power modules market held the largest market share, and the UK automotive power modules market was the fastest growing market in the European region

The North America Automotive Power Modules Market is expected to grow at the fastest CAGR from 2023 to 2032. This is due to increasing competition among several major key players, as well as increased investment by the public and private sector, are some of the reasons driving increased market demand in this region. Moreover, China’s automotive power modules market held the largest market share, and the Indian automotive power modules market was the fastest-growing market in the North America region.

Leading market players are investing heavily in R&D to expand their product lines, which will help the automotive power modules market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, automotive power modules industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global automotive power modules industry to benefit clients and increase the market sector. In recent years, the automotive power modules industry has offered some of the most significant advantages to medicine. Major players in the automotive power modules market, including NXP Semiconductors (Netherlands), Toshiba Corporation (Japan), Mitsubishi Electric Corporation (Japan), and Rom Semiconductor (Japan) and others, are attempting to increase market demand by investing in R&D operations.

Knorr-Bremse AG is a German manufacturer of braking systems for rail and commercial vehicles with over 110 years of experience. Other items in the Group portfolio include intelligent door systems, control components, rail vehicle air conditioning systems, torsional vibration dampers, and commercial vehicle transmission control systems. The Group's workforce of over 28,000 earned global sales of EUR 6.93 billion in 2019. Georg Knorr founded Knorr-Bremse GmbH in 1905 in Boxhagen-Rummelsburg, Neue Bahnhofstraße, near Berlin (part of Berlin-Friedrichshain since 1920).

It derives its railway brake system production from a company formed in 1883 ("Carpenter & Schulze").  In February 2019,  Knorr-Bremse AG, a German brake system manufacturer, successfully completed the acquisition of Hitachi Automotive Systems Ltd's industrial automobile guidance firm.

Mitsubishi Electric Corporation, founded on January 15, 1921, is a Japanese multinational electronics and electrical equipment manufacturing business based in Tokyo, Japan. It is a fundamental company of Mitsubishi. MELCO goods include elevators and escalators, high-end home appliances, air conditioning, factory automation systems, train systems, electric motors, pumps, semiconductors, digital signage, and satellites. MELCO was formed as a spin-off from the Mitsubishi Group's other key company, Mitsubishi Heavy Industries, formerly Mitsubishi Shipbuilding, after the latter divested a marine electric motor factory in Kobe, Nagasaki. It has since expanded to become a significant electronics manufacturer.

In December 2019, Mitsubishi Electric Corporation purchased the final shares of ICONICS Inc., a software programme firm based in the United States. ICONICS Inc. focuses on analytics, mobile, Internet of Things (IoT), and cloud technologies for the industrial, manufacturing, and building-automation markets.