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Business News›Industry›Auto›Auto News›Electronics to make up 50-55% of car cost by 2030, signalling major localisation opportunity: BCG-ACMA

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Electronics to make up 50-55% of car cost by 2030, signalling major localisation opportunity: BCG-ACMA
Synopsis

Electronics will form over half of a car's cost by 2030. This presents a significant opportunity for Indian auto component makers. Vehicles are increasingly electronic, requiring new component capabilities. Indian suppliers can build expertise in sensors and control units. This shift offers substantial localization and growth potential for the industry.

ANI

Electronics could account for 50-55 per cent of a car's cost by 2030, up from around 30-35 per cent in 2020, creating a major opportunity for Indian auto component makers to expand into electronic components, according to a BCG-ACMA report.



The report said vehicles are becoming increasingly electronic, whether powered by internal combustion engines or electricity, as features such as advanced driver assistance systems (ADAS), infotainment, sensors and connectivity become more common.



"Every vehicle, whether ICE or electric, is becoming more electronic," the report said, pointing to the rising electronics content as one of the structural changes reshaping the auto component industry.

However, India's electricals and electronics segment accounted for only around 12 per cent of component supply in FY25, leaving considerable scope for domestic suppliers to build capabilities in the segment, it said.



The report identified opportunities across sensors, electronic control units (ECUs), power electronics, ADAS, connectivity and battery management systems (BMS) as rising electronics content creates new component value pools.




"This presents a key localisation opportunity for India," the report said, highlighting the scope for Indian suppliers to capture a larger share of the value generated by the shift towards more electronic vehicles.

The report said the trend towards higher electronics content is part of broader structural changes that are increasing the value of components embedded in vehicles and opening up new areas of growth for the industry.

It noted that premiumization, electrification, rising electronics content and stronger safety requirements are creating new component pools, while exports and localisation are widening the market available to Indian suppliers.



The shift will also require component makers to build capabilities beyond traditional manufacturing, with the report stressing the need for greater investment in technology, engineering and research and development.



"More content and capability inside every vehicle" is increasingly shaping the industry's direction, the report said, adding that each emerging value pool rewards capabilities that traditional component businesses may not have needed earlier.



The report's findings suggest that as electronics become a larger part of vehicle value by 2030, the ability of Indian suppliers to develop and localise these technologies will be an important avenue for future growth.

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