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More firms want a slice of auto electronics market

From being a niche product only a few years ago, electric vehicles are now deemed to be the future of the automotive industry. Numerous vehicle manufacturers already offer hybrid electric vehicles and many have plans to introduce battery electric vehicles. Governments around the world are investing money to support development efforts. As a result, a fierce battle is raging as suppliers fight for a piece of the action.

An upcoming report from IMS Research finds that it is not just traditional Tier 1 automotive suppliers that are involved in this market. Many other companies are active in the supply chain. For example, Valence Technologies, A123 Systems and LG Chem all have agreements to supply Li-ion batteries for major electric vehicle programs. AC Propulsion and UQM Technologies both offer traction motors.

This is not to say that the traditional Tier 1 suppliers aren't involved in the market. Continental, for example, supplies both Li-ion batteries and traction motors, as well as a range of other systems used in electric vehicles like DC/DC converters and inverters. It seems that Tier 1 suppliers like Continental are positioning themselves as "one-stop shops". In other words, suppliers that can offer complete electric vehicle powertrain solutions.

According to report author, Jon Cropley, "The supply chain will change greatly in the future. Vehicle manufacturers have the option of sourcing electric vehicle powertrain systems from a single supplier or from a number of suppliers. They also have the option of developing their own systems or even acquiring companies that already make them. This is a market in an early stage of growth. We should expect big changes."

A number of findings from the report underline just how immature the market is. For instance, less than 600,000 hybrid electric vehicles were produced in 2008 and this equates to only around 1 percent of all vehicle production worldwide. Also, less than 25,000 plug-in hybrids and battery electric vehicles are forecast to be produced in 2009.

Despite this, significant growth in production volumes is expected. IMS Research forecasts that over 13 million electric vehicles (either hybrids, plug-in hybrids, battery electric or fuel cell vehicles) will be produced in 2020. This offers a substantial opportunity for the companies supplying systems and semiconductors for these vehicles.

 

 
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