Traction Inverter Market

Global Traction Inverter Market Size (2024 to 2029)

The global traction inverter market size is expected to be valued at USD 12.12 billion in 2024 and reach USD 47.91 billion by 2029, growing at 17.8% from 2024 to 2029.

The growing adoption of silicon carbide (SiC) is fuelling the demand for traction inverters. Companies are replacing their traditional silicon with SiC in inverters. It helps to reduce losses, increases efficiency, and enables higher power densities. The demand is also increasing due to the rising acceptance of electric vehicles. Moreover, 70 percent of the requirement is expected to come from EVs. Also, China is projected to account for around 40 percent market share of the total SiC demand for EV manufacturing.

Global Traction Inverter Market Drivers:

The growing number of advancements in power electronics and the growth of the charging infrastructure are propelling the traction inverter market growth. There is rapid installation of charging stations in both developed and emerging economies, which eliminates a significant obstacle to the adoption of EVs. Moreover, the market for high-performance traction inverters grows in line with the demand for electric cars. This is because charging infrastructure has become widely available and effective.  Strict emission standards are propelling the growth of the traction inverter market. The government rules are forcing companies to shift towards electric propulsion. It wants them to comply with reduced vehicle emissions standards. Thus, the traction inverter market is expanding. Also, many governments are offering incentives like tax breaks or subsidies to promote EV adoption. It further accelerates the shift and amplifies the demand for these inverters. An increase in the demand for electric cars is propelling the traction inverter market growth. EV sales have increased tremendously in China, Europe, and the US. The total number of electric cars globally reached 26 million in 2022, a 60% increase from 2021 due to this growth.

A real-time control MCU is expected to be a potential prospect for companies in the traction inverter market. The demand for MCUs is growing due to the need for a decrease in TI size and weight in EVs. Also, gate drivers are presenting opportunities for boosting market share. The industry has frequently used silicon carbide field-effect transistors (FETs) to increase efficiency. Moreover, many gate drivers integrate circuits to reduce turnon and turnoff energy. It ultimately lowers total switching losses by rapidly turning on and off SiC FETs. The use of smart grid technology is another factor that offers a huge potential to boost market growth. It allows advanced energy management in EVs, which improves the performance of traction inverters. This can also actively adjust to changes in energy needs and variations in real time.

Global Traction Inverter Market Restraints:

The traction inverter market growth is hindered by the range restriction of EVs. This is a significant disadvantage from the customer's point of view. Thus, affecting the acceptance of these vehicles. The TI's energy capacity and efficiency are completely related to the operational range. It is directly impacted by issues in battery technology and energy density. While charging facilities have increased as compared to previous years, they are still insufficient to meet the existing demand. The possibility of being stuck due to a lack of charging stations discourages EV customers. It creates a psychological barrier to wider adoption. Therefore, improvements in battery and traction inverter efficiency must be made with the growth of charging infrastructure to boost the market share.

Design challenges are one of the major challenges in front of the traction inverter market. Many suppliers are not currently offering commercially viable higher-voltage SiC devices at 3.3, 6.5, and 10 kV because of market obstacles. Also, increased development costs limit market growth. This is due to complex design and functionality, material limitations, testing, and validation requirements. Temperature and weight limitations of silicon and copper for semiconductors silicon for semiconductors and copper for windings must be explored for alternatives like SiC to increase efficiency.

Impact of COVID-19 on the global traction inverter market:

The automobile industry was badly affected by the COVID-19. This also impacted the traction inverter market growth. It caused enormous strain on the automotive TI supply and demand. Chinese auto and battery parts and accessories faced considerable export challenges. Lockdowns across the country reduced the demand for traction inverters in passenger automobiles. Furthermore, China's supply shortage caused difficulties for OEM assembly in North America, Europe, and Asia. The US was most affected by the interruption of Chinese car parts shipments and accessories worth US$11 billion. Furthermore, Germany, Mexico, and South Korea also experienced the same issues that hindered their advancements. These factors resulted in several challenges for traction inverter companies. Therefore, it slowed down the market growth rate for traction inverters.

REPORT COVERAGE:

This research report on the global traction inverter market is segmented and sub-segmented into the following categories.  

Global Traction Inverter Market - By Vehicle Type:

• Passenger Cars
• Commercial Vehicles
• Two-Wheelers

The passenger cars segment is expected to move forward with an elevated market growth rate in the coming years. It holds a substantial portion of the traction inverter market. The segment is growing due to the growing demand for electric passenger vehicles. It is driven by advancements in battery technology, government restrictions, and environmental concerns. Meanwhile, the commercial vehicles segment is growing at a slow pace. This is due to the gradual electrification rate, which affected the adoption rate.

Global Traction Inverter Market - By Electric Vehicle Type:

• Battery Electric Vehicles (BEVs)
• Plug-in Hybrid Electric Vehicles (PHEVs)
• Hybrid Electric Vehicles (HEVs)

The battery electric vehicles (BEVs) segment accounts for the maximum market share. It is expanding significantly as manufacturers focus on electric mobility. Rechargeable batteries are the only source of power for electric vehicles. It runs completely on electricity. Moreover, there is a growing market trend towards the need for high-efficiency TI to boost BEV performance, more range, and low charging time. Companies are working on BEV technology to meet the changing demands. They emphasize lightweight, compact designs and integration with modern battery management systems.

Global Traction Inverter Market - By End-User Type:

• Automotive Manufacturers
• Aftermarket Suppliers
• OEMs (Original Equipment Manufacturers)

The automotive manufacturers segment is the largest category of the traction inverter market. They directly influence inverter requirements and establish long-term collaborations with inverter manufacturers for consistent supply. These companies maintain market dominance by improving performance, efficiency, and cost optimization through investments in research and development.

Global Traction Inverter Market – By Region:

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East & Africa

North America holds a substantial share of the traction inverter market. Strong EV adoption and government policies for sustainable transportation are driving the regional market growth rate. Also, large infrastructural investments in EV charging are propelling the demand for TIs. Additionally, the manufacturer's proactive approach to developing EVs is contributing to its dominant position. The market is also propelled by safety concerns; for this, companies are providing features such as enhanced driver aid systems. Furthermore, the need for commercial cars is growing faster. This is due to factors including the development of Amazon's and other e-commerce vehicle fleets along with the increase in logistics and delivery services.

Asia Pacific is projected to achieve a higher market growth rate during the forecast period. The rapid adoption of hybrid and electric vehicles is leading to regional market expansion. The traction inverter market share is also propelled by the strong marketing of EVs by the governments of China, South Korea, and India. They are quickly building a robust ecosystem with supportive policies and initiatives, large charging infrastructure, and partnerships between technology firms and automobile manufacturers. Also, the presence of major traction inverter manufacturers makes it an attractive market.

Europe is experiencing market growth, which is estimated to reach 2.78 billion in 2023. Their stringent emission regulations and rising consumer demand for EVs are taking traction in the inverter market forward. Western Europe has high living standards and a larger GDP. The region's GDP benefited from the car industry's 7 percent contributions. Thus, an increase in EV sales in this area will also drive the market share of traction inverters. In addition, approximately 298 car manufacturing factories were present in Europe. The market for electric cars is rapidly growing. Apart from this, growing fuel prices, a rise in corporate investment, increasing awareness of emission-free transportation, and legal requirements to reduce carbon footprints are propelling the European traction inverter market.

The Middle East and Africa are predicted to propel further at a slower market growth rate. Currently, only a few companies in the Middle East are manufacturing traction inverters for electric vehicles. The regional industry is still in the existence stage when compared to other regions such as Europe and China. However, the increasing development and infrastructure activities in several countries are witnessing a growing demand for commercial vehicles. This is boosting the demand in the MEA traction inverter market.

KEY MARKET PLAYERS:

Siemens AG, Infineon Technologies AG, Continental AG, Robert Bosch GmbH, Delphi Technologies, Hitachi Automotive Systems, Mitsubishi Electric Corporation, Toshiba Corporation, Fuji Electric Co., Ltd., ABB Ltd, Dana Incorporated, Lear Corporation, Texas Instruments Incorporated, STMicroelectronics, ON Semiconductor. Some of the major market players are involved in the global traction inverter market.

RECENT HAPPENINGS IN THE MARKET:

• In September 2023, STMicroelectronics will provide BorgWarner with its new MOSFET dice. It is a 750V silicon carbide (Sic) power for BorgWarner's in-house viper-based power module, which is utilized in the inverter platforms of several present and next Volvo Cars electric cars.
• In April 2023, HybridPACK Drive G2 was introduced by Infineon Technologies Ag. It is a new automotive power module. Moreover, It is based on the HybridPACK Drive G1 concept of the B6 integrated package. This provides power and easy use in addition to scalability in the same footprint.