'Electronics to make up 50% of car cost by 2030'

By 2030, electronics could make up 50-55% of a car's cost, up from 30-35% in 2020, according to a BCG-ACMA report. This increase in electronics content is transforming the auto component industry, creating opportunities for Indian manufacturers, the report adds. Vehicles are becoming more electronic, featuring advanced driver assistance systems, infotainment, sensors, and connectivity, regardless of whether they are powered by internal combustion engines or electricity, the report states.

India's electricals and electronics segment contributed only 12% of component supply in FY25, leaving ample room for domestic suppliers to expand in this area, the report highlights. Opportunities exist in sensors, electronic control units, power electronics, ADAS, connectivity, and battery management systems as rising electronics content creates new component value pools, the report notes.

This trend towards higher electronics content is reshaping the industry, leading to premiumization, electrification, and stronger safety requirements, thereby opening up new growth areas, the report adds. The shift will demand increased investment in technology, engineering, and research and development, the report stresses, emphasizing the importance of building capabilities beyond traditional manufacturing for Indian component makers.