Electronics Set to Account for 50-55% of Car Costs by 2030, Highlighting Significant Localisation Opportunities, According to BCG-ACMA Report.

A recent BCG-ACMA report indicates that electronics could constitute 50-55% of a vehicle’s cost by 2030, rising from 30-35% in 2020. This transformation is driven by the increasing prevalence of advanced technologies such as advanced driver assistance systems (ADAS), infotainment, and connectivity, which are becoming essential features in both internal combustion engine (ICE) and electric vehicles. Currently, India’s electrical and electronics segment represents only about 12% of the auto component supply in FY25, highlighting a significant opportunity for domestic manufacturers to enhance their capabilities in this domain.

For the average consumer, this transition signifies a future where vehicles may be more technologically advanced yet potentially more expensive due to the high cost of electronic components. For the automotive market, this shift could spur competition among suppliers to innovate and localize production, thereby creating greater value within the domestic economy. As auto manufacturers increasingly focus on incorporating electronics into their vehicles, the demands on both consumers and the market to adapt to this evolution will also heighten, likely affecting pricing and availability of certain vehicle models.

In the long-term, the Indian government and the RBI may need to consider policies that facilitate investment in technology and capabilities within the electronic components sector. Support in the form of tax incentives, research funding, and partnerships between industry and academia will be vital for developing the necessary skills and infrastructure. As the market shifts toward greater electronics integration, fostering a robust ecosystem for local suppliers will be crucial for India’s ambition to become a leader in the global automotive supply chain by 2030.

Source: The Hindu

(Expert Note: This report was independently prepared by the Wealthova Economy team.)