The global wiring harnesses and connectors for electric vehicles market was valued at USD 2.99 billion in 2022. It is estimated to reach USD 19.79 billion by 2031, growing at a CAGR of 23.37% during the forecast period (2023–2031).
A wiring harness is a logical arrangement of wires, terminals, and connections throughout a vehicle that transmit data and electrical power, connecting various components. Through this fragile network, information and power are transferred. Wiring harnesses remain one of the most crucial components of any vehicle as they comprise one of the vehicle's heaviest and most expensive parts. In addition, these are usually customized based on a car's model and requirements; the cable system is tailor-made to optimize the vehicular model as much as possible.
The wiring system is usually divided into high-voltage electric wire harnesses and low-voltage electric wire harnesses. The high-voltage harness is used for the battery connections as they require additional expensive high-voltage lines for AC-DC charging, high-voltage batteries, traction, and special wiring for the main battery and the battery management system. Low voltage harnesses are usually used in the sensory framework of the car and doors. These low-voltage harnesses also make up the dashboard and infotainment system of the vehicle.
Electric vehicles are a key solution toward climate change as transportation fuels like petrol, diesel, and coke are responsible for carbon emissions. Conventional vehicles have been used for decades and have limited fuel resources. Oil prices are increasing day by day. Major vehicle manufacturers are introducing EV ranges to meet demand and make affordable vehicles to replace combustion engine vehicles. Electric vehicles can significantly reduce the emission of greenhouse gases. Consumers' preference for EVs because of affordability, less fuel cost, and environmental responsibility is increasing the demand for EVs. With increasing EV demand, wiring harnesses and connectors for the electric vehicle market have seen significant development. Therefore, worldwide EV adoption would boost market growth, especially as an electric vehicle needs three times as many wires as a conventional ICE vehicle. Furthermore, the expansion of EV infrastructure would provide further demand.
Automotive active safety is a protective system that aids drivers in maintaining control of their vehicles, preventing or reducing traffic accidents, and improving their driving experience. The rise in consumer safety concerns and government-sponsored safety programs has increased the demand for trustworthy connectors in numerous vehicle systems. For example, car safety systems such as seatbelts, airbags, and brakes require a connection system with a retainer and a safety restraint system connector. As a result, the rising demand for vehicle safety systems directly impacts the need for wiring harnesses and connectors for electric vehicles, propelling the market expansion.
A recovery in global economic activity following a COVID-19 pandemic-induced recession, major stimulus packages in the U.S., and an increase in the use of green mobility (electric cars) have all contributed to the rise in demand for the industrial metal copper. Copper's widespread industrial use allows us to gauge the health of a nation's economy, and rising copper prices, according to analysts, indicate that the global economy is improving.
Most OEMs use copper as their prime metal choice to manufacture wiring harnesses owing to its flexibility and ease of molding. Moreover, the amount of copper used in an EV is two times that used in a traditional vehicle. Therefore, copper prices in the future are bound to ramp up, which would hinder the growth of the wiring harnesses and connectors market for EVs.
In line with the power increase of the HEVs, PHEVs, and BEVs, a larger current is required, which has led to the expansion of the cross-section section of the wires. In consequence, wire weight gain is becoming an issue with EV manufacturers. The wire weight decrease is necessary to enhance the range of electric vehicles. Therefore, companies can use bulk aluminum wire to overcome these difficulties.
The aluminum wire for the cable harness protected by the tube requires flexibility for durable vibration and high-power conductivity. The weight gain problems brought on by using thicker copper wires can be resolved with the new aluminum material that satisfies both requirements. Moreover, the aluminum wire has a more significant temperature working range, making it all the more suitable for electric vehicles. Such factors create opportunities for the market's growth.
The global wiring harnesses and connectors for electric vehicles market is bifurcated into vehicle type, propulsion type, product type, material type, component, and application.
Based on vehicle type, the global wiring harnesses and connectors for electric vehicles market is divided into passenger and commercial vehicles.
The passenger segment accounts for the largest market share and is anticipated to grow at a CAGR of 22.29% over the forecast period. According to ACEA, the world output of passenger cars amounted to 79.3 million units in 2019, of which nearly 1% were BEVs and 6% were HEVs and PHEVs. Passenger vehicles generally have more features than their commercial counterparts, such as luxury amenities; therefore, they employ additional wiring harnesses than commercial vehicles in the context of the wiring harnesses used. It uses more aluminum wiring harnesses, and optical fiber wiring harnesses.
Based on propulsion type, the global wiring harnesses and connectors for electric vehicles market is bifurcated into BEV, PHEV, and HEV.
The BEV segment dominates the global market and is projected to grow at a CAGR of 28.01% over the forecast period. The battery electric vehicle is a type of electric vehicle that uses chemical energy stored in rechargeable battery packs with no secondary source of propulsion. BEVs differ from most other automobiles because they lack internal combustion engines. These vehicles run entirely on battery power rather than the fuel. Drivers can recharge them at home using Level 1 or Level 2 EV chargers or commercial charging stations using more powerful chargers (Level 3).
Based on product type, the global wiring harnesses and connectors for electric vehicles market is divided into high voltage and low voltage.
The low voltage segment is the most significant contributor to the market and is estimated to exhibit a CAGR of 22.00% during the forecast period. Low-voltage wiring harnesses operate below the voltage level of 50V. They are conventionally used in traditional vehicles for various applications such as engines, seats, doors, HVAC, infotainment, lighting systems, and power windows. They are usually connected to the auxiliary battery in an EV which is responsible for all the supporting functions in a car. They form the complete ecosystem of wiring harnesses in an electric vehicle with high-voltage wires.
Based on material type, the global wiring harnesses and connectors for electric vehicles market is divided into copper, aluminum, and optical fiber.
The copper segment accounts for the highest market share and is estimated to grow at a CAGR of 22.74% over the forecast period. Copper is commonly used in wire harnesses due to its excellent conductivity, flexibility, and dependability. Copper's use is supported by the continued shrinking of gauges. Increasing the number of electric and hybrid automobiles, which require more copper per vehicle, boosts overall demand. Copper, instead of aluminum, can be employed in thinner gauge applications due to its intrinsic characteristics. Copper is easier to work with than aluminum when manufacturing and assembling packed wire harnesses.
Based on components, the global wiring harnesses and connectors for electric vehicles market is divided into wires, connectors, and others.
The wires segment is the largest contributor to the market and is anticipated to exhibit a CAGR of 23.73% over the forecast period. New-age electric vehicles feature wires and cables, which combine with other components to form wiring harnesses. These wires conduct the current and data to give rise to a properly functioning electric vehicle. These wires run all along the vehicle and are generally made of copper. However, these wires are readily replaced with aluminum wires in EVs to facilitate light weighting for better range and economy.
Based on application, the global wiring harnesses and connectors for electric vehicles market is bifurcated into a body harness, high voltage battery harness, dashboard/cabin harness, HVAC harness, and others.
The high-voltage battery harness segment owns the market and is predicted to grow at a CAGR of 25.41% over the forecast period. A high-voltage battery, inverter, and motor are the core electronic powertrain of a battery electric vehicle (BEV), hybrid electric vehicle (HEV), and plug-in electric vehicle (PHEV). They are connected to the power transfer through high-voltage wires. This high-voltage cable linking the battery and inverter is termed a cable harness with a rather lengthy wire length. As the adoption of EVs is increasing, the usage of high-voltage battery harnesses is also seeing a surge in demand.
China Dominates the Global Market
Based on region, the global wiring harnesses and connectors for electric vehicles market is bifurcated into North America, Europe, the U.K., China, Asia-Pacific and Japan, and Rest-of-the-World.
China is the most significant global wiring harnesses and connectors for electric vehicles market shareholder and is expected to grow at a CAGR of 30.23% over the forecast period. China is rich in raw materials that are required for the production of wiring harnesses. The country is the third-largest producer of copper and the second-largest producer of bauxite ore from which aluminum is extracted. Copper and aluminum are the most utilized materials in manufacturing wiring harnesses for electric vehicles. As more handmade car components are generally bought, domestic wire harness manufacturers have acquired much experience working with small manufacturers. They are now extending their wiring harness technology to world-renowned car manufacturers with their quick and efficient services and dependable services goods. For instance, THB Group, Shenzhen Deren Electronics Co., Ltd., and Shanghai Jinting Automobile Harness Co., Ltd. are a few local companies gaining the upper hand in the country compared to global companies. Moreover, multinational wire harness manufacturers are deploying prospective Chinese markets to acquire or develop owned or joint ventures with local firms to promote co-funded car facilities and home-grown automobiles.
Asia-Pacific and Japan are anticipated to exhibit a CAGR of 16.98% over the forecast period. Asia-Pacific and Japan have regions that are abundant in natural mineral reserves. Countries like India, Australia, New Zealand, and Indonesia have ample aluminum and copper ores resources, the basic raw materials required to produce wiring harnesses. The wiring harness is 95% manufactured using hand and is labor-intensive. In addition, Asia-Pacific and Japan are still developing countries; as a result, the labor rates are relatively cheap in these regions. Hence, wiring harness manufacturers can lay down their production facilities in the region for better profitability and market expansion. However, numerous countries such as India, Malaysia, Thailand, and Indonesia need better infrastructure to support the quick adoption of electric vehicles. This has hampered the Asia-Pacific and Japan region companies from adopting advanced wiring harnessing manufacturing techniques.
In North America, aligning stringent emission regulations for Canada and Mexico with the U.S. in the automotive segment helps promote the region's uptake of electric vehicles. Moreover, rising concerns about reducing greenhouse gas emissions due to increased government initiatives are expected to drive the wiring harness market by helping transition from ICE vehicles to electric vehicles. As the North American region has a stable GDP and high disposable income, the labor rates in the U.S. and Canada are relatively higher than the developing countries. Therefore, it is not highly profitable for wiring manufacturers to set up production facilities in these regions as wiring harnesses are labor-intensive.
Various EV OEMs in the European region are globally leading players in the automotive industry. They are co-developing EVs and autonomous technologies and also conjugating them to have autonomous electric vehicles. Therefore, these innovations require further use of wiring harness applications. They are more likely to demand wiring harnesses from local suppliers in bulk for their R&D in such technological advancements apart from the usual requirement of these harnesses in their vehicle's production. In addition, fast charges are being established in Europe more quickly than slow charges. Fast chargers use high voltage wiring harnesses thicker in structure to withstand the high current flow. These require special skills and can be leveraged by local wiring harness manufacturers, thereby driving the regional market growth.
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