Electronics to account for 50-55% of car cost by 2030, opening big localisation opportunity for Indian suppliers: BCG-ACMA report

Electronics could account for 50-55% of a car’s total cost by 2030, sharply up from around 30-35% in 2020, creating a significant opportunity for Indian auto component manufacturers to move into higher-value electronic components, according to a BCG-ACMA report.

The report said the increasing electronic content of vehicles is becoming a structural shift across the automobile industry, irrespective of whether vehicles are powered by internal combustion engines (ICE) or electricity. The growing adoption of advanced driver assistance systems (ADAS), infotainment, sensors and connectivity is driving demand for electronic components.

“Every vehicle, whether ICE or electric, is becoming more electronic,” the report said.

However, India’s electricals and electronics segment accounted for only around 12% of component supply in FY25, highlighting the gap between the country’s existing capabilities and the potential value pool emerging from the transition.

Sensors, ECUs, ADAS among emerging value pools

The report identified several areas where Indian suppliers could expand, including sensors, electronic control units (ECUs), power electronics, ADAS, connectivity and battery management systems (BMS).

“This presents a key localisation opportunity for India,” the report said, pointing to the potential for domestic component makers to capture a larger share of the value created by rising electronics content in vehicles.

The report said increasing electronics content is part of a wider transformation in the auto component industry. Premiumisation, electrification, higher electronics content and stronger safety requirements are creating new component value pools, while exports and localisation are expanding the addressable market for Indian suppliers.

Technology, R&D investment critical for suppliers

The shift is also expected to push component manufacturers beyond traditional manufacturing capabilities, requiring greater investment in technology, engineering and research and development.

“More content and capability inside every vehicle” is increasingly shaping the industry’s direction, the report said, adding that emerging value pools are rewarding capabilities that traditional component businesses may not have required earlier.

With electronics expected to constitute up to 55% of vehicle cost by 2030, the report’s findings suggest that developing and localising these technologies could become a key growth avenue for India’s auto component industry.