Electric Vehicle Insulation Market (2020 - 2027)

Electric Vehicle Insulation Market Summary

The global electric vehicle insulation market size was estimated at USD 1.3 billion in 2019 and is projected to reach USD 5.4 billion by 2027, growing at a CAGR of 19.5% from 2020 to 2027. Favorable government initiatives to promote the use of green vehicles is expected to drive market growth over the forecast period.

Moreover, an increase in demand for battery-operated EVs, which can be attributed to stringent government regulations regarding vehicle emissions, will also drive the market. Governments across the globe are providing subsidies to increase the adoption of electric vehicles, as it reduces oil consumption and pollution. China accounted for the largest market share in 2019 and is expected to continue the trend over the forecast period. The country is expected to witness high growth in production as well as sales, owing to the favorable regulations by the government in an attempt to reduce its reliance on oil imports.

The market has witnessed an excessive amount of forward-integration as the raw material suppliers have opted for forward-integration to manufacture insulation products. The companies opt for captive consumption to reduce their manufacturing cost. This enables the companies to expand their scope of operation and enter new application markets.

Growing awareness regarding vehicle safety, coupled with high demand for improved energy efficiency and acoustic insulation is expected to have a positive impact on market growth. However, high cost related to advanced insulation material is predicted to hinder the product demand over the forecast period.

The market is largely dominated by major corporations with high integration throughout the value chain. The market is highly price-sensitive and price wars among companies are common. The market is moving towards consolidation, with large firms taking over the overseas factories to expand in regions exhibiting high growth potential.

Material Insights

Foamed plastics led the market and accounted for more than 58% share of the global revenue in 2019. Foamed plastic insulation is extremely lightweight and exhibits superior impact resistance properties. Furthermore, the use of compression pads made from foamed plastics to reduce the vibration and shock on the battery components is having a favorable impact on the market.

Plastic packs are witnessing growing adoption in the insulation of vehicle battery packs owing to their dielectric property that prevents arcing between battery cells and the ability to act as a heat sink and not transfer heat to adjacent battery cells. In addition, the foamed plastic insulation materials exhibit superior reliability under the harsh automotive environment.

The U.S. Environmental Protection Agency (US EPA) has put stringent restrictions on the use and disposal of foamed plastic owing to their non-biodegradability. Furthermore, the growing awareness pertaining to the environmental hazards caused due to improper disposal of foamed plastics is expected to have a negative impact on the segment growth over the forecast period.

The demand for thermal interface materials is expected to register a significant CAGR of 20.4% over the forecast period. Growing product utilization in the battery pack management systems owing to its superior thermal conductivity, low viscosity, and ability to maintain insulating properties at high temperatures are anticipated to fuel the segment growth.

Product Insights

Electrical insulation led the market and accounted for more than 50% share of the global revenue in 2019. The segment is estimated to expand further at the fastest CAGR from 2020 to 2027. The thermal product segment is projected to account for the second-highest market share by 2027 due to the rising demand for thermal insulation materials in the battery pack management. Moreover, product utilization in retaining the interior temperature of the vehicle is having a positive impact on market growth.

Advancements in battery technology have led to the development of higher battery capacities that are suitable for long-range vehicles. However, these newer types of batteries tend to generate more heat, which may affect battery performance and reduce the vehicle range. Thus, EV manufacturers are giving utmost importance to the use of top-quality thermal insulation.

Acoustic insulation is anticipated to be the 2nd fastest-growing segment over the forecast period owing to the growing focus on reducing the ambient noise of EVs. Furthermore, the implementation of strict vehicle noise pollution norms is expected to propel the product demand. Thus, the manufacturers are making significant investments in the development of highly efficient acoustic insulation materials without increasing the overall weight of the vehicle.

Application Insights

Under the hood & battery pack application segment led the market and accounted for more than 43% share of the global revenue in 2019. Ever-increasing product utilization for insulating a variety of vehicle components, such as battery packs and electric motor, is projected to boost the segment growth.

Battery packs based on lithium-ion technology have a narrow window of operating temperature. The wide fluctuations in battery temperatures cause an adverse impact on the battery performance and reduce battery life, and vehicle range. Mica and mica-based insulation are some of the most widely used materials for the thermal management of electric car batteries.

The interior application segment is anticipated to register the second-fastest CAGR of 19.4% over the projected period. The growing use of thermal and acoustic insulation for improving passenger comfort as well as reduce the vehicle noise and vibrations within the vehicle interior. The anticipated launch of various EV models is expected to boost product demand.

The other segment includes the insulation of power electronics among others. The higher ambient temperature around the power electronics used in the EVs may cause them malfunction and result in permanent damage to the vehicle. Thus, manufacturers are using insulating materials with superior insulation properties for protecting the power electronic components.

End-use Insights

The Hybrid Electric Vehicle (HEV) segment led the market and accounted for more than 53% share of the global revenue in 2019. Growing demand for environmentally friendly, fuel-efficient cars is driving the segment growth. In addition, the growing regulatory support for the adoption of hybrid cars is further expected to boost the market growth over the forecast period.

The HEVs are powered by a traditional Internal Combustion Engine (ICE) coupled with an electric motor. A hybrid vehicle is charged through regenerative braking instead of being plugged in to charge the battery. As a result, these vehicles demonstrate a superior fuel economy than that of traditional ICE vehicles.

The Battery Electric Vehicle (BEV) segment is anticipated to register the fastest CAGR of 22.6% over the forecast period. Growing demand for EVs, rising investments in the development of newer vehicle models, and improvements in battery technology are expected to drive the segment growth.

The Plug-in-Hybrid Vehicles (PHEVs) primarily run on electric power and automatically switch to an ICE when the battery is depleted. The segment is expected to grow at a robust pace over the forecast period owing to its superior fuel economy and comparatively low environmental impact.

Regional Insights

The Asia Pacific region dominated the market and accounted for over 57% share of global revenue in 2019. The region is witnessing an exponential demand for EVs on account of growing regulatory support and rising emphasis on reducing the Greenhouse Gas (GHG) emission from vehicular sources.

The North America region is expected to grow at a significant CAGR over the forecast period due to the presence of one of the world’s largest EV manufacturers, Tesla Inc. Furthermore, incentives and rebates provided by the governments in various countries are expected to boost the demand for EVs.

The European region is at the forefront in the adoption of various EV technologies, such as BEV, PHEV, and HEV. Thus, the product demand in the region stood at USD 246.7 million in 2019 and is expected to grow at a CAGR of 15.5% over the forecast period.

The constituent countries of the European Union are actively promoting the adoption of EVs. For instance, 20 EU member states out of 28 offer various incentives, such as bonus payments and premiums to buyers of EVs. Thus, the rising adoption of electric vehicles is expected to boost market growth in the region.

Key Companies & Market Share Insights

The presence of a large number of manufacturers in the market on account of the growing demand for EV insulation across North America, Europe, and the Asia Pacific regions is estimated to strengthen the market competition. In addition, the companies are focusing on developing tailor-made insulation solutions for vehicle manufacturers, thereby intensifying the competition. Companies are making significant investments in R&D for the development of hybrid insulation products, thereby resulting in dynamic market conditions. They are also focusing on enhancing product performance and durability. Some of the prominent players in the electric vehicle insulation market include:

• Saint-Gobain

• Parker Hannifin Corp

• Elkem Silicones

• Knauf Industries

• BASF SE

• Zotefoams Plc

• 3M

• Elmelin Ltd.

• Pyrophobic Systems Ltd.

• Morgan Advanced Materials

Electric Vehicle Insulation Market