Electronics Responsible For 40 Percent Of New Vehicle’s Price

The exponential growth is expected to slow down in the coming years though. Computing technology

The exponential growth is expected to slow down in the coming years though.

Computing technology has made such a significant impact on the automotive industry through the last few decades. In a very simple explanation, it allowed us to have all the electronic safety and assist systems, plus the modern infotainment systems onboard our vehicles. It also made our cars safer, faster, more efficient, and even better looking, if you consider the current lighting technology.

A very comprehensive analysis from Deloitte, brought to our attention by Car and Driver, even estimates that electronics now account for approximately 40 percent of the price of a new car. For a comparison, just 20 years ago, when fuel injection systems, ABS, and ESP were already the norm, that portion was just 18 percent.

Studying The Automotive Industry:

“Semiconductor vendors play a critical role in the automotive industry supply chain,” Deloitte analysis explains. “In the classic automotive ecosystem, semiconductor vendors sell to Tier 1 electronic systems vendors, which then integrate technology into modules and send these to the automaker (OEM) for assembly. In recent years, the automotive industry has been undergoing massive transformations that will reinvent the entire ecosystem for years to come.”

Deloitte also calculates that the cost of the components that make up electronic systems in vehicles has grown from $312 per car in 2013 to around $400 today. By 2022, this figure is expected to reach close to $600 per car but that’s where the exponential growth is expected to slow down as computer components measured in nanometers are close to reaching their physical limits.

“Advances in technology such as AI, electric vehicles (EVs), autonomous driving, energy storage, and cyber security; social awareness of topics such as safety and ride-sharing; environmental concerns like pollution; and economic considerations including infrastructure spending and growth in Asian markets are all set to reshape the automotive industry,” Deloitte’s analysis concludes.

Source: Car and Driver, Deloitte