New-Japan Business Consulting
Business strategy reports, business matching and M&A in Japan


Inverter competition as key to BEV control and efficiency. Electric vehicle component supply chain and competitive landscape

The global automotive industry is becoming increasingly electrified, but in-car battery prices remain high, contrary to initial forecasts. In addition, the cost of key components such as drive motors and inverters is also rising due to material shortages, supply chain issues, compliance with the US Inflation-Reduction Act (IRA) and tighter national environmental regulations. Against this backdrop, the key to the electrification race is how to improve performance, including efficiency, while keeping BEV production costs low. In order to extend the range of BEVs (or reduce product costs by reducing on-board battery capacity), companies are working on improving on-board battery technology, reducing vehicle weight, as well as improving eAxle efficiency control and inverter technology, which is responsible for the overall energy efficiency of on-board equipment. Among other things, the efficient conversion of battery energy into kinetic energy through the switch from Si to SiC in the power module chip at the heart of the inverter. There is a clear trend towards the integration of DC-DC converters, on-board battery chargers (OBCs), high-voltage relays and other components into the inverter, known as ‘x in 1’.

BEVs and software-defined vehicles (SDVs) are beginning to spread rapidly as a result of the financial easing measures put in place at the time by governments in response to the COVID-19 pandemic in 2020, which enriched start-up companies worldwide. Meanwhile, the protracted semiconductor shortage and the Russian invasion of Ukraine in 2022 have driven up energy and material prices and disrupted the automotive supply chain.

Before the pandemic, there were still optimistic forecasts for ‘below $100/kWh’ and ‘fully automated driving’, but the majority are now pessimistic about both
The electric vehicle component supply chain and the competitive landscape is focused on ‘inverters’. As with the first article in the series ‘Drive motors’, we will investigate and analyse the related component industry, including the business development and competitive situation of Tier 1 and Tier 2/3 suppliers for key components such as inverters, power modules, smoothing capacitors, reactors, DC-DC converters, heat sinks and so on.

The report provides basic information essential for the formulation of electrification business strategies for automobile manufacturers, automotive parts and materials manufacturers, as well as acquires industry information related to demand forecasts and decision-making materials, conducts surveys of internal and external literature on the xEV inverter industry and related component industries and direct interviews with industry players, etc., and reports on industry challenges and future development directions. The challenges and future development directions of the industry are reported.