The transformation of the Automotive Value Chain

Research results on how the automotive transformation will affect industry add

As the consumption of mobility is local by nature, so is the expected adaptation of new technologies and mobility patterns

The automotive transformation will bring more vehicle sales, more value per car, and more business for the automotive value chain – still, there are challenges for OEMs and suppliers as the new analysis from PwC Autofatcs® shows.
To perform the analysis, the analysts split the production costs of a car into seven functional groups and 40 components. The experts then used the PwC Autofacts market model “eascy” to calculate in detail how the added value of the individual components will change over the next few years. 

Download Results, PDF (2,66 MB) 

The electric drive offers almost €15 billion euros in sales potential 

As the shift to electric motors progresses, the conventional powertrain will gradually become less important, contributing about €13.1 billion to the German market in 2030. For comparison, current estimates lie at €15.9 billion with figures topping out at €17.4 billion in 2023. However, an increase in sales of electric powertrain components will more than compensate for these losses. Even today, demand for electric drives generates an additional value of about €1.3 billion. According to PwC‘s analysis, this figure will rise to €14.7 billion by 2030, including the necessary battery storage.

Total Value Add Drivetrain

The value add of total powertrain technologies is calculated on the basis of ongoing cost reductions of conventional components, while electric drivetrain components for BEV and hybrid powertrains create significant additional opportunities.

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New types of mobility require new vehicles – and new components

The research results predict that in 2030 self-driving cars (level 4 and 5) will make up 36% of new registrations in China and 28% in Europe. “Because autonomous driving requires an active chassis with a wide range of compensation functions, a large number of new components will be needed in this area alone,” says Felix Kuhnert. In addition, the entire body must be designed to accommodate the much quieter electric drive – and the fact that in electric cars much less energy is available for heating and air conditioning.

New Car Sales by Autonomous Level

  • Tech will allow level 4/5 adoption from 2028 on
  • Robotaxis with limited use from 2025 on

Thus, for example, the value share of electrical and electronic components such as power supply, sensors and actuators, data connections and computing power will experience massive growth. According to the PwC analysis, the value contribution to the German market alone is set to increase by more than 50 percent from just under €7.0 billion to more than €11 billion – though there are likely to be drastic price drops for individual components.

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Total Value Add – Consolidated Scenario

Main growth areas are in E/E, interior and chassis components, as sensoring and actuation become more important in all areas of the vehicle. Over the mid-term, electric powertrains create on-top growth opportunities.

Many new opportunities will arise in the area of interiors – “after all, we will ‘live’ quite differently in autonomous vehicles than we do today, where we usually sit behind the wheel ourselves,” says Christoph Stürmer. A simple example: in so-called robo-taxis there will be no driver who centrally controls all functions, so all other seats in the car must be equipped with a variety of information and operating functions. Consequently, the interior design segment for the German automotive market could reach just under €10.0 billion in 2030 from its current value contribution of €7.0 billion annually. In this area, in particular, the added value currently resides almost exclusively with the suppliers. It is therefore entirely possible that car manufacturers will soon consider interiors a candidate for in-sourcing strategies.

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Where will things go from here?

“Many medium-sized German suppliers appear to be predestined to occupy these promising sectors due to their business-oriented structures, their high level of procedural and methodological expertise, and their close customer relationships.”

Felix Kuhnert, PwC Global Automotive Leader

However, drastic changes to the business model will be necessary. According to Kuhnert, the fact that the German supplier industry consists of mainly medium-sized companies is by no means a disadvantage.

Management summary

  1. Automobile transformation will not only bring more cars to German streets but also cars with higher-quality technology 
  2. This creates new sales opportunities for German parts suppliers, as the value added could increase from the current €63 billion to around €77 billion in 2030
  3. Increases in sales of electric drives will more than compensate for the losses seen for conventional drives
  4. Great potential also exists for axles, sensors and interiors 

“The auto industry is entering a phase that is so transformative that it requires not just managers but true entrepreneurs to initiate and lead the necessary transition. In that sense, the owner-managed structure of these companies could even be an advantage.”

Felix Kuhnert, PwC Global Automotive Leader

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