Market Challenges And Opportunities
Global Electric Vehicle Plastics Market- Drivers
- Rising Demand for Lighter Vehicles: As electric vehicles become more mainstream, automakers are under increasing pressure to improve vehicle range and efficiency. Heavier a vehicle is, the more energy it requires to move and the shorter its potential range becomes on a single charge. This has driven automakers to search for ways to lighten electric vehicle designs without compromising safety or performance. Plastics are increasingly viewed as a solution due to their lightweight properties compared to materials such as steel and aluminum. Advanced plastics can be engineered to be just as durable as metals while shaving valuable pounds off a vehicle's overall weight. The lighter the vehicle, the further it can travel on the same battery capacity. Automakers are actively developing new plastic composites and parts to replace heavier materials, especially in non-structural areas like interior trim panels, front-end modules, and cargo storage areas. As electric vehicles continue gaining broader consumer acceptance, reducing weight will remain a high priority for extending vehicle range. This focus on lightweight designs is expected to boost demand for advanced plastics across future electric vehicle platforms. For instance, according to the International Energy Agency's Global EV Outlook 2020 report, EVs will need to become lighter by approximately 190 pounds on average by 2030 in order to meet their projected sales targets and emission reduction goals.
- Improving Battery Performance and Longevity: In addition to weight savings, automakers are interested in plastics for their potential to improve electric vehicle battery pack performance and lifespan. Batteries generate significant heat during operation which can negatively impact efficiency and capacity over time if not properly managed. Plastics can play an important cooling role through custom battery enclosures designed to efficiently dissipate heat. Advanced thermoplastics are also being evaluated as a material for battery cell casings and interconnecting bus bars due to their heat resistance and insulating properties. This control battery temperature fluctuations that cause premature degradation. Using engineered plastics to thermally manage battery systems could allow for smaller, lower-cost packs without compromising driving range or battery health. Plastics are also more resistant to corrosion than other materials commonly used near batteries. Their insulating qualities protect sensitive components from environmental exposure. As automakers optimize electric vehicles for maximum battery life and performance, greater use of plastics in battery cooling and encapsulation is envisioned. For instances, according to the International Energy Agency's Global EV Outlook 2022 report, electric car stock exceeded 16 million vehicles in 2021, representing 10% annual growth compared to 2020, with nearly 70% of all EVs on Chinese roads.
Global Electric Vehicle Plastics Market- Opportunities
- Development of lightweight and reinforced plastics: The development of lightweight and reinforced plastics presents a significant opportunity for growth of electric vehicle plastics market. Plastics that are light yet durable can increase the driving range of EVs by reducing overall vehicle weight. Lighter vehicles result in lower energy consumption, allowing battery packs to last longer between charges. With range anxiety still a top concern amongst many consumers, increased driving distance per charge through lightweight plastics has the potential to accelerate EV adoption rates. For instance, a study conducted by the European Commission Joint Research Centre in 2021 found that fiber-reinforced plastics reduced the weight of an EV's body structure by 20-30% compared to a conventional steel body, without compromising crashworthiness.
- Growing demand for electric vehicles in emerging economies: The growing demand for electric vehicles in emerging economies can unlock significant opportunities for the electric vehicle plastics market. Countries like India, Brazil, Indonesia and others are increasingly focusing on promoting electric mobility to reduce emissions. With rising incomes and awareness, car ownership is growing rapidly in these markets which are traditionally overlooked by global automakers. As environmental regulations tighten and consumers get more environment conscious, electric vehicles are expected to make deeper inroads here over the next 5-10 years. This surge in electric vehicle adoption in emerging economies will boost demand for plastics used in manufacturing various EV components. Electric vehicles use more plastics than conventional vehicles since plastics help to reduce vehicle weight and boost efficiency. Plastic parts are widely utilized in EV batteries, electronic components, interiors, exteriors and under-the-hood systems. For example, a typical electric vehicle contains around 110 kg of plastics mostly used in the battery casing and cooling system. The plastic casing protects and insulates the heavy battery from extreme temperatures and physical damage For instance, according to International Energy Agency's Global EV Outlook, in 2021, the average lithium-ion battery pack currently weighs around 400-500 kg and plastics play a vital role is safe housing of these heavy-duty batteries.
Global Electric Vehicle Plastics Market- Restraints
- Availability of substitutes: The availability of substitutes is significantly restraining the growth of the electric vehicle plastics market. There are several alternative materials that automakers can utilize instead of plastics to manufacture various components of electric vehicles. Metals provide a strong substitute given their high strength and durability. Automakers are increasingly adopting aluminum alloys and advanced high-strength steels to make structural parts and body panels of electric vehicles. These materials allow manufacturers to reduce vehicle weight and improve performance attributes like power-to-weight ratio. Lighter vehicles result in increased range per charge, making them more appealing to environment-conscious customers.
- Counterbalance- The development of lighter or more environmentally friendly materials, such as advanced composites or biodegradable polymers, could provide alternatives to traditional plastics used in EVs.
- Volatility in raw material prices: Volatility in raw material prices such as oil, polyethylene and carbon fiber has emerged as a major challenge for the growth of the electric vehicle plastics market. Plastics and polymers account for a significant portion of materials used in EVs, ranging from 15-30% by weight depending on the vehicle model. Battery packs and electronic components need protective casings made of plastics, while lighter composite materials are gaining prominence for interior and exterior body panels to increase driving range.
Figure 2. Global Electric Vehicle Plastics Market Share (%), By Vehicle Type, 2024
Restraints & Challenges:
- Availability of substitutes
- Volatility in raw material prices
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