Beyond EVs: The Growing Importance of Automotive Electronics in Modern Vehicles

For a decade, the automotive industry has argued about powertrains. Meanwhile, a quieter shift has been rewriting what a vehicle actually is. Electronics, not electrification alone, now decide how a car is engineered, priced and experienced. In 2000, electronics were just 18 per cent of a new car's cost.

By 2030, Deloitte estimates, they will make up nearly half. The supply side, on the other hand, is also working to keep pace. PwC projects the global semiconductor market will cross USD 1 trillion by 2030, with automotive as its second-fastest-growing segment, behind only AI servers.

Here, one detail matters most. PwC expects EVs to reach only about half of global sales by 2030. The other half will still run on fuel and will keep becoming more electronic. What multiplies electronic content is not the powertrain but intelligence. Chip content per vehicle rises tenfold, from under USD 500 with basic driver assistance to over USD 5,000 at higher autonomy.

Vehicle electronics, in short, is every vehicle's story.

India Reaches an Electronic Inflection

India's component industry just had its best year ever. ACMA's FY2025-26 review reports a turnover of Rs 7.60 lakh crore (USD 85.9 billion), up 12.7 per cent and double its size five years ago. The trade data hides the more telling number.

Exports grew 5 per cent while imports jumped 13 per cent to USD 25.4 billion, producing a USD 1.37 billion trade deficit, India's first in three years. Look at what crosses the border. India exports engine, transmission and steering parts. It imports advanced technology components.

Put simply, India exports the vehicle's mechanical past and imports its electronic future. Closing that gap is now a funded government policy. The auto PLI scheme has drawn ₹ 35,657 crore, the Electronics Components Manufacturing Scheme has a ₹40,000 crore outlay, and Semiconductor Mission 2.0 targets domestic chip capability.

The goal is official too. IBEF, a Ministry of Commerce trust, projects a USD 200 billion component industry by 2030, with electronics already accounting for 11 per cent of OEM supplies. One figure stands out. EV-specific parts were just 4.6 per cent of OEM supplies in FY26.

The electronic build-up is happening in every vehicle, whatever powers it. That is why the opportunity is far bigger than the EV debate.

The Cabin Is the New Competitive Arena

Buyers no longer compare a car with other cars. They compare it with their phone.

Connected infotainment, parking cameras, fast charging and clean cabin air have moved from luxury to expectation, and now into regulation. Regulation turns electronics from a selling point into a requirement.

Bharat NCAP, the government's official star-rating programme, scores cars on safety-assist technology, while AIS-140 has made telematics standard in commercial fleets. Once a feature becomes a star on a label, it stops being optional. The supplier who localises it first wins the volume. Indian conditions add their own demands.

Polluted air makes cabin purification a health feature. Indian roads make tyre safety and roadside self-reliance real engineering challenges. The opportunity extends past the showroom too. The aftermarket grew 9 per cent to USD 12.3 billion, serving the millions of vehicles already on the road.

From Innovation to Automation

The winners will share a profile. They will run R&D in India, because Indian heat, dust and price points punish products designed elsewhere. They will meet global quality standards and build affordable products that last. They will co-develop with OEMs, as suppliers are integrated into a vehicle years before purchase orders are placed.

Their journey runs from innovation to automation. While EVs dominate the headlines, the data reveals a more profound narrative. An industry doubled in five years. Electronics are nearing half the cost of a car.

The trade deficit maps exactly onto what India has yet to localise. Every vehicle leaving an Indian plant is becoming an electronics product. The industry that understands these trends first will not just supply the future vehicle. It will define it.

Pavan Puri is the Founder of Greencore Electronics. All views expressed are the author's own.