EVs Emerge as Bright Spot to Keep Economies Running during COVID-19 Pandemic
The automotive industry has been worst hit due to the COVID-19 pandemic. It is anticipated that the industry will be taking as long as four years minimum to fully recover and run as per normal business practices. Such predictions are creating challenges for stakeholders in the automotive AC compressor market.
Companies in the automotive AC compressor market are adopting the plug and play mode to adapt to slow growth in the overall industry. The volatile demand and supply has compelled car makers to increase their focus in electric vehicles (EVs), since consumers have become conscious about their spending and aiming for long-term investment to own various goods and commodities.
automotive ac compressor market segmentation
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Automatic Climate Control Decreases Load on AC Compressors, Betters Mileage
The automotive AC compressor market is slated to clock a sluggish CAGR of ~3% during the forecast period. This is evident since AC compressors are often prone to common symptoms such as high cabin temperature, loud noises, and leaking fluid, which might damage the car engine. Such issues could lead to increased insurance costs and inhibit growth of the overall market. Hence, manufacturers are increasing their production capabilities to incorporate automatic climate control feature in automotive AC compressors to decrease the load on the compressor.
Less operation of AC compressors with the help of automatic climate control plays an instrumental role to better the mileage of cars.
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Electric Compressors Help Reduce Temperature of Lithium-ion Batteries in EVs
The proliferation of electromobility is signaling that AC compressors are being operated electrically. SCHOTT, a company in the automotive AC compressor market, is taking advantage of this opportunity to develop optimum electric compressor feedthroughs for both high voltage and 48V operations. Manufacturers are increasing their production capabilities in copper conductors for high current and additional insulation by means of special synthetic elastomer meant for high voltage applications.
Apart from the U.S. and Europe, experts in the automotive AC compressor market are expecting high growth rates of electric compressors (e-compressors) in India. The issue of high temperature in lithium-ion batteries for EVs is being solved by battery-powered compressors.
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E-compressors Offer Future Scope for Shorter Charging Times in EVs
Manufacturers in the automotive AC compressor market are boosting their production capabilities in e-compressors. Vehicle technology provider Mahle is investing in R&D for e-compressors that not only cool the vehicle cabin but also the battery used in vehicles. E-compressors are gaining importance if an AC system fails to function, the electric and hybrid vehicles cannot operate due to safety risk posed as a result of battery overheating.
Rising fuel prices in India is encouraging people to opt for electric and hybrid vehicles. Such trends are translating into business opportunities for companies in the automotive AC compressor market. Compressors are playing a crucial role in battery thermal management and extending range & maintenance of battery life, whilst increasing scope for shorter charging times in the future.
Anticipated Ban on Diesel Engines in Europe Gives Rise to E-compressor Production
Voltage, performance, and displacement are important factors to take into consideration while determining the correct electric compressor for off-road vehicles. Evolving regulations are driving many people to embrace electric and hybrid vehicles. It has been found that European countries are expected to impose a ban on diesel engines by 2025. Such trends are contributing toward the expansion of the Europe automotive AC compressor market in the EV segment.
Although the upfront cost of electric vehicles might be high, long-term investment in EVs show improved efficiency, comfort, and low total cost of operation. Hence, companies are bolstering their manufacturing capabilities for e-compressors that suit electric and hybrid vehicles.
Hydrogen a Realistic Alternative to Fossil Fuel-based Vehicles
Current technologies and performances of hydrogen compression for stationary and automotive applications are acting as key drivers for the automotive AC compressor market. Hydrogen is posing as a game changer in making vehicles emission-less, and contributes toward sustainable development of the global automotive industry. This is evident since hydrogen is one of the most abundant elements available and virtually present everywhere, thus serving as a never-ending source of energy.
Hydrogen can be directly converted into electric energy using fuel cells without producing toxic gases. Moreover, it can be produced using renewable sources including biomass, solar, and wind energies, thus reducing the carbon footprint in the environment. However, several issues related to the shortage and delivery of hydrogen for both stationary and automotive applications are causing an impediment in market growth. As such, innovations in mechanical compressors such as reciprocating & ionic liquid compressors and non-mechanical technologies including electrochemical and adsorption compressors for hydrogen applications are increasing market scope. Thus, hydrogen tech is emerging as a realistic alternative to traditional fossil fuel-based vehicles in the automotive AC compressor market.
Improvements in Lubricants, Awareness about Compressor Maintenance Benefits Car Companies
Complimenting factors such as improvements in lubricants for reciprocating compressors and rotary screw compressors are boosting growth of the automotive AC compressor market. Reciprocating compressors are estimated to dominate a higher revenue share as compared to rotary compressors during the forecast period. Since automotive AC compressors are susceptible to several issues including fault in working of the compressor clutch, OEMs and stakeholders in aftermarkets are increasing awareness about condenser cleaning to avoid costly compressor and engine repair.
E-compressors are emerging as a new sensation in the automotive AC compressor market. These compressors in hybrid and all-electric vehicles are enabling long distance travel under electric power.
automotive ac compressor market infographic
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Automotive AC Compressor Market: Overview
The global automotive AC compressor market was valued at US$ 22.6 Bn in 2024. It is estimated to expand at a CAGR of ~3% from 2024 to 2031. The AC compressor is driven by electric motor or powered by an engine’s belt drive to draw in, compress, and discharge fluids in order to maintain optimal cabin conditions. ACs have become a standard feature in most cars sold across the globe. This necessity of the AC compressor and increasing applications in all types of vehicles are driving the global automotive AC compressor market.
The emergence of new electrically powered AC compressors have boosted the integration of AC systems in vehicles by reducing the load on engines and facilitating remote operation of the vehicle’s HVAC so that when the driver or passenger enters, the vehicle the temperature would be already set to the preferred comfort level. Demand for these advanced automotive AC compressors is anticipated to increase significantly in the near future.
Drivers of Automotive AC Compressor Market
Rise in disposable income of the global population has led to a surge in the sale of passenger as well as domestic vehicles. Customers, while purchasing new vehicles, are more concerned about the amenities the vehicle has to offer, its safety level, ride comfort level, and other such aspects. The vehicle’s cabin temperature has a strong impact on the ride experience and driver comfort. Optimal cabin temperatures reduce fatigue while driving, which lowers the probability of accidents and hence increases safety. These benefits have prompted HVAC systems to become a standard feature in most vehicles sold across the globe. The AC compressor is utilized to pressurize the AC unit and keep R134a flowing so that it can work properly. Thus, rise in sale of vehicles and changing customer expectations are driving the automotive AC compressor market across the globe.
Global warming has led to an increase in the Earth’s atmospheric temperature by approximately 1-2 degrees Celsius per year. This rise in global warming is propelling the consumer demand for air conditioning in vehicles for better vehicle interior environment during commute, considering the extensive time spent in vehicles during commute.
Electric vehicles are gaining popularity in several countries. These vehicles have huge battery pack and other electronic components that generate tremendous heat during the vehicle’s operation, which needs to be dissipated for the safety of passengers and optimal functioning of the components. Therefore, ACs are a vital component of electric vehicles and the rising popularity of electric vehicles is propelling the automotive AC compressor market across the globe.
Challenges for Automotive AC Compressor Market
Design, manufacture, and assembly of an AC compressor needs considerable precision, advanced R&D facilities, and more advanced technology. Furthermore, it requires technical expertise and high investment. Advancements in material, components, and systems boost the price of AC compressor compared to that of other types of compressors. Consequently, the price of a vehicle equipped with an AC compressor is higher, due to the high price of the automotive AC compressor. Maintenance issues, technical restraints, and high prices of luxury vehicles are expected to act as minor restraints for the market during the forecast period.
The recent outbreak of COVID-19 hampered majority of businesses across the globe, owing to the forced lockdown, which led people to stay at home. This pandemic hindered the sale of vehicles and their components, which disrupted the automotive supply chain across the world and hampered the automotive AC compressor market.
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