Electric Vehicle Insulation Materials Market Size (2024 – 2030)

The Global Electric Vehicle Insulation Materials Market was valued at USD 1.55 Billion and is projected to reach a market size of USD 5.55 Billion by the end of 2030. Over the forecast period of 2024-2030, the market is projected to grow at a CAGR of 20%.

Over the forecast period, market growth is anticipated to be driven by favorable government efforts to encourage the usage of green cars. The industry will also be fueled by a rise in demand for battery-powered EVs, which is caused by strict government rules on car emissions. Governments all across the globe are providing incentives to promote the use of electric vehicles since doing so reduces pollution and the need for oil.

Key Market Insights:

The need for materials to insulate the electrical components of electric cars is referred to as the "electric insulation market." The battery, motor, power electronics, and charging systems are some of these parts. Vehicle insulation must offer insulation and be made of lightweight, dependable materials. Insulation for electric vehicles is made of polyamide, silicone rubber, ceramic fiber, and polyester film. Several significant firms are working in the fiercely competitive electric vehicle insulation industry. High thermal resistance may be found in some of the best coatings for electric insulation. Overall, the functioning of contemporary electric and hybrid cars is significantly influenced by electric insulation. They will become increasingly prevalent in the future as a result of rising demand for car insulation, particularly in the passenger market, together with new infrastructure and economic expansion to support them.

To assist in increasing protection against short circuits and the spread of fire, Sabic, a pioneer in the chemical industry, released NORYLTM NHP8000VT3 resin, a product ideally suited for film used in the battery modules for electric vehicles (EV).

Global Electric Vehicle Insulation Materials Market Drivers:

Electric vehicle insulation materials may increase due to emerging trends in the market:

The raw material providers selected forward integration for the production of insulating items, which has led to an overabundance of forward integration on the market. Captive consumption is used by businesses in the electric vehicle insulation market to lower manufacturing costs. The businesses now have the opportunity to expand their reach and enter new application markets.

Major corporations with substantial value chain integration mostly control the market. Because the market is so sensitive to prices, firms frequently compare their prices. Due to increased consumer demand for improved energy efficiency and acoustic insulation as well as expanding consumer awareness of vehicle safety, the market is predicted to rise favourably. However, it is projected that over the projection period, product demand may be constrained by the high price of advanced insulating material.

Government restrictions that are strict about zero carbon emissions and the rapid advancement of technology:

Maximizing the performance and driving range of electric cars is made possible by effective insulation. The insulation effectively manages heat dissipation from strong batteries and electric motors, ensuring that these vital components operate at their appropriate temperatures and leading to increased energy efficiency. Consequently, EVs can go farther on a single charge and use less energy, furthering the goal of having no emissions. Additionally, the market's revenue growth is being fueled by the execution of legislation by various levels of global government authorities. For instance, 35% of auto sales for a model must be zero-emission vehicles, such as battery- or hydrogen-powered cars or plug-in electric hybrids, by Californian regulations. Close to 12% of all automobiles sold in the state were zero-emission vehicles, according to the California Air Resources Board. Special provisions in the Clean Air Act let states adopt California's auto emission standards or adhere to federal restrictions. Ten states, including Connecticut, Maine, and Colorado, have recently approved Zero Emission Vehicle (ZEV) rules, following California's example and mandating that 7 to 10% of new cars be electric. These states include Maryland, New Jersey, New York, Rhode Island, Oregon, and Vermont.

Global Electric Vehicle Insulation Materials Market Challenges:

Market expansion for electric vehicle insulation may be hampered by disruptions in the supply chain for obtaining raw materials:

The market for electric car insulation is dependent on particular materials that can only be obtained from a small geographic area or are subject to market changes. Manufacturers may find it difficult to acquire a reliable and affordable supply if there are any disruptions in the availability of these raw materials. These disruptions might result in supply shortages and increased prices. Additionally, electric vehicle manufacturers may have trouble obtaining enough insulation materials if a key supplier experiences operational or logistical issues and is unable to meet demand. This could cause production delays and possible delays in delivering vehicles to customers, which would ultimately restrain the market's revenue growth. Manufacturers of EVs are raising the price of EVs by 6-8% as a result of rising input and component prices. About 20% of the world's supply of nickel, a key component required to make the batteries used in electric vehicle batteries, comes from Russia. However, because of the ongoing conflict between Russia and Ukraine, prices for commodities like nickel and lithium have considerably increased. Since batteries make up about 50% of the overall cost of EVs, cost increases are anticipated, which will stifle market revenue growth.

GLOBAL ELECTRIC VEHICLE INSULATION MATERIALS MARKET REPORT COVERAGE:

Global Electric Vehicle Insulation Materials Market Segmentation: By Material

• Thermal Interface Materials

• Foamed Plastics

• Ceramics

• Others

Foamed plastics dominated the market and generated more than 58% of worldwide sales. Insulation made of foamed plastic is very light and has excellent impact resistance. Additionally, the industry is benefiting from the usage of compression pads composed of foamed polymers to lessen vibration and shock on the battery components.

Due to its dielectric nature, which prevents arcing between battery cells, and its capacity to function as a heat sink and not transfer heat to nearby battery cells, plastic packs are seeing an increase in their use in the insulation of car battery packs. Additionally, the insulation made of foamed plastic is more dependable in the challenging automobile environment.

Due to the non-biodegradability of foamed plastic, the US Environmental Protection Agency (US EPA) has placed rigorous limitations on its usage and disposal. Additionally, it is anticipated that the segment growth will be negatively impacted by the rising awareness of the environmental risks brought on by improper disposal of foamed plastics throughout the projected period.

Over the projected period, the demand for thermal interface materials is anticipated to grow significantly at a CAGR of 20.4%. The category is expected to rise as a result of increasing product usage in battery pack management systems due to its superior thermal conductivity, low viscosity, and capacity to maintain insulating qualities at high temperatures.

Global Electric Vehicle Insulation Materials Market Segmentation: By Product

• Thermal Insulation

• Electrical Insulation

• Acoustic Insulation

More than 50% of global sales were generated by electrical insulation, the market leader. The sector is anticipated to grow at the quickest CAGR. Due to the growing need for thermal insulation materials in battery pack management, the thermal product sector is anticipated to have the second-highest market share. Additionally, the use of the product in maintaining the vehicle's interior temperature is helping the market expand.

Increased battery capacities that are appropriate for long-distance cars have been developed as a result of advancements in battery technology. However, these more modern battery types tend to produce greater heat, which might harm the battery's performance and shorten a vehicle's range. Thus, the use of superior thermal insulation is given the highest priority by EV producers.

Due to the increasing emphasis on lowering EV ambient noise, acoustic insulation is predicted to expand at the second-fastest rate throughout the projected period. Furthermore, it is anticipated that the stricter vehicle noise pollution standards would increase product demand. As a result, the manufacturers are investing a lot in the creation of acoustic insulation materials that are very effective and don't add to the weight of the vehicle.

Global Electric Vehicle Insulation Materials Market Segmentation: By Application

• Under the Hood & Battery Pack

• Interior

• Others

More than 43% of worldwide sales came from the application sector for under-the-hood & and battery packs, which dominated the market. The industry is expected to increase as a result of rising product usage for insulating various vehicle parts, including battery packs and electric motors.

Lithium-ion battery packs have a small range of acceptable operating temperatures. Wide temperature swings hurt battery performance, shorten battery life, and limit vehicle range. Some of the most popular materials for the thermal management of electric car batteries are mica and mica-based insulation.

Over the forecasted period, the interior application category is expected to have the second-fastest CAGR. The expanding use of thermal and acoustic insulation to increase passenger comfort and lessen interior vibrations and noise. The impending introduction of many EV models is predicted to increase product demand.

The insulation of power electronics is among the topics covered in the other portion. The power electronics utilized in EVs may fail due to the greater ambient temperature nearby, resulting in long-term harm to the car. To preserve the power of electronic components, manufacturers are adopting insulating materials with exceptional insulation qualities.

Global Electric Vehicle Insulation Materials Market Segmentation: By End-use

• Battery EV

• Plug-in Hybrid EV (PHEV)

• Hybrid EV (HEV)

• Fuel Cell EV

The market was headed by the Hybrid Electric Vehicle (HEV) category, which brought in more than 53% of total revenue. The sector is expanding as a result of rising consumer demand for fuel-efficient, environmentally friendly vehicles. Additionally, it is anticipated that during the course of the projection period, regulatory support for the use of hybrid vehicles will increase.

A conventional internal combustion engine (ICE) and an electric motor are used to power HEVs. Instead of being plugged in to charge the battery, a hybrid car charges through regenerative braking. These cars exhibit better fuel efficiency than conventional ICE vehicles as a consequence.

The category for battery electric vehicles (BEVs) is predicted to have the fastest CAGR throughout the projected period. The category is anticipated to rise as a result of rising EV demand, increasing expenditures in the creation of newer car models, and advancements in battery technology.

When the battery is low, Plug-in Hybrid Vehicles (PHEVs) automatically transition to an internal combustion engine (ICE). Due to the segment's exceptional fuel efficiency and very minimal environmental effect, it is anticipated to increase at a strong rate during the projection period.

Global Electric Vehicle Insulation Materials Market Segmentation: By Region

• North America

• Europe

• Asia-Pacific

• South America

• Middle East and Africa

The market for electric vehicle insulation is projected to be dominated by the United States during the forecast period. The United States is predicted to keep up a steady pace in terms of revenue growth by 51 %. This may be because electric automobiles produce no pollutants and have lower operating and maintenance costs. Additionally, favorable government initiatives, subsidies, and tax rebate programs to promote the use of electric cars are predicted to boost the growth of the market's revenue. For instance, the US government has provided substantial financial and technical support to promote EV adoption.

On February 1st, 2022, the American government announced that it would spend $5 billion to build thousands of electric vehicle charging stations. By 2030, the US government aimed to sell 500,000 more EV charging stations and 50% of new cars as plug-in hybrid or electric vehicles. Furthermore, it is anticipated that the presence of industry behemoths like Rivian Automotive, Inc., Lucid Group, Inc., and Tesla, Inc. in the country would increase domestic production of alternative fuel vehicles. Businesses like Tesla, Inc. may provide Tesla Insurance to customers in California. It is projected that these actions would support the market's revenue expansion.

Asia Pacific is anticipated to be the quickest growth and largest electric vehicle insulation market throughout the forecasted period. Due to rising fuel prices, increased government efforts, and an increase in the use of smart mobility services, the market for electric vehicle insulation in China is anticipated to grow at 32 %. Additionally, consumer preferences and readiness to purchase new automotive technologies in countries like China, Japan, and Korea affect demand for these vehicles. Governments in countries like India are taking similar actions to promote EV manufacturing and adoption. As an illustration, India's introduction of stricter pollution restrictions in 2021 raised the cost of diesel and petrol motors, raising demand for electric automobiles, which is predicted to grow the market for electric vehicle insulation.

COVID-19 Impact on Global Electric Vehicle Insulation Materials Market:

The lockdown that the governments imposed, which caused manufacturing plant activities to cease, has hurt several automobile businesses in Europe and the United States and has interfered with the manufacture of insulators. Major car manufacturers have been impacted as a result of the numerous lockdown measures that have been authorized by governments throughout the world over the past several months, which have interrupted both the supply and demand cycles. As the world's primary production centers for insulators, Europe and the U.S. are severely impacted by the epidemic, which has caused the collapse of all vehicle markets.

Global sales of electric vehicles saw a historic decline as a result of the COVID-19 epidemic. In contrast to the decline that the whole auto industry endured, this decline was, however, less severe. Over 3 million electric vehicles were sold globally in 2020, the International Energy Agency (IEA) projects, representing a 40% increase over sales in 2019. This was mostly noticeable in the second half of 2020, when temporary or eased lockout limitations were implemented and the car industry started to recover.

Global Electric Vehicle Insulation Materials Market Recent developments:

Battery safety is now more important than ever since heat management affects the performance of an electric vehicle as a whole. To increase the security of battery packs, governmental organizations are putting tight laws in place. To give one example, the United Nations Economic Commission for Europe (UNECE) proposed a new legal framework in November 2021 to safeguard the battery life utilized in plug-in hybrid and fully electric vehicles.

According to the new requirements, battery makers must demonstrate that their electric vehicle batteries will lose less than 20% of their initial capacity after five years or 100,000 miles. A UNGTR (Global Technical Regulation) was created for these regulations. Such stringent safety standards will compel EV producers to include heat management systems near the batteries, which is expected to increase the uptake of EV insulation systems.

Key Players:

1. Saint-Gobain

2. Parker Hannifin Corp

3. Elkem Silicones

4. Knauf Industries

5. BASF SE

6. Zotefoams Plc

7. 3M

8. Elmelin Ltd.

9. Pyrophobic Systems Ltd.

10. Morgan Advanced Materials

In March 2023: A new high heat and flame-retardant grade has been introduced by Solvay, an industry leader in specialized materials, to fulfill stringent safety requirements for EV battery components. The battery module plates of electric vehicle models that use higher voltage systems are specifically targeted by the new Xydar LCP G-330 HH material, which fulfills demanding thermal and insulation requirements.

In January 2023: To safeguard the battery systems and electrical components of electric vehicles (EVs), AkzoNobel introduced a new line of Resicoat EV powder coatings.