Automotive Lighting Market Trends

Growth Drivers

• Preference for aesthetic and functional lighting features: Consumers are demanding modern lighting systems that bring design quality with performance needs. This factor is anticipated to boost the demand for advanced automotive lighting technologies in the coming years. Companies are partnering with other players to deliver advanced automotive lighting solutions through high-resolution matrix headlamp systems. For instance, in July 2023, HELLA and Porsche unveiled the SSL | HD as the first high-resolution matrix headlamp system with 32,000 individually manageable LED pixels in each headlamp. Manufacturers are benefitting from emerging lighting innovations, which enhance the need for complicated automotive lighting systems to determine future design and safety specifications of vehicles.
• Advancements in lighting materials and design: Modern developments in automotive lighting materials and advanced design strategies are boosting the function and appearance of vehicle lighting solutions. Various companies are forming collaborations to enable advanced LiDAR technologies in next-gen electric vehicles. For instance, in May 2020, Volvo Cars, along with Luminar Technologies, announced the introduction of a laser-based headlamp system that integrates LiDAR sensors for improved driving condition adaptation, resulting in enhanced visibility and safety features. This innovative lighting technology is set to be installed in the new Volvo ES90. By working together, these companies are improving automotive lighting efficiency and developing road lighting systems to deliver better illumination. Such collaborative moves are estimated to offer lucrative gains to the industry giants.
• Transition from traditional Lighting to LED, OLED, and laser technologies: The integration of light-emitting diodes (LED), organic light-emitting diodes (OLED), and laser-based systems is one of the most sought-after lighting technologies in the automotive sector. The LEDs are gaining prominence as they generate bright illumination through lower energy usage than conventional halogen lamps. The automakers are adopting energy-efficient lighting solutions to address both environmental sustainability and economic needs for automotive components. The development of micro-optics and holographic technologies is enabling innovative materials, allowing manufacturers to create compact aesthetics for their designs and register a double-digit revenue growth in the years ahead.

Vehicle production figures for various regions across 2021 and 2022

Source: European Automobile Manufacturers' Association (ACEA)

Challenges

• Battery performance and longevity: Battery performance and longevity are acting as key challenges for electric vehicles. While advancements are enhancing efficiency and energy density, consumers are still concerned about battery degradation over time. The ability of batteries to retain a charge diminishes with their increasing age, resulting in reduced driving range. The high cost of replacing EV batteries remains a significant barrier, as these components constitute a large part of the vehicle’s overall price. This concern, coupled with the uncertainty surrounding battery lifespan, is discouraging potential buyers from making the switch to electric vehicles, especially for long-term investments.
• High manufacturing costs and complex integration: Lighting methods such as LED, OLED, and laser systems require a significant investment in manufacturing costs. Components for these advanced systems represent significant investments in R&D and precise manufacturing processes. This can impact the vehicle's overall cost. Furthermore, the integration of these complex lighting into vehicles must also consider compatibility with other vehicle electronic components, sensors, and control systems; it can be a significant engineering hurdle, and all this can delay new technology adoption and increase manufacturing timelines.