Automotive USB-C Market Trends

Growth Drivers

• Increasing sales of electric vehicles: One of the primary factors contributing to the automotive USB-C market is the growing popularity of electric vehicles across the globe, where manufacturers are keen on integrating sophisticated charging systems. As the number of electric cars is expected to reach 13.9 million by 2023 as per the IEA, car manufacturers have begun focusing on USB-C ports for quicker and safer charging. In August 2024, Microchip Technology announced three flexible and modular EV Charger Reference Designs showing the link between EV equipment and USB-C charging solutions. The release also brings out the fact that as more electric and hybrid cars are introduced in the market, automotive USB-C will be crucial for fast charging and integration, which is poised to further boost the demand for USB-C technology.

• Standardization of charging ports: Regulatory bodies are now encouraging the use of USB-C as a standard charging port to ensure that consumers have a smooth experience when using charging ports in vehicles. In December 2024, the European Union set a regulation which requires that all devices should have a USB-C port, including vehicles to avoid compatibility problems. This regulation is likely to increase the rate of adoption of USB-C across automakers, which is anticipated to create value for both consumers and manufacturers. Furthermore, the U.S. and some parts of Asia are planning the same policy to standardize the charging technology, which would make USB-C a standard across the board.

• Rising demand for connected cars: The trend towards connected vehicles and in-car entertainment is driving the demand for USB-C ports for high-speed data transfer and high-power delivery. In January 2024, Samsung joined hands with Hyundai Motor Group to connect smart homes with connected cars, highlighting the trend towards integrating digital solutions. As more cars become equipped with smart features, USB-C is likely to be instrumental in meeting connectivity, entertainment, and charging needs. Furthermore, with the increasing popularity of self-driving and AI car-mounted vehicles, the function of USB-C in realizing high-speed data exchange will be more significant.

Challenges

• Infrastructure limitations for high-power Charging: The charging capabilities of USB-C are not fully realized in many cars and other charging points since they are not optimized to handle the high power that can be delivered by the port. This is owing to the infrastructure limitation that slows the charging speeds of USB-C powered in-vehicle charging and prevents their widespread adoption. To increase the usage of USB-C, it is important to upgrade existing installations and make new installations USB-C optimized. There is a need for integration of automakers, charging station providers, and regulatory bodies, as well as for research on more innovative charging technologies.

• Challenges in the supply chain affecting component acquisition: The global semiconductor shortage has affected the production and availability of the USB-C enabled components for cars, which have resulted in production hitches in the supply chain. Consequently, the adoption of USB-C in new car models and the integration of this technology have been slowed down. Manufacturers are now struggling to meet production goals and satisfy consumers. To reduce the effects, there is the need for the semiconductor manufacturers, automakers, and other stakeholders to work together.