ST Microelectronics releases the data on global sales
Electrification continues to grow despite macroeconomic conditions, with US electric vehicle (EV) sales up from 0.2% in 2011 to 9.1% in 2025, with projections stating 50% of vehicle sales in the US being EVs by 2030. China has also seen growth, with 24% of all passenger vehicles sold in February 2025 being EVs.
The EV revolution is coupled with the move towards software-defined vehicles (SDV) architecture. Morgan Stanley believes SDVs could account for 90% of auto production by 2029.
OEM competition continues to push down development timelines with more avenues to reduce development costs. This is driven by the desire to bring vehicles to market quicker, but has to contend with the changing regulatory environment and consumer expectations.
Future proofing is becoming a key factor to the industry, as small decisions can either turn into the inspiration for further development or hold the entire project back. Hardware needs to be compatible and adaptable to software developments to ensure speed is kept.
Both US and Chinese firms are accelerating the move towards EVs and SDVs with design, pricing, and ranges. This is speeding up time to market, especially for Chinese firms such as BYD, which has cut its development cycle to 18 months, much shorter than other competitors, setting a new industry standard.
At the time 2023 was a record year for EV sales, with 14 million sales, but 2024 broke this with 17 million sales, according to the International Energy Agency. The report went on to say that EV sales made up 20% of all car sales in 2024, with China being at the forefront of this change. The country is experiencing a 40% annual growth rate in EV sales. The US lags behind with a 10% increase, whilst Europe has stuttered with a 6% shrink.
The addition of AI and OTA (Over the air) updates is pushing the automotive industry further and faster than expected. This is increasing the demand for memory on automotive MCUs. The sheer number of chips involved makes it difficult for software support and sourcing. Different suppliers offer different chips, but few with the needed capacity.
Infotainment and advanced driver-assistance systems applications are not the culprits as these exist on application processors, instead AI-enhanced HVAC, heat pumps, and battery management systems are stored on these chips, making them essential and in need of an upgrade. AI can be implemented into MCUs to enhance efficiency of motors and batteries to help improve range, whilst also helping maintenance with anomaly detection.
