EV Traction Inverter Installations Decline by 27% QoQ in 1Q24, with China's Tier 1 Manufacturers Emerging as Key Highlights, Says TrendForce

TrendForce’s latest data on the global EV inverter market shows that the traditional off-season for EVs led to a significant drop in traction inverter installations in 1Q24, reaching just 5.22 million units—a 27% decrease from 7.14 million units in 4Q23. BEVs accounted for 48% of these installations, down 5% from the previous quarter. Meanwhile, the share for HEVs and PHEVs increased from 47% to 52%, highlighting that range anxiety continues to be a key concern for consumers when purchasing vehicles.

Examining traction inverter installations across various voltages ranges in Q1 reveals a 2% rise in installations for inverters with voltages <300V, now at 36%, driven by the growth in hybrid models. Conversely, the decline in BEVs led to a 1% decrease in installations for inverters with voltages >300V <500V, dropping to 55%; the share for voltages >550V remained steady at 9%. Despite slight fluctuations, the market’s primary voltage range continues to be >300V <550V. 

From a supply chain perspective, China’s domestic substitution strategy has propelled two Chinese companies, BYD and Inovance, into the ranks of the world's top five Tier 1 traction inverter suppliers. BYD’s inverters are self-developed and produced for its own models, while Inovance supports startups like Li Auto, XPeng, and Xiaomi. Additionally, Huawei's market share has increased by 1% for three consecutive quarters, raising the potential for it to break into the top five suppliers. Overall, Chinese companies, including BYD and Inovance, accounted for 34% of the market in Q1, signaling a shift in dominance from European, American, and Japanese Tier 1 suppliers.

With range anxiety and geopolitical factors influencing consumer behavior, many may adopt a cautious approach to buying BEVs, favoring hybrid models instead. TrendForce forecasts that BEV traction inverter installations in Q2 may remain steady or see slight growth, with both BEV and hybrid models driving installations equally. Overall, the traction inverter market should recover from the off-season in Q2, with projected installation growth of about 10 to 20%.