China’s supply chain reshaping global traction inverter industry

TrendForce’s latest report reveals that global EV traction inverter installations reached 8.67 million units in 4Q24, marking a 26% QoQ increase. Strong demand from China and Europe served as the primary growth driver, leading to a 28% increase in installations for both BEVs and PHEVs compared to the previous quarter. This surge propelled Huawei into the top five global traction inverter suppliers for the first time.

In 2024, global traction inverter shipments totaled 27.21 million units. SiC inverters saw higher adoption thanks to Tesla and Chinese automakers, reaching a 16% penetration rate in Q4 – the highest of the year. This trend signals growth for the highly competitive power semiconductor industry.

However, geopolitical tensions remain a challenge. Before leaving office, the Biden administration launched a six-month investigation into China’s SiC industry, a move expected to continue under the Trump administration. This investigation will likely become a strategic tool for shaping future U.S.-China relations.

BYD surpassed Japan’s Denso in 3Q24 to become the global market leader, maintaining its top position in Q4. The biggest highlight of the quarter was Huawei’s entry into the global top five, driven by the strong sales of its AITO EV series. With three of the top five suppliers now being Chinese companies, the market is seeing a significant shift away from the traditional dominance of European, American, and Japanese suppliers.

TrendForce forecasts that China and Europe will continue to lead growth in the traction inverter market in the short term. BEVs, in particular, have a higher demand for traction inverters than other powertrain types, further reinforcing China’s crucial role in the market.

While policy risks remain – including the potential shift toward oil over electrification in the U.S. – China’s EV market is expected to maintain momentum. Government incentives for vehicle replacement programs and expansion into overseas market are projected to support a 14% annual growth rate in global traction inverter shipments in 2025.

-- Source: TrendForce, Taiwan.