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Electronics Now Account for 40% of a Car’s Cost

Electronics Now Account for 40% of a Car’s Cost

As the comfort and safety levels in cars have constantly improved over time, so have the electronics they carry. Cars are evolving into computers on wheels, and this is driving up their cost; a recent study reveals that electronics now make up 40% of a vehicle’s price tag.

According to a new Deloitte analysis, the automotive industry has changed dramatically since 2004, when only 25% of cars had airbags, and less than 50% had power seats. The volume of electronic components in vehicles has significantly increased since then, largely owing to safety regulations. The report notes in particular that 2004 saw less than 20% of vehicles equipped with features such as stability control, side airbags, tyre pressure monitors, rear parking sensors, and blind spot monitoring systems. In contrast, over 80% of motor vehicles were equipped with these systems in 2017.

Needless to say, these are relatively standard safety features. Today’s cars boast a wide array of additional electronics such as adaptive cruise control, auto-dimming mirrors, infotainment systems and passive entry systems. Newer vehicles also offer an assortment of fuel saving features, including cylinder deactivation technology, engine stop/start systems and hybrid or electric powertrains.

Although there is no doubt that modern cars are much more advanced than their predecessors, their new features come with higher price tags. As reported by Deloitte, electronics accounted for only 18% of a vehicle’s cost in 2000, but today that figure is 40%, and it is forecast to reach 45% within the next decade.

The study also noted that the cost of a car’s semiconductor content was $312 (£251 / €288) per vehicle in 2013, but has risen to approximately $400 (£322 / €369) today, and is expected to reach almost $600 (£483 / €554) by 2022.

Of course, it is unsurprising that the cost of cars is rising, when they now come equipped with sophisticated safety systems, multiple displays and semi-autonomous driving technology. As the latter becomes more mainstream and automakers are able to achieve higher levels of automation, electronic costs will likely increase even higher.


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