Vehicle Electrification Trends – Parts And Accessories Sales

Vehicle electrification is underway, with 4+ million EVs on the road in the US by the end of 2021¹ and sales growing rapidly. What does it mean for parts and accessories sales? Should the auto parts and accessories industries expect growth or shrinkage? Will we see demand for certain types of parts or accessories collapse?

It’s true that predictions are hard – especially about the future – but we know at least three things about vehicle electrification:

1. It’s going to be decades before a majority of the US automotive fleet is electrified.
2. Trucks and large SUVs will be slow to electrify.
3. Vehicle electrification will open as many doors as is closes for the parts and accessories industry.

It Will Take At Least 20 Years For Half The US Vehicle Fleet To Electrify

The US vehicle fleet is currently about 280 million vehicles², most of which run on gasoline or diesel. And while there are a lot of opinions about how long it will take for the majority of new US vehicle sales to become fully electric, a recent report suggests that the US vehicle fleet will probably not be even 50% electrified until well after 2050, and definitely not before the mid 2040s.³

Whatever the future holds, it’s all but certain that the majority of vehicles on the road in the United States will be powered by gas or diesel for at least the next two decades. And even after the US fleet is 50% electrified, we’ll still have 100+ million gas or diesel-powered vehicles on the road.

Of course, if you’re in a business that’s reliant on selling parts or accessories exclusively for gas or diesel-powered vehicles, you can likely expect slowing demand at some point. But it’s not as if demand for gas or diesel parts will collapse overnight.

Consumer Interest In Gas and Diesel Performance Is Likely Declining

If we assume that Google Search trends are indicative of casual consumer interest, it’s easy to see evidence of declining interest. Check out the graphs for the search terms “engine mods” and “turbocharger” below – Google Trends is showing a steady decline in search volume for these terms over the last 5 years.

While a decline in search traffic doesn’t necessarily mean the market for turbochargers or engine mods is shrinking, it does suggest the future for these types of parts and accessories isn’t necessarily bright.

Of course, shrinking interest is only a problem for companies that can’t adapt. Consumer interests are constantly changing, and most companies are constantly adjusting their product mix in response.

Trucks and Large SUVs Resist Electrification

A quick glance at this Car & Driver list of new EVs planned for production in the next five years shows that most EVs will be sedans or crossovers. Out of 48 upcoming models offered by established automakers, only six are pickup trucks. And of the six pickups listed, none are 3/4-ton or larger. There also aren’t any large SUVs on the list of planned EVs from established automakers for the next five years.

The relative lack of new EV trucks planned for production is odd considering trucks are one of the fastest-growing segments in the auto industry. And yet there are no HD trucks or large SUVs on the Car & Driver list.

Pickups and Large SUVs Will Probably Be The Last To Electrify

Looking at the relative lack of trucks and large SUVs planned for electrification, it’s important to note that these vehicles are often used for towing…and towing greatly impacts EV range.

Car & Driver recently tested a new EV with a large towing load and found the driving range was cut in half pulling just a 3,859-pound boat. Based on these observations and some back-of-the-envelope math, Car & Driver estimates most electric trucks will lose half their range towing a large load.⁴ Cutting a truck’s driving range from say, 250 or 300 miles to 125 or 150 miles could very well make it impractical to own for someone who tows frequently.

And if we look at some of the most popular accessories for pickup trucks and large SUVs:

• Off-road accessories like aggressive and/or oversized tires, lift/leveling kits, heavy-duty bumpers with integrated winches, running boards, and side steps for easier cab access, etc.
• Towing products – everything from load-leveling hitches and trailer brakes to large trailers
• Overlanding gear – bed racks, rooftop tents

It’s clear that many truck and SUV owners use their vehicles in places without ready access to charging, like campsites, trailheads, duck blinds, hunting cabins, and so on. While there will certainly be some electrified trucks on trails and at campsites, it’s not likely that we’ll see an electrified pickups takeover.

And electric alternatives to new 3/4-ton or 1-ton pickup trucks are not on any automaker’s horizon at this point in time.

Vehicle Electrification Will Open New Doors For The Parts and Accessories Industry

While vehicle electrification will obviously lead to reduced demand for exhaust systems, fuel injection systems, oil filters, and more, it will also create new segments:

• Remanufactured, replacement, or performance upgraded battery packs
• Remanufactured, replacement, or performance upgraded electric motors
• Reprogrammed or modified EV software/programmers
• EV “swap” kits that replace the gas or diesel engine in an older vehicle with a modern EV powertrain

Additionally, because of the substantially increased curb weight of battery electric vehicles, chassis/suspension system and brake system upgrades also seem like a good opportunity for parts sellers. And many of the most popular existing accessory categories – appearance upgrades, waxes and cleaning products, interior upgrades – shouldn’t see any change. Likewise, electrified vehicles will still need replacement side mirrors, door handles, bumper covers, window regulators, wheel hub assemblies, etc.

In other words: Despite all the claims about the “simplicity” of EVs, they will still have thousands of common parts – chassis, suspension, and trim parts. And they will still need cleaned, waxed, and dressed up inside and out.

Finally, there will be new parts and accessories segments we simply can’t contemplate. Who could have predicted the popularity of mobile electronics in the 1980s? Or the popularity of overlanding accessories in the early 2000s? Between constantly changing consumer interests and constant product innovation, it’s likely there’s a whole new category of replacement parts and/or accessories on the horizon.

Summary

Predictions are hard – especially about the future – but we can be certain that the US vehicle fleet will not change from being mostly gas or diesel powered to mostly electric overnight. This change will take decades to complete, and pickup trucks will likely be slow to transition, due to their popularity with people who tow and/or use their vehicle in places without access to charging.

Still, many companies in the auto parts and accessories industry need to start looking toward this coming transition. There are many product and accessory categories that are going to decline (if they aren’t in decline already), and transitioning will be challenging.

In situations where big changes occur, one company’s loss is often another company’s gain. But looking toward the future and planning for change is a good hedge against uncertainty, as is placing more emphasis on part and accessory categories that are likely to survive or thrive the transition. And of course, innovation.

And from a marketing standpoint, the coming change and uncertainty should encourage all brands to build relationships directly with consumers. Brands that rely on third parties to sell and support customers are more vulnerable to disruption than brands that have direct consumer relationships. Consumers who need parts or accessories for their gas or diesel powered vehicle will likely have more options in a tight market, meaning brands will need top tier marketing to thrive.

References

¹See SEMA Research Report Emerging Trends: Electrification, Alternative Power and Advanced Technology

²See Bureau of Transportation Number of U.S. Aircraft, Vehicles, Vessels, and Other Conveyances

³See U.S. Drive Grid Integration Technical Team Summary Report on EVs at Scale and the U.S. Electric Power System

⁴See We Bet F-150 Lightning’s Range Is under 100 Miles when Towing at the Max