The unsung hero of low-carbon vehicles

Decarbonising transport is a crucial part of the effort to restrict global warming to 2oC. Transport, in total, accounts for around a fifth of global CO2 emissions, with cars and trucks accounting for the majority of that, at around 16%1. The “car of the future” be it an electric vehicle (EV) a hybrid electric vehicle (HEV) or a fuel cell vehicle, will therefore have an important role to play in meeting the challenge of low carbon mobility.

The shift away from the internal combustion engine will have a profound effect on the automotive supply chain, which yields exciting investment opportunities. We have written previously about our investments in companies producing batteries, cathodes and the raw materials needed for these products. Another area of interest is power semiconductors, which are used to control the electric motors and manage the battery charging process in electric vehicles.2

Power semiconductor content in cars is expected to increase more than five times with electrification, with a subset of power semiconductors called IGBTs3 expected to drive the majority of this growth4. The IGBT content of an EV is up to 60 times greater than an internal combustion engine vehicle.5. Furthermore, IGBTs are a reassuringly technology-agnostic bet on the rise of low carbon cars EVs, HEVs and fuel cell vehicles all require a much higher IGBT content than traditional cars. 

The most hedged “car of the future” technology bet: IGBTs


Source : Mercedes, Tesla, BMW, Toyota, Wikimedia Commons and Bernstein estimates and analysis

1. IEA, June 2017


3. Insulated-gate bipolar transistor

4. Bernstein estimates, 2017

5. Bernstein estimates, 2017<a href="#ref2" title="Jump back to footnote 5 in the