Why Semiconductors Matter as Much as Batteries in Electric Vehicles

As electric vehicles become more connected, software-driven and intelligent, semiconductor innovation will play an even bigger role in shaping the next generation of mobility. The companies that combine advances in battery technology with breakthroughs in semiconductor design, embedded intelligence and power electronics will be best positioned to lead this transformation.

July 16, 2026. By News Bureau

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Sophisticated semiconductor systems

EV Outlook 2026

EV adoption

International Energy Agency

Vehicle-to-Everything

Electric vehicles (EVs) have become central to the global transition towards cleaner transportation. Over the last few years, governments have introduced supportive policies, automakers have accelerated their EV plans, and consumers have shown growing confidence in electric mobility. Most discussions around this transition continue to focus on batteries: how fast they charge, how far they can travel and how affordable they are becoming.

Batteries are undoubtedly the heart of an EV, but they are no longer the only technology defining its performance. Modern electric vehicles rely on sophisticated semiconductor systems that control how efficiently power is used, how safely the vehicle operates and how intelligently it communicates with its surroundings. As the automotive industry moves towards connected and software-defined vehicles, semiconductors are becoming just as critical as batteries in shaping the future of mobility.

Beyond the Battery

The latest Global EV Outlook 2026 published by the International Energy Agency (IEA) highlights how quickly the EV market is expanding. Global electric car sales crossed 20 million units in 2025, meaning one-quarter of all new cars sold were electric. The IEA expects sales to grow further to around 23 million vehicles in 2026, reflecting continued momentum despite changing economic conditions and geopolitical uncertainties.

As EV adoption grows, so does the importance of electronics inside every vehicle. Unlike conventional internal combustion engine vehicles, EVs depend on semiconductor-based systems to manage energy flow, control electric motors, monitor battery performance and support connected features. These systems are no longer optional, and they are fundamental to how modern electric vehicles operate.

Powering Every Drive

One of the most important semiconductor-driven systems in an EV is the motor controller. While the battery stores electrical energy, the motor controller determines how efficiently that energy reaches the wheels. It manages acceleration, regenerative braking, torque delivery and overall driving performance.

Power semiconductors play a crucial role in this process. Technologies such as Silicon Carbide (SiC) devices are helping manufacturers improve efficiency, reduce energy losses and enable faster charging. According to S&P Global Mobility, electrification is one of the biggest drivers of semiconductor demand because electric vehicles contain roughly two to two-and-a-half times the semiconductor value of conventional internal combustion engine vehicles.

This is changing how automakers think about vehicle performance. Instead of relying only on larger batteries to improve driving range, manufacturers are increasingly focusing on smarter power management through advanced semiconductor technologies.

Connected by Design

Today's vehicles are evolving into connected digital platforms. Consumers expect features such as real-time navigation, smartphone integration, remote diagnostics, predictive maintenance and over-the-air software updates. Delivering these experiences depends on communication modules and embedded semiconductor systems that enable vehicles to exchange data securely with cloud platforms, charging infrastructure and other connected devices.

The industry is also preparing for wider adoption of Vehicle-to-Everything (V2X) communication, which will allow vehicles to communicate with surrounding infrastructure and other road users. These technologies have the potential to improve road safety, optimise traffic flow and support future autonomous driving capabilities.

As vehicles become more connected, communication semiconductors will become just as important as power electronics in defining the customer experience.

Software Takes the Wheel

The automotive industry is also witnessing the rise of Software-Defined Vehicles (SDVs), where software increasingly determines how a vehicle performs throughout its lifecycle. Features can be upgraded remotely, new capabilities can be introduced through software updates, and vehicle performance can improve long after the car leaves the factory.

According to McKinsey, the global automotive software and electronics market could reach USD 519 billion by 2035, growing much faster than the overall vehicle market. The growth is being driven by software-defined architectures, artificial intelligence, advanced computing and increasing demand for connected mobility.

Artificial intelligence is adding another layer to this transformation. Recent McKinsey research notes that autonomous driving is increasingly becoming a race for compute power, software, data and semiconductors. High-performance processors, AI accelerators and advanced system-on-chip architectures are expected to become central to next-generation vehicles, supporting advanced driver assistance systems, intelligent battery management and enhanced in-vehicle experiences.

In many ways, the future competitiveness of an EV will depend not only on battery technology but also on the intelligence built into its electronic systems.

India's Opportunity

India is well placed to benefit from this shift.

The country has built strong capabilities in semiconductor design and embedded engineering over the past two decades. At the same time, the government is expanding its semiconductor ambitions through the next phase of the India Semiconductor Mission.

For India's automotive sector, this creates an opportunity to move beyond manufacturing vehicles and contribute more meaningfully to the technologies that power them. Developing expertise in automotive-grade semiconductor design, power electronics, communication modules and intelligent control systems can help India strengthen its position in the global EV value chain while supporting the country's ambition to become a global semiconductor hub.

The Road Ahead

The future of electric mobility will not be defined by batteries alone. Batteries provide the energy, but semiconductors determine how efficiently that energy is used, how intelligently vehicles operate and how safely they interact with the world around them.

As electric vehicles become more connected, software-driven and intelligent, semiconductor innovation will play an even bigger role in shaping the next generation of mobility. The companies that combine advances in battery technology with breakthroughs in semiconductor design, embedded intelligence and power electronics will be best positioned to lead this transformation.

The conversation around electric mobility therefore needs to evolve. The future of EVs is not just about storing more energy; it is about using that energy more intelligently. And at the centre of that transformation are semiconductors, quietly enabling the smarter, safer and more connected vehicles of tomorrow.

- Nikul Shah, Founder & CEO, IndiesemiC