Green transportation, driven by ACES vehicles, is revolutionizing the automotive industry. The next decade is crucial for ACES adoption, particularly in China, a major player in vehicle production and sales. China's vehicle stock is projected to reach 434 million by 2030, shifting the market from incremental growth to a stock market, creating new growth opportunities. This paper focuses on the economic impacts of automation, interconnection, and electrification (excluding the sharing aspect due to its limited impact on the value chain). Autonomous vehicles (AVs) are categorized using the SAE standard (L0-L5), with the study focusing on L3 and above. Optimistic and pessimistic projections for AV market share in 2030 (66% and <10%, respectively) are considered. The transition to electric vehicles (EVs), including BEVs and PHEVs, significantly alters vehicle structure, replacing traditional components with batteries, electric powertrains, sensors, and advanced software and chips. The study quantitatively explores the economic impact of these trends on China's automotive production and aftermarket.

Existing literature on ACES focuses primarily on two areas: technologies and impacts. Research on ACES technologies examines advancements in information and communication, vehicle control, and hardware, highlighting the importance of aspects such as communications, security, and pedestrian detection for connected autonomous vehicles (CAVs). Studies on ADAS technologies and regulations are reviewed. Regarding ACES impacts, most studies focus on environmental effects, including greenhouse gas emissions and fuel consumption, with varying conclusions on whether CAVs will ultimately mitigate or exacerbate global warming. Other research addresses impacts on road safety, capacity, efficiency, and public attitude, as well as socio-economic implications. However, quantitative research on the economic impact of ACES trends is limited due to the relatively short history of ACES vehicles and the scarcity of market data. This study fills this gap by quantitatively exploring the economic impact of ACES trends on the automotive value chain based on the value chain theory.

To quantify the economic impact of ACES trends on the Chinese automotive value chain in 2030, the paper proposes an analytical framework. It begins by calculating the AV stock in 2030 (S2030) based on the AV ratio of new vehicles and annual vehicle sales, considering a vehicle lifespan exceeding 12 years. The installation scale and market size of automotive production components (power batteries, electric powertrains, sensors, in-vehicle software, and chips) are calculated using equations that incorporate the average scale and cost of components, and vehicle sales volume. For the aftermarket, the income is categorized into five segments: maintenance, replacement of wearing parts, repair, tires, and accident repair. Equations are developed to calculate the income for each segment, considering the influence of ACES trends (intelligence levels and electrification types) on the income of sub-items within each category. The impact of intelligence (I types of intelligent connected vehicles) and electrification (J types of electric vehicles) on each sub-item's income is quantified using factors (Mi and Nj). The income calculations also incorporate average income per vehicle, proportions of sub-items in each category, vehicle stock, and relative growth rates. For accident repair, a holistic approach is used, assuming accidents involve two vehicles with equal damage levels, considering encounter and collision probabilities. This section also defines the symbols used for constants and variables in the calculations.

The study projects the Chinese vehicle stock in 2030 and the composition of new vehicle sales based on optimistic and pessimistic expectations for AV adoption. Under the optimistic scenario, AVs would constitute 66.09% of new vehicle sales and 17.63% of the vehicle stock. The quantitative analysis of the production segment projects significant growth in several new markets. The installed capacity of power batteries is expected to be 2.69 times greater in 2030 than in 2023, with a market size 1.48 times larger. The electric powertrain market is projected to be 1.88 times larger. The sensor market could range from USD 1.76 billion to USD 59.38 billion, depending on AV adoption. The in-vehicle software and chip markets show similar potential for substantial growth. For the aftermarket, the study analyzes changes in five income categories. While the average income per vehicle is expected to decrease due to reduced maintenance needs for EVs and fewer accidents with AVs, the total income is projected to rise due to the increase in vehicle stock. Specific findings are presented for each aftermarket segment (maintenance, replacement of wearing parts, repair, tires, and accident repair), detailing changes in average per-vehicle income and total income under both optimistic and pessimistic scenarios. The average income per vehicle is expected to decrease across most categories, while the total income increase is driven by increased vehicle stock, though at a slower rate than the vehicle stock growth in some cases. The study details changes in the proportion and income of each sub-item within these categories, considering the effects of intelligence and electrification.

The findings address the research questions by providing quantitative insights into the restructuring of the Chinese automotive value chain under ACES trends. The significant growth projected for components like power batteries, electric powertrains, sensors, and software/chips confirms the creation of new markets. The decrease in average aftermarket income per vehicle is attributed to factors such as reduced maintenance needs for EVs and the safety improvements from AVs. However, the total aftermarket income is still expected to increase significantly, driven by the substantial growth in the vehicle stock. This highlights the importance of considering both per-vehicle and total market trends when assessing the economic impact of ACES. The results are relevant to stakeholders across the value chain (manufacturers, suppliers, service providers, and policymakers), informing strategic decisions about investments, product development, and policy interventions. The study's findings provide a business-oriented perspective, vital for navigating the evolving automotive landscape.

This research provides a quantitative analysis of the economic impact of ACES trends on the Chinese automotive value chain in 2030. It reveals the emergence of new markets for ACES-related components, while suggesting a decrease in average aftermarket income per vehicle, counterbalanced by the overall growth in the vehicle stock and the potential of the aftermarket. The study highlights the importance of adapting strategies to the transformative ACES trends and calls for continued monitoring of the sector for better decision making. Future research should focus on expanding the data set, refining mathematical models, and extending geographical scope for a more robust understanding.

This exploratory study has limitations stemming from data scarcity and simplified mathematical models. The analysis is specific to China and may not fully reflect the economic impact of ACES trends in other regions. Future research should incorporate more comprehensive data, utilize more sophisticated models, and extend geographical scope for greater generalizability.