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Global Energy Efficient Motor Market - Outlook and Forecast 2022-2027
The global energy-efficient motor market is projected to reach USD 47.34 billion by 2027, growing at a CAGR of 6.52% from 2021 to 2027. Motors are the primary energy-consuming equipment in various industries, leading to high energy expenses for companies. To address this issue, many players in end-user industries are adopting energy-efficient techniques like the installation of energy-efficient motors in their operations. The global energy-efficient motor market is characterized by a high level of fragmentation, with numerous multinational and local vendors.
The sales of energy-efficient motors in the APAC region are expected to grow steadily due to increased infrastructure spending and industrial production. Nations like China and India will contribute significantly to the market’s growth, driven by infrastructure development in the industrial sector and engineering companies. North America, with its strong process manufacturing and oil and gas sectors, will continue to be a prominent market for energy-efficient motors. However, APAC and Europe remain the top two regions with tremendous potential for demand, particularly in the manufacturing industry.
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USD 32.4 billion in 2020
Efficiency, Application, End-Users, and Geography
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A significant economic challenge in promoting high- and premium-efficiency motors in the energy-efficient motor market is that motor buyers often have inaccurate perceptions of the expenses associated with motor ownership, leading to inadequate consideration of these costs. Operating the motor accounts for 97-98% of total expenditures, making it the most expensive part of motor ownership, while the initial acquisition cost only represents about 2-3%. Premium-efficiency motors are more expensive than regular motors by 15-25% or USD 8-40 more per horsepower, but their operational cost savings quickly make up for the higher upfront cost.
The average payback period for premium motors ranges from 7 months to 4 years. However, several factors such as annual usage hours, energy expenses, installation and downtime costs, and the availability of utility rebates influence the actual duration of the payback period.
While costs, including purchase, operation, installation, and maintenance, play a significant role, they should be balanced against other factors such as reliability, secondary benefits like reduced equipment wear or operating noise, and potential drawbacks like frequency disruptions and reduced mechanical power that can be utilized.
The robotics industry is witnessing rapid growth globally and is being considered as a replacement for human labor. It is in high demand due to its utility, efficiency, accuracy, and cost-effectiveness. Various industries are exploring robotics and automation to reduce costs. For example, healthcare, agriculture, food preparation, manufacturing, and defense industries see significant potential in robotics.
Robotics is also gaining popularity due to its environmental friendliness, as it operates on electricity without the need for fuel. With the uncertainty and volatility of fuel prices, manufacturers are looking for more energy-efficient alternatives, with robotics being one of the top choices. This increased demand for robotics is expected to drive the demand for energy-efficient motors, leading to the growth of the energy-efficient motor market.
Greenhouse gas emissions and global warming pose a significant threat to the world, prompting governments to take action. Various companies are also finding ways to reduce emissions as industries are major sources of greenhouse gases. Government bodies and concerned organizations are pressuring companies to address this issue. Switching to energy-efficient motors in the energy-efficient motor market is one of the best steps companies can take to become more energy-efficient and mitigate greenhouse gas emissions.
The high cost of copper, a precious metal commonly used in motors, is mainly due to the expensive extraction process. Mining requires substantial upfront capital investments known as CapEx, which include developing and building mines, as well as constructing infrastructure like roads, trains, power plants, and seaports. Moreover, ongoing operating costs, referred to as OPEX, contribute to the overall expenses. These factors hinder the growth of the global energy-efficient motor market.
The market is segmented based on various factors, including efficiency, application, end-users, and geography.
Segmentation by Efficiency
Segmentation by Application
Segmentation by End-Users
Segmentation by Geography
North America – US, Canada
Europe – Germany, France, UK, Italy, Spain
APAC – China, Japan, India, South Korea, Australia
Latin America – Brazil, Mexico,
Middle East & Africa – Saudi Arabia, Turkey
The updated IEC standard includes IE1, IE2, IE3, and IE4 in the low-voltage AC motor segment. Most industrialized economies have implemented minimum energy efficiency standards (MEPS), which serve as standard efficiency regulations. These regulations ensure consistency in product performance and quality across regions. In addition to MEPS, some economies are considering measures to encourage the replacement of inefficient motors with efficient ones, thereby complementing the existing standards.
The growth of the global energy efficient motor market is driven by several key factors. Firstly, there is a strong focus on energy savings and the resulting cost reductions compared to conventional motors. Policymakers around the world are also providing increased funding for energy-efficient motors. The need to reduce the greenhouse effect and promote environmental sustainability further supports the adoption of energy-efficient motors. The implementation of these motors in the manufacturing sector is another contributing factor. However, the high cost of premium performance (IE4) motors remains a significant barrier to their widespread adoption in the energy efficient motor market.
In terms of applications, the global energy efficient motor market is segmented into pumps, fans, compressors, and others. The pump segment holds the largest share in the market and is projected to grow at a CAGR of 7.4% during the forecast period. This growth is driven by the agricultural and oil and gas industries. Fans are the second-largest application segment and are used across various sectors, including residential, commercial, and others. Conveyors represent another significant application, with demand coming from industrial usage as well as commercial spaces such as airports.
The industrial sector is the largest end-user of energy efficient motors, contributing the most to the industry’s value. Motors are extensively used in factories and manufacturing facilities. More than 53% of global energy consumption in the industrial sector is attributed to electric motors. Switching to energy-efficient motors can help reduce energy consumption and contribute to a more sustainable future. The residential and commercial segments also benefit from the adoption of energy-efficient motors. Appliances used in homes, such as washing machines and food processors, rely on motors. Commercial spaces utilize motors in various applications, including ATMs, lifts, elevators, and escalators. Other sectors, such as agriculture, also contribute to the demand for energy efficient motors.
In 2021, there was significant demand for motors in various countries, although some experienced lower requirements due to economic disruptions and reduced industrial productivity. Germany, the US, the UK, and other countries have adopted higher-efficiency motors like IE3 and IE4 AC motors, which have driven market growth. However, investor confidence declined in many countries due to the COVID-19 pandemic, particularly in the US, the UK, India, Brazil, and Italy, where the number of active cases remained high, hampering economic recovery.
The APAC region dominates the global energy efficient motor market, with a market value of USD 10.63 billion in 2021. The adoption of industrial automation, along with activities in manufacturing, construction, power generation, and mining, drives the market in this region. Urbanization and industrialization in emerging countries like India contribute to the demand for energy-efficient motors in the automotive industry. Investments and expansions by vendors in emerging APAC nations play a crucial role in market strategies.
The North American market is growing at a CAGR of 6.78% during the forecast period. There is a strong emphasis on expanding oil reserves, including unconventional sources, which drives the need for energy-efficient motors in the region. The US accounts for a significant share of the global energy efficient motor market and generates over one-third of the revenues in North America.
In 2021, there has been substantial demand for motors in various countries, although some countries have experienced a reduced need due to economic disruptions and slower industrial productivity. Countries such as Germany, the US, and the UK have adopted higher-efficiency motors like IE3 and IE4 AC motors, thereby driving growth in their energy efficient motor market. The COVID-19 pandemic has led to a decline in investor confidence in many countries worldwide, as the increase in active cases in the US, the UK, India, Brazil, and Italy has significantly hindered economic recovery.
Prominent companies including ABB, Siemens, Johnson Electric, and Mitsubishi are actively exploring opportunities in the global energy efficient motor market. These companies have established a global presence in at least three major geographical regions: North America, APAC, and Europe. However, local vendors are selling similar products at lower prices.
The broader manufacturing industry relies on multiple countries to procure raw materials, aiming to minimize the cost of goods sold (COGS) and maintain an uninterrupted supply chain. The situation has worsened following the COVID-19 pandemic, with the suspension of commercial flights and restrictions on cross-border trade limited to essential items only. Trade-related issues between China and the US are projected to deteriorate further, impacting the dynamics of the energy efficient motor market. Consequently, manufacturing companies are expected to modify their procurement models to mitigate the risk of limited access to international suppliers.
Key companies profiled in this report include ABB, CG Power and Industrial Solutions, Regal Beloit Corporation, Siemens, WEG, Brook Crompton, Bharat Bijlee Limited, Havells India Limited, General Electric, Toshiba International Corporation, Mitsubishi Electric Corporation, Laxmi Hydraulics, NIDEC CORPORATION, Regal Beloit, Rockwell Automation, ebm-papst, Regal Rexnord Corporation, Emerson Electric Co., Kirloskar Electric Company.
Key Questions Answered
In 2021, there was varying demand for motors across different countries. Some countries experienced a higher demand, while others had a lower requirement due to economic disruptions and slower industrial productivity. Countries like Germany, the US, and the UK have embraced higher-efficiency motors such as IE3 and IE4 AC motors, contributing to the growth of their energy efficient motor market. However, investor confidence declined globally as a result of the COVID-19 pandemic. The increase in active cases in countries like the US, the UK, India, Brazil, and Italy had a significant impact on the economic recovery.
Major companies such as ABB, Siemens, Johnson Electric, and Mitsubishi are actively participating in the global energy efficient motor market. These companies have a strong presence in North America, APAC, and Europe. However, local vendors are offering similar products at lower prices.
The manufacturing industry heavily relies on multiple countries for the procurement of raw materials, aiming to keep the cost of goods sold (COGS) low and ensure a steady supply chain. The situation worsened after the COVID-19 pandemic, with the shutdown of commercial flights and limitations on cross-border trade to essential commodities. Trade-related issues between China and the US are expected to further deteriorate and impact the dynamics of the energy efficient motor market. Consequently, manufacturing companies are likely to change their procurement models to mitigate the risk of limited access to international suppliers.