Market Trends of Electric Motors for Electric Vehicle Industry
This section covers the major market trends shaping the Electric Motors for Electric Vehicle Market according to our research experts:
Rising Demand for Electric Vehicles to Augment Growth of Market
The demand for electric motors is expected to increase exponentially, owing to the rapid growth of electric vehicle sales across China, the United States, Japan, South Korea, and Europe. Electric vehicle sales are rising exponentially worldwide due to government incentives offered by various Governments to promote electromobility, increasing environmental consciousness amongst general car buyers, and rising fuel prices. It is also due to lower operating costs provided by electric vehicles than traditional ICE vehicles and announcements by the governments of China and the EU to ban ICE mobility by 2035. For instance,
- In 2021, 6.9 million electric cars were registered worldwide, an increase of 107% from the previous year.
The primary factor driving the electric vehicle motor growth is the increase in demand for improving the electric vehicles driving range, which is, in turn, anticipated to positively impact the electric motors market growth for electric cars.
Moreover, governments worldwide have also been proactive in enacting policies to encourage the adoption of electric vehicles. China, India, France, and the United Kingdom have announced plans to phase out the petrol and diesel vehicles industry entirely before 2040. For instance,
- In October 2022, European Union announced the ban on the sale of new ICE vehicles from 2035 in EU member states.
- Europe announced a lofty target of being climate-neutral by 2050. The European Commission will publish several new legislative proposals to meet this goal over the next few years. Many of them are aimed at improving mobility. To achieve this aim, a set of policies and targets must be in place to guide states, businesses, and consumers on the correct path. European Commission earmarked EUR 20 billion (USD 21.2 billion) in the COVID-19 stimulus package of EUR 750 billion (USD 780 billion) for the faster and widespread adoption of clean mobility. It announced the promotion of sales of clean vehicles, including 30 million electric and 1 million hydrogen vehicles, in the EU by 2030.
- In September 2022, China announced that it had extended the tax exemption from a 5% purchase tax to new energy electric vehicles, including battery electric vehicles, hybrid vehicles, plug-in hybrid vehicles, and hydrogen fuel cell vehicles, till the end of 2023.
- In 2021, The Union government of India announced an extension of the second phase of the Faster Adoption and Manufacturing of Hybrid and Electric vehicle (FAME) scheme by two years to March 31, 2024. The plan aims at promoting sales of electric vehicle adoption and manufacturing of components related to EVs.
In addition, the government and private companies intend to build charging infrastructure worldwide to minimize emissions and keep the environment green. Thus, the rising demand for electric vehicles further aggravates the adoption of electric motors in cars, augmenting the manufacturing of electric motors during the forecast period.
Asia-Pacific Anticipated to Dominate the Market
Globally, Asia-Pacific is capturing the largest share of the electric motors for the electric vehicle market, owing to high EV sales, majorly from China. China and India are the most prominent manufacturers and consumers of electric vehicles in the Asia-Pacific. National sales targets, favorable laws, and municipal air-quality targets are supporting domestic demand in both these countries. For instance,
- The Government of India announced having 7000 e-Buses, five lakh e-3 wheelers, 55000 e-4 wheeler passenger cars (including strong hybrids), and ten lakh e-2 wheelers over the next three years under FAME II (Faster Adoption and Manufacturing of Hybrid Electric Vehicles) by 2022. INR 10000 Cr (USD 1.2 billion) was allocated to FAME II (Faster Adoption and Manufacturing of Hybrid Electric Vehicles).
- China imposed a quota on manufacturers of electric or hybrid vehicles, which must represent at least 10% of total new sales. Also, Beijing only issues 10,000 permits for registering combustion engine vehicles per month to encourage its inhabitants to switch to electric cars.
Electric vehicles are also posting huge annual sales gains in these countries, which will further drive the growth in the market for electric motors. For instance,
- 2.99 million passenger electric vehicles were sold in China in 2021, an increase of 169.1% over the last year, while in India, 17802 units of electric cars were sold in 2021, registering a growth of 168% over the previous year.
Thus the factors above are expected to maintain Asia-Pacific as the most dominant region for electric motors for electric vehicles market.
