BriefCASE: Electric motor market set to rocket - Mainland China leads, eAxle drives growth
Rapid expansion in the electric motor (e-motor) market is on the horizon, driven by the eAxle market and evolving technologies. As original equipment manufacturers increasingly keep design in-house but outsource production, which players stand to gain? S&P Global Mobility forecasts a fourfold increase in the e-motor market in the next 12 years, with expected production of over 120 million motors by 2034. The eAxle market is set to drive this growth, with its motor production share projected to increase from 38% in 2023 to 69% in 2034. Emerging technologies such as eBeam are gaining attention. This technology will likely be driven by the North American pickup market's loading/towing needs; additionally, it could potentially grow in the European van market and the pickup and van markets in Greater China. Hairpin winding technology is also on the rise due to its efficiency and power density, despite its intricate manufacturing process. It is anticipated to become the preferred choice for eAxle motors, with substantial growth in Europe and North America in the coming years. While rare earth-based magnet technology currently dominates, exploration of alternatives is underway to reduce this dependence. For instance, employing non-rare earth-based motors in secondary e-Axles, especially for 4-wheel-drive electric vehicles, could reduce the market share of motors needing rare earth elements from 78% to 60%. Make versus buy OEMs are increasingly relying on in-house manufacturing and continuous research and development to enhance e-motor technologies, reduce costs and improve product development time. While we project the majority of eAxle system integration to stay in-house until 2030, a new trend is emerging. OEMs are keeping design in-house but are outsourcing the production of motors or their subcomponents. This is achieved through strategic sourcing or alliances/joint ventures. This approach is evident in Japan and Korea, with South Asia and Europe likely to adopt this trend by 2035. North America, however, is projected to maintain its focus on in-house sourcing. Global investments and key players The e-motor market has seen global investments, with a boost in North America following the announcement of the Inflation Reduction Act. From 2023 to 2030, domestic OEMs such as Ford and General Motors (GM), alongside Asia-Pacific-based suppliers such as Aisin, Hitachi, Hyundai Mobis and JingJin Electric, should lead the increase in motor production. In-house production of e-drive components is a major focus for GM and Mercedes-Benz, both investing heavily and planning to expand their factory capacities. Similarly, Hyundai and Renault-Nissan-Mitsubishi are shifting more toward in-house e-motor production, reflecting the industry's emphasis on cost optimization and maintaining supply chain resilience. Dynamic sourcing strategies present opportunities for suppliers As motor design becomes more of an OEM responsibility and production volumes rise, the potential for outsourcing subcomponents grows. This leads to evolving dynamics in the motor supply and presents opportunities for tier 1 and 2 suppliers, especially in the production of rotors and stators. With companies like BorgWarner, ZF and Magna already bagging deals to supply e-motor components, and the rise in EV popularity, the production volume of e-motors is set to increase. This growth opens doors for suppliers to expand into the motor subcomponents market, offering opportunities to supply individual rotor and stator components to OEMs. |
This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.