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.

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