Traction Motor Market Trends

Market Driver - Increasing Demand for Electric Vehicles (EVs)

The automotive industry has seen rapid growth in demand for electric vehicles in recent years. Battery-powered EVs provide numerous benefits over internal combustion engine vehicles such as lower operating costs, less reliance on fossil fuels, and quieter operation.

Government policies promoting EVs have also driven this shift. Several countries and states/provinces have implemented subsidies, rebates or tax credits for EV purchases to help lower the upfront costs relative to gas vehicles. Manufacturers rising to meet the targets set out in these zero-emission regulations reinforces the long term outlook that EV growth has ahead of it.

On the production side, automakers have heavily invested in their electric lineups, planning dozens of new EV nameplates over the next few years. Mainstream brands are marketing EVs to the masses rather than just niche audiences. These factors alleviate barriers that may have existed previously in the traction motor market.

Market Driver - Rising Focus on Fuel Efficiency and Reducing Carbon Emissions

Tightening emissions regulations around the world have put pressure on automakers and suppliers to enhance fuel economy across their product portfolios. Transitioning to electrified systems is a practical way for manufacturers to comply with increasingly stringent Corporate Average Fuel Economy (CAFE) standards, and greenhouse gas limits. Hybrids, plug-in hybrids, and battery EVs help lower a company's fleetwide carbon footprint, avoiding substantial fines for falling short of these benchmarks.

In addition, climate change has risen up the public agenda. Younger generations in particular favor brands that demonstrate leadership on sustainability issues. Against this backdrop, automakers recognize putting greater numbers of EVs on the road as a necessity to appease regulators and retain licenses to sell in high-volume markets.

Pressure continues to mount on society from all angles to decarbonize at an escalating pace. Consequently, low-emission traction motors will play an important part in transport sector reductions over the coming decades.

Market Challenge - High Initial Costs for Implementing Traction Motor Technologies

One of the key challenges being faced by the traction motor market is the high initial costs associated with implementing new traction motor technologies. Transitioning to electrified powertrains requires significant investment in R&D to develop advanced traction motors as well as setting up manufacturing facilities which have the capability and scale to produce these specialized motors.

Traction motor manufacturers also face challenges related to developing ecosystems around new technologies and ensuring adequate support infrastructure is in place to provide parts, services and repairs for electric vehicles. With upfront costs being considerably higher compared to conventional internal combustion engine vehicles, it hampers the pace at which the traction motor market can transition to more sustainable powertrain options. Finding ways to reduce production costs through economies of scale, innovation, and supply chain integration will be important for the future growth prospects of the traction motor market.

Market Opportunity - Growing adoption of renewable energy sources for electric motors

One of the major opportunities for the traction motor market is the increased focus and support for renewable energy sources across the globe. Many countries are formulating policies and introducing regulations to expand the generation and adoption of renewable energy. This includes incentives for solar panels, wind power projects as well as investments in charging infrastructure for electric vehicles.

The growing integration of renewables into national power grids and their increasing cost competitiveness provides a reliable source of clean energy to power electric traction motors. As renewable energy starts meeting a larger portion of electricity demand, it can significantly boost the credentials of EVs and rail systems that rely on electric traction motors.

The ability of electric powertrains to leverage clean and indigenous renewable energy resources strengthens the business case for transitioning to electrified transportation. It also helps electric traction motor powered vehicles and equipment contribute to emissions reductions targets in the transportation sector.