Electric Drives Market Size, Share & Trends Analysis Report By Product Type (AC, DC), By Sales Channel (Direct, Indirect), By Voltage (Low, Medium), By App (F&B, Metal and Mining, Chemicals, Oil and Gas, Power Generation, Packaging, Cement, Textile, Water and Wastewater, Paper and Pulp, Rubber and Plastic, Forestry and Woodwork, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global electric drive market size was valued at USD 25.91 billion in 2024. It is estimated to reach USD 36.63 billion by 2032, growing at a CAGR of 4.42% during the forecast period (2024–2032). The market's expansion has been driven by an increase in demand for energy-efficient and ecologically friendly technology. Moreover, the growing popularity of electric vehicles and the demand for efficient motor control systems have aided the market's growth.  

Electric drives are systems designed to control the motion of electrical machines. Essentially, an electric drive is a system that uses an electric motor to manage mechanical movement. The primary components of an electric drive include the power modulator, the motor, the control unit, and the sensing units. The power modulator regulates the output power from the power source, while the control unit manages the power modulator's operation, typically at lower voltage and power levels. Sensing units monitor various drive parameters, such as motor current and speed, which are crucial for closed-loop control and system protection. Moreover, electric drives may incorporate other prime movers like diesel engines, gas turbines, steam turbines, steam engines, or hydraulic motors to provide the necessary mechanical energy for motion control.

Top 4 Key Highlights

• AC drives dominate the product type segment
• Low-voltage electric drive dominates the voltage segment
• Metal and mining dominate the end-user segment
• Asia-Pacific is the highest shareholder in the global market

Market Dynamics

Global Electric Drives Market Drivers

Increasing Adoption of Automation

The rising adoption of automation is a key driver for the global electric drives market as industries seek to boost productivity, efficiency, and cost-effectiveness. Automation is now essential across sectors such as manufacturing, automotive, energy, and material handling, aiming to meet growing demands for high-quality products while reducing human intervention. Electric drives are crucial for automating processes, offering precise control and efficient power transmission to motors and machinery. This is reflected by the surge in industrial robot installations, which is projected to reach 1.7 million units by 2025.

Additionally, electric drives enhance energy efficiency, potentially reducing energy consumption by up to 30% in industrial applications, according to the U.S. Department of Energy. Their role in renewable energy and electric vehicles aligns with sustainability goals and regulatory requirements. As automation and energy efficiency become increasingly important, the demand for electric drives is set to grow, creating opportunities for market players.

Significant Demand for AC Drives or VFD

The significant demand for AC drives, or variable frequency drives (VFDs), is a major driver for the electric drives market. AC drives offer precise speed and torque control for electric motors, enhancing energy efficiency and performance across industrial applications. Their adoption has surged in manufacturing, mining, oil and gas, and water management sectors, driven by the need for energy savings and cost reduction. The U.S. Department of Energy estimates that AC drives can cut energy consumption in motor systems by up to 50%, leading to substantial cost savings and lower carbon emissions.

Moreover, the growing focus on automation and process control further boosts AC drive demand, with global industrial robot installations projected to reach 1.7 million units by 2025. AC drives are also crucial in renewable energy, optimizing wind turbines and solar tracking systems. Therefore, industry standards from organizations like NEMA and IEC support their widespread adoption, highlighting their growing market presence.

Global Electric Drives Market Restraint

Unstable Demand from the Oil and Gas Industry

The unstable demand from the oil and gas industry is a significant restraint on the electric drives market. Electric drives are essential for controlling and optimizing equipment in oil and gas exploration, production, and transportation. However, the industry's volatility and fluctuating oil prices result in variable demand for these drives. The transition towards renewable energy sources and increased energy efficiency measures have led to reduced investments and capital expenditures in the oil and gas sector, affecting the demand for electric drives. The cyclical nature of the industry, combined with a growing emphasis on sustainability, introduces uncertainties in demand. As a result, manufacturers and suppliers of electric drives must diversify their portfolios and seek opportunities in other sectors to mitigate this restraint.

Global Electric Drives Market Opportunities

Future Potential for Integrated Motor Drive (IMD) 

Integrated Motor Drives (IMDs) represent a significant opportunity within the global electric drives market due to their compact, efficient, and intelligent design. By combining a motor and a variable frequency drive (VFD) into a single unit, IMDs offer several advantages that enhance their appeal across various industries.

One of the primary benefits of IMDs is their space-saving capability. According to a study by the National Electrical Manufacturers Association (NEMA), IMDs can reduce the overall system footprint by up to 40% compared to traditional motor and drive configurations. This is particularly valuable in industrial automation, where space is often limited. IMDs also provide notable improvements in energy efficiency. The elimination of long cable runs between the motor and drive reduces energy losses and heat dissipation. The U.S. Department of Energy reports that IMDs can achieve energy savings of up to 10% compared to conventional systems.

Industry associations such as NEMA and IEC are actively promoting IMDs through the development of standards and guidelines for their design, performance, and safety. This support further drives the adoption of IMDs across various sectors. As industries increasingly seek compact, energy-efficient solutions with advanced monitoring and control capabilities, the future potential for IMDs in the electric drives market is set to expand significantly. This presents lucrative opportunities for manufacturers and suppliers to capitalize on the growing demand for IMDs.

Regional Analysis

Based on region, the global market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

The Asia-Pacific region holds the largest share of the global electric drives market and is expected to experience substantial growth during the forecast period. This region, which includes key markets such as China, India, Japan, and South Korea, is a major player in the electric drive industry. As reported by the International Energy Agency (IEA), the Asia-Pacific region accounted for approximately 60% of global electricity demand in 2021. This high energy demand has driven the need for efficient energy management solutions, including electric drives. Rapid industrialization, urbanization, and infrastructure development across Asia-Pacific have significantly boosted the demand for electric drives in sectors such as manufacturing, automotive, and construction. Major automotive and electronics manufacturing hubs in China, Japan, and South Korea have further reinforced the region's dominance in the electric drives market.

Additionally, the region's focus on energy efficiency and sustainability has spurred the adoption of electric drives in renewable energy applications and transportation. For example, the International Renewable Energy Agency (IRENA) reported that Asia-Pacific accounted for 54% of the global installed capacity of renewable energy in 2020, highlighting the need for electric drives in wind turbines and solar tracking systems. Moreover, industry associations such as the China Electrical Equipment Industrial Association (CEEIA), the Japan Electrical Manufacturers' Association (JEMA), and the Indian Electrical & Electronics Manufacturers' Association (IEEMA) provide crucial insights into market trends, regulatory frameworks, and technological advancements, supporting the continued growth of the electric drives market in the Asia-Pacific region.

The European Union's focus on energy efficiency and carbon emission reduction has been instrumental in accelerating the adoption of electric drives. The EU's Energy Efficiency Directive and Ecodesign Regulations impose stringent standards for energy-efficient products, including electric drives, which has contributed to market growth in the region. According to the European Commission's Joint Research Centre, electric drives account for approximately 70% of industrial electricity consumption in the EU, underscoring their importance and market potential.

Industry associations such as the European Power Electronics and Drives Association (EPE), the European Committee of Manufacturers of Electrical Machines and Power Electronics (CEMEP), and the European Power Transmission Association (EURO TRANS) play a crucial role in advancing the development and standardization of electric drives. These organizations foster innovation and promote best practices, further supporting the growth and evolution of the electric drives market in Europe.

Segmental Analysis

The global electric drives market is segmented by product type, sales channel, voltage, and end-user.

Based on product type, the global market is bifurcated into AC and DC drives.

The AC drives segment leads the global market due to their crucial role in controlling the speed of electric motors. An AC drive, also known as a variable frequency drive (VFD), variable speed drive (VSD), or adjustable speed drive (ASD), adjusts the frequency, voltage, and magnetic flux of an electric motor to regulate its RPM. It operates by converting the AC supply to DC via a converter and then back to AC using an inverter, allowing precise control over motor speed.

AC drives are essential in various end-user industries, particularly in industrial sectors that predominantly use AC motors. They offer effective speed control and contribute to reduced energy consumption, which aligns with the growing focus on energy efficiency. As the demand for AC motors rises, so does the need for AC drives, driving their market growth.

Based on sales channels, the global market is divided into indirect and direct sales channels.

The direct sales channel segment is the leading revenue contributor in the electric drives market. This channel allows customers to purchase products directly from producers, bypassing intermediaries such as dealers or distributors. Many vendors in the electric drives sector offer their products through their own websites, enabling customers to avoid additional costs associated with intermediaries and contributing to the significant market share of direct sales. However, establishing direct sales channels can be costly and require substantial capital investment. Consequently, new entrants in the electric drives market often rely on indirect sales channels. This reliance on indirect channels may impact the growth of direct sales in the market.

Based on voltage, the global market is divided into medium and low-voltage electric drives.

The low-voltage electric drive segment is the largest contributor to the market. These drives operate at output voltages of 690 V or less. The technology involves converting the AC supply into DC voltage using a rectifier, which is then stored in a capacitor before being converted back into AC voltage. Moreover, the effectiveness of low-voltage electric drives is closely linked to the quality of their primary raw materials, including rectifiers, capacitors, and other components. The efficiency of these drives, whether high or low, directly impacts end-user demand. Consequently, the choice and quality of raw materials not only influence the performance of low-voltage electric drives but also affect procurement costs and market demand.

Based on end-users, the global market is segmented into F&B, metal and mining, chemicals, oil and gas, power generation, packaging, cement, textile, water and wastewater, paper and pulp, rubber and plastic, forestry and woodwork, and others.

The metals and mining segment holds the largest market share in the electric drives industry. This sector is highly fragmented and characterized by a few dominant players. Electric drives play a crucial role in the metals and mining industry by starting large motors and continuously adjusting their speed from extraction through to the finished product. Historically, DC motors were prevalent in this industry; however, they are increasingly being replaced by AC motors due to their superior efficiency and lower power consumption. Major operators in the metals and mining sectors are making substantial investments in electric drives to enhance reliability, reduce energy costs, and support greater automation and mechanization.

Recent Developments

• May 2024- Vitesco Technologies' electric drive system was selected for use in the Honda CR-V Plug-in FCEV. This collaboration highlights the growing adoption of electric drives in the automotive industry, contributing to the growth of the Global Electric Drives Market.
• May 2024- Ex-Tesla member, Faradion partnered with Indian EV maker Ola Electric to produce 98.5% efficient e-motors. This collaboration highlights the growing demand for high-efficiency electric drives in the Global Electric Drives Market, driven by the increasing adoption of electric vehicles and the need for sustainable energy solutions.