Energy Efficient Motor Market Size, Share & Industry Analysis, By Efficiency Level (IE1, IE2, IE3, and IE4), By Product Type (AC Motor and DC Motor), By Application (Pumps, Fans, Compressor, Refrigeration, Material Handling, Material Processing, and Others), By End-User (Residential, Commercial, Industrial, Agriculture, Transportation, and Others), and Regional Forecast, 2024-2032

The global energy efficient motor market size was valued at USD 48.25 billion in 2023. The market is projected to grow from USD 51.65 billion in 2024 to USD 84.72 billion by 2032, exhibiting a CAGR of 6.38% during the forecast period.

An energy efficient motor is a type of electric motor that consumes low energy to deliver the required mechanical power output. The manufacturing of this motor consists of higher quality and thinner steel laminations in the stator and contains more copper in the winding than a conventional motor. The energy-efficient motor has an improved motor design and high-quality materials to reduce motor losses, thereby improving its efficiency.

The COVID-19 pandemic negatively impacted the energy-efficient motor market growth due to the imposition of lockdowns and several other COVID-19-related regulations. The imposition of lockdowns resulted in the temporary shutdown of numerous commercial and industrial organizations, leading to a halt in manufacturing processes and office work. Thus, the requirement for energy-efficient motors decreased in these industries, further creating a negative impact on the global energy efficient motor market growth.

Energy Efficient Motor Market Trends

Stringent Government Regulations for Energy-efficient Motors to Enhance Market Growth

Governments of countries across the world have been amending and enforcing regulations to curb carbon emissions and promote energy efficiency across industries. These regulations include setting minimum efficiency standards for manufacturing and adoption of motors. Agencies, such as the U.S. Department of Energy (DOE) and the European Union's Eco-design directive establish minimum efficiency requirements for motors sold in their respective markets. Manufacturers must meet these standards to access these markets, driving the development and adoption of energy-efficient motor technologies. For instance, electric induction motors with a rated output ranging from 75 kW to 200 kW must comply with the efficiency standards of class IE4 (or higher) within the European Union. Thus, the evolving government regulations for mandating energy efficient motor integration is projected to fuel the energy efficient motor in the coming years.

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Energy Efficient Motor Market Growth Factors

Rising Establishment of Sustainability Goals by Companies to Lead Market Growth

Corporate sustainability goals play a crucial role in driving the adoption of energy-efficient motors. Businesses and the industrial sector across the globe are increasingly recognizing the importance of sustainable practices and setting ambitious targets to reduce their environmental impact and improve their overall sustainability performance. For instance, in October 2019, DuPont announced its 2030 Sustainability Goals, highlighting the critical role of sustainability in achieving its mission of providing essential innovations to support societal prosperity. Energy-efficient motors could play a key role in achieving these goals due to their ability to significantly reduce energy consumption and reduce greenhouse gas emissions. Additionally, the use of these motors helps companies achieve certifications and adhere to international standards, such as ISO 50001 for energy management systems, which enhance their market reputation and goodwill.

Energy Efficient Motor’s Cost Saving Benefits Propel Product Demand

Energy-efficient motors consume less electricity as compared to standard motors, leading to a considerable reduction in energy bills. Over time, the lower operational costs can offset the initial higher investment in energy-efficient technology. This is particularly important for industries with high energy demands, where even small efficiency improvements can transform into significant financial savings. The revised regulation for more efficient motors in the EU is expected to increase annual energy savings from 46 TWh in 2020 to 106 TWh by 2030, which is equivalent to the electricity consumption of the Netherlands. This will decrease CO2 emission by 40 million tons annually and reduce energy bills by approximately USD 21.65 billion per year. Additionally, energy-efficient motors have a longer lifespan and require less maintenance, further reducing costs associated with repairs and downtime. The overall reduction in operating expenses enhances profitability, making energy-efficient motors a better option for businesses aiming to improve their bottom line while also benefiting from the environmental advantages of reduced energy consumption. Precisely, this has led to growing demand for energy efficient solutions globally.

RESTRAINING FACTORS

Lack of Government Mandates in Many Countries to Restrain Market Growth

The governments of the U.S., China, the European Union, and many other nations with high economic growth have formulated regulations for the compulsory adoption of motors with energy efficiency. These efforts have been taken to reduce carbon emissions by lowering the consumption of electricity. However, many countries in Africa, Asia Pacific, and South America still don’t have regulations mandating the efficiency levels for electric motors. This factor poses a significant challenge to the adoption of energy efficient motors. Without regulatory requirements or incentives to encourage the use of these motors, businesses and consumers may prioritize short-term cost savings over long-term energy efficiency benefits. This results in a continued reliance on less efficient motor technologies, leading to higher energy consumption, increased greenhouse gas emissions, and higher operating costs, further limiting the energy efficient motor market growth during the forecast period.

Energy Efficient Motor Market Segmentation Analysis

By Efficiency Level Analysis

IE2 Holds Dominant Market Presence Due to its High Durability

Based on energy efficiency level, the market is segmented into IE1, IE2, IE3, and IE4. The IE2 segment holds the dominant share of the market due to the presence of government regulations in various countries with respect to the adoption of motors with IE2 efficiency level. IE2 motors offer significant energy savings compared to lower-efficiency motors, such as IE1 and standard motors. In addition, IE2 motors incur lower initial cost compared to their higher efficiency classes, such as IE3 or IE4, which makes them an attractive option for small-scale companies and the residential sector.

The IE3 segment is expected to grow at the fastest rate in the coming years owing to the rising government inclination toward IE3-level energy-efficient motors. IE3 motors also offer significant energy savings compared to lower-efficiency motors, such as IE2 and IE1, which can result in their increased adoption during the forecast period.

By Product Type Analysis

AC Motors Account for Major Market Share Due to Their Versatile Applications

Based on product type, the market is bifurcated into AC motor and DC motor. The AC motor segment is the most dominating and fastest-growing segment owing to its wider application across various industries, including HVAC systems, pumps, fans, and compressors. Moreover, the compatibility of AC motors with AC power grids, which is prevalent in most countries worldwide, has resulted in their increased installation.

The DC motor segment has a low market share owing to its limited use. It is mostly suitable for applications where speed adjustment is crucial, such as conveyor systems, cranes, and machine tools. The ability of these motors to vary speed efficiently and accurately enhances productivity and operational efficiency in these applications.

By Application Analysis

Pumps Account for Major Market Share Due to Rising Demand for Efficient Cooling Systems

Based on application, the market is divided into pumps, fans, compressor, refrigeration, material handling, material processing, and others. The pumps segment holds the dominant energy efficient motor market share due their growing requirement in industries, such as water & wastewater management, oil & gas, chemicals, power generation, and agriculture, among others. The surging population, urbanization, and industrialization are driving the need for efficient pumping systems to handle water supply, irrigation, sewage treatment, and industrial processes.

The refrigeration segment is projected to grow at the fastest rate in the energy efficient motor market due to rising global warming, which has necessitated the use of efficient cooling systems to keep various products safe. Moreover, with the globalization of food supply chains and the increasing demand for perishable goods worldwide, there is a growing need for efficient cold chain logistics. Refrigeration ensures the safe and reliable transport of temperature-sensitive products, such as food, pharmaceuticals, and chemicals across long distances.

By End-user Analysis

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Industrial Segment Leads Due to Product Application in Various Machinery and Equipment

By end-user, the market is segmented into residential, commercial, industrial, agriculture, transportation, and others. The industrial segment holds the largest market share due to the rising energy demand coupled by the growing integration of pumps, compressors, fans, machine tools, and other equipment in industries, such as oil & gas, chemicals, and manufacturing.

The commercial segment is expected to grow at the fastest rate owing to rising FDI in developing nations, such as India, Brazil, and others. Additionally, the governments of different countries are focusing on the expansion of IT, BFSI, and tourism industries, leading to the construction of commercial infrastructures and boosting the product’s adoption.

REGIONAL INSIGHTS

Geographically, the market is studied across North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

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Europe holds a major share of the market due to the presence of stringent regulations regarding the sales and adoption of electric motors. The European Union's Eco-Design Directive (2009/125/EC) and the Energy Efficiency Directive (2012/27/EU) have set minimum energy efficiency requirements for motors sold in the EU market. Additionally, it has been taking the necessary steps to increase the efficiency level of electric motors to IE4, which will boost the energy-efficient motor market in Europe.

North America is the second-leading region in the global energy efficient motor market. Organizations, such as the U.S. Department of Energy (DOE) and Natural Resources Canada (NRCan) have established minimum energy efficiency requirements for motors sold in the regional market. In addition, the presence of a vast industrial sector in the region has been one of the prime factors for the strong growth of the energy efficient motor market in North America.

Asia Pacific is the fastest growing region in the global market. It is undergoing rapid industrialization and urbanization, driving the demand for energy-efficient motors in various industries, such as manufacturing, construction, infrastructure development, and transportation.

Latin America is expected to grow steadily in the global market owing to the rising establishment of Minimum Energy Performance Standards (MEPS) for electric motors in Mexico, Brazil, and other countries.

The Middle East & Africa will also gain momentum in the market owing to the rising implementation of MEPS in Saudi Arabia and Egypt. In addition, the government's effort to decrease carbon emissions will also play a key role in the expansion of the market in the Middle East & Africa.

KEY INDUSTRY PLAYERS

Leading Players to Develop Advanced Technologies to Increase Energy Efficiency Of Motors and Fortify Their Market Position

Siemens continues to innovate with its SIMOTICS line of energy-efficient motors, which meet or exceed the IE3 and IE4 efficiency standards. These motors are designed for various applications, including industrial, infrastructure, and mobility sectors. In addition, Siemens aims to be carbon neutral by 2030 and promotes energy-efficient motors as part of its sustainability strategy.

LIST OF TOP ENERGY EFFICIENT MOTOR COMPANIES:

• GE (U.S.)


• Johnson Electric (Ireland)


• ABB (Switzerland)


• Crompton (India)


• Siemens (Germany)


• Rockwell Automation (U.S.)


• Toshiba (Japan)


• Kirloskar (India)


• Mitsubishi (Japan)


• Havells (India)


• Nidec Corporation (Japan)


• Regal Rexnord (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• April 2024 – ABB India launched new IEC Low Voltage IE4 cast iron super premium efficiency motors in frame sizes 71-132, along with IE3 Aluminum Motors in frame sizes 71-90. These motors are designed to provide reliable and energy-efficient solutions across various industries, such as water & wastewater, packaging, food & beverage, metals, cement & mining, plastics & rubber, and HVAC.


• July 2023 – ABB introduced the AMI 5800, a new generation NEMA modular induction motor designed to deliver outstanding energy efficiency and reliability in challenging applications, such as pumps, compressors, fans, extruders, conveyors, and crushers. With a power rating of up to 1750 HP, the AMI 5800 is highly modular and customizable, making it suitable for both new construction and upgrade projects across various industries. These include chemical, oil & gas, conventional power generation, mining, cement, and metals.


• February 2023 – Nidec Corporation launched the ID300 Perfectspeed, an IE4/IE5 SynRA motor integrated with the Nidec ID300 drive. This product allows commercial HVAC contractors and building maintenance staff to easily connect to building automation systems, offering substantial energy savings and low lifetime operational costs.


• March 2022 – Kirloskar introduced the KDI EE4 pump set, which features Ultra-Premium Efficiency and a high specific discharge, leading to a 16.5% reduction in energy consumption for pumping the same volume of liquid. Powered by an IE4 motor, the KDI EE4 pump set represents a significant advancement in the company’s dedication to providing superior customer value.


• March 2021 – Siemens unveiled the Simotics SD motor series at Hannover Messe 2021. These motors, part of the Digital Enterprise Virtual Experience, are available in the Super Premium Efficiency (IE4) class. They cover power ranges from 2.2 to 1,000 kW for 2 and 4 poles, from 75 kW for 6 poles, and from 55 kW for 8 poles. The Simotics SD IE4 motors exceed the ErP Directive 2019/1781 requirements for eco-design, effective from July 2021 and July 2023.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects, such as leading companies, product types, and top applications of the product. Besides, it offers insights into the market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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Report Scope & Segmentation