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European market for EV motors is growing by 50% a year

18 May, 2012

The European market for traction motors for electric vehicles (EVs) and hybrid electric vehicles (HEVs) will grow at a compound annual growth rate (CAGR) of 50% in the period to 2017, a new report predicts.

Frost & Sullivan expects permanent magnet motors to dominate the market because of their performance and efficiency, but adds that the growing concern over the availability and pricing of rare-earth metals will open up the market for other technologies such as induction and hybrid motors.

The study finds that in 2010 the market earned revenues worth €55m and predicts that this will rise to $1.6bn by 2017 as emission regulations and government incentives encourage vehicle manufacturers to offer more hybrid and electric vehicles. By 2017, there will be an annual demand for more than 2.6 million traction motors in Europe.

F&S reports that 30-40% of automotive manufacturers that are currently buying motors from external suppliers are planning to bring the intelligence in-house.

“While some vehicle manufacturers are working with more than one supplier on the development of electric motors, others are choosing to develop it in-house,” says Frost & Sullivan team leader, Anjan Hemanth Kumar. “Reliability, strong R&D, a smooth supply chain and tight quality control, coupled with state-of-the-art manufacturing procedures and facilities, are some of the key sourcing criteria for vehicle manufacturers.”

Starting this year, European car-makers have to bring down their fleet’s average CO2 emissions. Also, most EU-15 states are offering incentives to encourage EV purchases. In response, car-makers have adopted different strategies to reduce CO2 emissions, with most of them preferring powertrain electrification to other technologies.

However, the high retail prices of hybrid and electric vehicles require the manufacturers to bridge the cost gap between EVs and their conventional equivalents. Most car-makers do not have strong in-house capabilities in EV technologies such as traction motors and advanced batteries and are wary of moving away from the internal combustion engine – a century-old technology with a strong infrastructure.

F&S says that EV powertrains offer opportunities for electric motor manufacturers. In the short-term, automotive manufacturers are looking to contract specialist EV system developers to integrate systems into their vehicles. In the medium- to long-term, the preference will be for Tier 1 suppliers. OEMs that develop in-house electric motor capabilities are likely to retain their design and intelligence capabilities, but to source the modules and components externally.

“Electric motors represent an advanced technology that will prove critical to the success of greener vehicles,” Kumar concludes. “They will undoubtedly open doors of opportunity down the supply chain.”

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