Europe Electric Motors for Electric Vehicle Market - Growth, Trends, and Forecasts (2022 - 2027)

The European electric motors for the electric vehicle market are valued at USD 126.85 billion in 2021 and are expected to surpass a net valuation of USD 276.53 billion by 2027 end, registering a solid CAGR growth of 13.87% over the forecast period.

Electric vehicles are witnessing significant growth owing to the need for addressing future energy requirements. The need to attain sustainable transportation plays a significant role in driving electric vehicle demand. Electric vehicles are coming up as an integral part of the automotive industry and represent a pathway towards achieving energy efficiency along with reduced emissions of pollutants and other greenhouse gasses.

Electric motors are the main component in the powertrain of any electric vehicle since the competition in electric vehicles is getting intense between the vehicle manufacturers, the conventional vehicle manufacturers are jumping into the electric vehicles market to attain an added advantage over competitors.

Although, during COVID-19 the market witnessed a steady decline amid the supply chain challenges faced by distributors and suppliers in Europe. In addition, the impact of COVID-19 on the electric vehicle market was inevitable as it affected almost every other industry in the market. However, the electric vehicle (EVs) market is witnessing substantial growth owing to the swiftly escalating year-on-year adoption rate of mild-hybrid electric vehicles across Europe. Soon after Q1 2022, demand for electric vehicles elevated the adoption of electric motors in Europe which has taken the market again to the recovery phase. For instance, In Q1, 2022 Volkswagen Group which includes Volkswagen, Audi, Porsche, Skoda, and SEAT reported a net sale of 99,100 units under its BEV segment. This showcases a steep rise of 65.2 % year-on-year growth rate. In FY2021, Volkswagen Group sold a record-breaking number of its plug-in electric vehicles roughly 762,400 units.

Further, over the longer-term forecast period, increasing environmental concerns coupled with favorable government initiatives and policies are some of the major factors driving the market growth. Rising energy costs and competition among emerging energy efficiency technologies have also been driving the market growth.

Government policies played a huge role in promoting electric vehicles. The results can be witnessed in many European countries, where electric vehicles have occupied a significant portion of the total vehicle population. Norway and France are positioned to take the leading role in the electric vehicle industry, owing to the supporting government policies.

Considering the aforementioned factors and developments, demand for electric motors is expected to remain on the positive side over the forecast period.

Key Market Trends

Passenger cars Captures Major Share in Market

Passenger cars capture a dominant share in the electric motor market for electric vehicles, as OEMs continue to plan to invest hugely in research and development for the development of the next-gen electric vehicle.

The European automotive industry offers a broad portfolio of technologies for electrified vehicles and adopts most advanced technologies in-vehicle systems. Daimler, Volkswagen Group, ZF Friedrichshafen, and Robert Bosch are the major players in the growing trend of vehicle electrification solutions and continue to expand to get ahead in the fastest-growing electric vehicle market in Europe.

Europe has witnessed a surge in electric passenger car registration during the year 2020. A significant increase from 3.5% to 11% has been registered in the total new electric passenger car registration, accounting for 6% of total new car registration.

Many automobile manufacturing companies are likely to monetize the outpouring opportunities in Europe by gradually including sustainable mobility vehicles in their portfolio. For instance,

• In March 2022, Ford Motors announced to include three all-electric passenger vehicles in Europe by the end of 2024 and set a target to sell more than 600,000 electric vehicles annually by 2026 in the Europe region.
• In January 2022, General Motors announced considering investing more than USD 4 billion in two Michigan factories to increase its electric car manufacturing capacity. GM and LG Energy Solution have proposed constructing a USD 2.5 billion battery facility in Lansing.

Moreover, growing initiatives across the globe by regional governments to develop charging infrastructure and investment plans by key players to develop EV technology is anticipated to boost the demand for electric vehicles in Europe which acts as a growth lever for electric motor demand in the long term forecast period.

Germany to Drive the Market Growth

After China, Germany is the world's second-largest single market for electric vehicles. BEVs and plug-in hybrids (PHEVs) make for 19 percent of the European automotive market, with Germany accounting for 30% of that total. Germany's new electric passenger car registrations grew by 83.3 percent to 355,961 battery-electric vehicles in 2021. This increased the percentage of electric cars in the German new car market from 6.65% in 2020 to a new high of 13.6 percent in 2021.

In March 2021, Germany has started a major investment program in electric car charging infrastructure to meet its 2030 goal of 10 million electric vehicles and one million charging stations on German highways. The program will also EUR 5.5 billion (USD 6.5 billion) of funding for electric-car charging infrastructure

The country also offers considerable tax reductions and incentives for electric car and charging station purchases. New electric automobiles costing less than 40,000EUR are eligible for a 9,000EUR government refund, while a 900EUR subsidy from the state-owned development bank is available for the construction of a private electric car charging station. In 2021, German electric car buyers continued to benefit from generous subsidies. Owing to the larger market potential, key OEMs are pushing investments in the country to gain significant market share. For instance,

• In March 2022, Volkswagen announced that it is investing EUR 35 billion to build new EV plant in Wolfsburg, Germany. The new plant will focus on mass-market "Trinity" vehicles, which are the centrepiece of Volkswagen's new all-electric fleet.
• In March 2022, Tesla has inaugurated the fourth Gigafactory in Berlin, which is also the first in Europe. Annually, the Tesla Giga Berlin project is expected to produce up to 5,00,000 automobiles.

The rising electric vehicle demand and sales has fueled the adoption of electric motors as well. for instance, in July 2022, The German component manufacturer Mahle has developed an electric motor that has an ability to work continuously under a load of more than 90% during its peak. In addition, this superior continuous torque (SCT) electric motor avoids overheating and is compact and light, which makes it cheaper and reliable for passenger car segment.

Considering this ongoing development in the electric vehicles landscape, demand for electric motors in Germany is expected to remain on positive side of the graph.

Competitive Landscape

The Europe electric motors for electric vehicle market is moderately fragmented due to the presence of many local and global players, such as Robert Bosch GmbH, Continental AG, and Siemens AG. The market is transforming at a rapid pace, and local companies are facing tough companies from foreign players. As a result, companies are increasing investment in R&D projects to provide the best technology to car manufacturers. For instance,

• In April 2021, Japan's Nidec Corporation announced that the company has opened new offices in Serbia and is setting up two new factories in the city to expand its electric motor manufacturer in the European electric vehicle market.

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