Electric Motors for Electric Vehicle Market

Electric Motors for Electric Vehicle Market Outlook 2025 to 2035

The global electric motors for electric vehicle market is projected to increase from USD 27.9 billion in 2025 to USD 125.2 billion by 2035, with a CAGR of 16.1% during the forecast period. Growth is driven by increasing EV adoption driven by stringent emission norms, advancements in e-mobility technologies, and enhanced governmental incentives worldwide. People are becoming more aware of sustainability and energy efficiency, which is also making electric vehicles more popular. This, in turn, increases the need for advanced electric motors designed for EVs.

Metric	Value
Industry Size (2025E)	USD 27.9 billion
Industry Size (2035F)	USD 125.2 billion
CAGR (2025-2035)	16.1%

What are the Drivers of the Electric Motors for Electric Vehicle Market?

The growth of the electric motors market for electric vehicles is primarily fueled by the global shift toward environmentally sustainable transportation. Governments across Europe, North America, and the Asia-Pacific region are implementing stricter emission regulations while offering tax incentives, subsidies, and infrastructure investments to promote the adoption of electric vehicles. For instance, the European Union's target to achieve carbon neutrality by 2050 has significantly accelerated the deployment of electric vehicles, thereby driving up demand for efficient and high-performance electric motors.

Also, improvements in electric motor technologies, like the use of rare-earth materials, better cooling systems, and better torque-to-weight ratios, are making them much more popular in electric vehicles. The rise in demand for exceptional performance electric vehicles, like sports cars along with commercial vehicles, means that motors need to be more advanced so they can be more efficient and last longer.

Improvements in battery technology and the expansion of energy storage solutions have significantly enhanced the efficiency and performance of electric motors. This has created a mutually reinforcing relationship, advancements in batteries drive demand for high-performance motors, and vice versa. Additionally, the rapid development of charging infrastructure is making electric vehicles more practical and accessible, further accelerating their adoption and fueling growth in the electric motor market.

What are the Regional Trends of the Electric Motors for Electric Vehicle Market?

North America, particularly the U.S., is experiencing strong growth due to supportive policies like the Inflation Reduction Act, which offers significant tax incentives for electric vehicle purchases and infrastructure development. Leading automakers such as Tesla, General Motors, and Ford are heavily investing in EV manufacturing within the country, further driving demand for electric motors. The growing popularity of battery-electric SUVs and pickups is pushing advancements in motor technology to meet higher torque requirements. Additionally, Canada’s efforts to electrify public transport fleets are reinforcing regional momentum in the electric motor market.

Europe continues to lead the electric motor market, driven by stringent emission regulations such as the Euro 7 standards and ambitious zero-emission targets set by countries like Germany, the U.K., and France. Major automakers including BMW, Volkswagen, and Stellantis are increasing investments in R&D to develop electric motors internally. Additionally, the European Union’s push to reduce reliance on Chinese EV components is accelerating local manufacturing capabilities, further supporting the region’s market growth and technological independence.

China, Japan, and South Korea lead the Asia-Pacific region in electric vehicle (EV) production. China's dominance in making electric vehicles (EVs) and government rules about New Energy Vehicles (NEVs) are driving up demand for motors. This area is growing because Japan is good at technology and South Korea is good at coming up with new ways to combine batteries and motors. Companies like BYD, Nidec, and Hyundai are putting money into new motor technologies to keep Asia-Pacific at the top.

What are the Challenges and Restraining Factors of the Electric Motors for Electric Vehicle Market?

One of the biggest problems with the market for electric motors for electric vehicles is that they rely heavily on rare-earth materials, which are mostly found in China. Disruptions in the supply chain and tensions between countries can have a big effect on the costs and timelines of motor production. Also, ethical concerns about mining practices and their effects on the environment are another set of limits.

Making high-performance electric motors is hard because of things like thermal management and weight reduction, which need a lot of research and development money. It is hard for smaller manufacturers to compete with big ones because it is hard to get into the business of technology and capital.

Cost sensitivity among consumers in developing countries is still a problem because electric vehicles, and their motors, are still more expensive than gas-powered vehicles. Also, the fact that there aren't any standard rules for how efficient electric motors should be in different parts of the world makes it harder to plan for global growth.

Country-Wise Outlook

Countries	CAGR (2025-2035)
United States	15.0%
China	17.5%
Germany	16.1%

U.S.: Focus on Electrification Across Segments Spurs Market Demand

The U.S. is becoming an important market for electric motors used in electric vehicles (EVs) because of aggressive electrification plans for consumer, commercial, and government fleets. The Bipartisan Infrastructure Law and the Inflation Reduction Act both provide important federal funding for electric mobility manufacturing and research and development in the U.S. To get incentives, carmakers are increasing local production, which boosts demand for motors.

OEMs like Tesla are at the forefront of new in-house motor designs, while other companies work with specialized suppliers to make their motors more efficient. Motors with more torque and durability are needed for high-performance applications, especially in pickup trucks and SUVs. Building e-mobility hubs in Michigan, California, and Texas is making the supply chain stronger.

China: Leading in technology and policy Push Drive Growth

China's integrated supply chain and supportive government policies keep it in charge of the global EV and electric motor markets. The Made in China 2025 plan and NEV quotas have made it necessary for manufacturers to make more motors in China. Leading companies like BYD and NIO are coming up with new motor designs that have higher power densities and better thermal efficiencies.

China’s emphasis on vertical integration, from raw material sourcing to complete EV manufacturing, helps maintain low production costs. This advantage is further strengthened by extensive research and development in technologies like hub motors and permanent magnet synchronous motors (PMSMs). Meanwhile, in the U.S., the rapid expansion of charging infrastructure is closely aligned with the accelerating adoption of electric vehicles, sustaining strong demand for high-performance electric motors.

Germany: Engineering Excellence Drives Market Growth

The automotive industry in Germany is using its engineering skills to improve electric motor technologies. Germany is investing in its own motor designs that focus on sustainability and efficiency. The country is home to car makers like BMW, Mercedes-Benz, and Volkswagen. The government's Climate Action Plan 2050, which aims to reduce carbon emissions from transportation, makes this trend even stronger.

Automakers and tech companies are working together to come up with new ideas like axial flux motors that will help them use fewer rare-earth elements. Germany's position as a manufacturing and export center in Europe guarantees that this sector will keep growing. The market is also growing because more and more public transportation and logistics companies are using electric vehicles.

Category-Wise Analysis

Permanent Magnet Synchronous Motors (PMSM) to Exhibit Leading by Motor Type

PMSMs account for the largest revenue share in the electric motors for EVs market, owing to their superior efficiency, high power density, and compact design. Automakers prefer PMSMs for their ability to deliver consistent torque and performance in a wide range of EVs, including high-end passenger cars and SUVs. The use of rare-earth magnets further enhances performance, making PMSMs the preferred choice in most modern electric vehicles globally, especially in Europe and China.

BLDC motors are the fastest-growing, due to their widespread adoption in two-wheelers and entry-level EVs. Their lightweight structure, high efficiency, and minimal maintenance make them ideal for urban mobility solutions, especially in markets like India and Southeast Asia. As electric scooters and delivery bikes gain popularity, manufacturers are increasingly adopting BLDCs. Government subsidies for electric two-wheelers are accelerating this trend, contributing significantly to the rapid expansion of this motor type.

100-200 kw to Exhibit Leading by Power Output

Motors in the 100-200 kW range dominate the electric motors for EVs market , due to their optimal balance of performance and cost, making them suitable for mid-range and premium passenger cars and SUVs. Popular EVs like Tesla Model 3, Hyundai Ioniq 5, and Volkswagen ID series utilize motors in this category. Their capability to provide strong acceleration, highway performance, and manageable battery consumption makes them a popular choice for both consumers and automakers.

The above 200 kW segment is the fastest-growing, driven by increasing demand for high-performance EVs such as sports cars, pickups, and heavy-duty commercial vehicles. OEMs are focusing on motors that can deliver higher torque and speed, meeting consumer expectations for performance and towing capacity. This segment is also benefiting from luxury EV launches and the growing popularity of electric SUVs and trucks in North America and Europe, where power and endurance are critical selling points.

BEVs to Exhibit Leading by Vehicle Type

BEVs dominate the electric motors for EVs market, as they use electric propulsion exclusively, requiring one or more motors per vehicle. Increasing global regulations targeting emissions, combined with falling battery prices and robust charging infrastructure, have significantly boosted BEV adoption. Major automakers are focusing on BEV lineups to meet carbon neutrality goals, especially in Europe and China, resulting in higher demand for motors designed exclusively for these platforms.

FCEVs are the fastest-growing segment, particularly in regions like Japan, South Korea, and California, where hydrogen infrastructure development is advancing. FCEVs require electric motors to convert electrical energy into mechanical energy, similar to BEVs. The longer range and faster refueling capabilities of FCEVs make them attractive for commercial and fleet operations. As investments in hydrogen ecosystems rise, FCEVs are expected to expand their market presence, driving electric motor demand in this emerging segment.

Passenger Cars to Exhibit Leading by Application

Passenger cars dominate the electric motors for EVs market, due to the massive volume of EVs sold in this category. Governments worldwide offer incentives, tax rebates, and exemptions to promote EV purchases in the passenger segment. Leading brands such as Tesla, BYD, Hyundai, and BMW focus heavily on electrifying their passenger fleets. Growing consumer awareness of fuel savings and sustainability further strengthens this segment’s position as the leading revenue generator for electric motors.

Commercial electric vehicles are the fastest-growing segment, due to increased regulations on fleet emissions and rising fuel costs. Logistics companies and governments are rapidly adopting electric buses, vans, and trucks to meet environmental targets. This shift is driving demand for durable, high-performance electric motors that can handle long operational hours and heavy payloads. North America, Europe, and parts of Asia are investing in electrifying public and freight transportation, boosting motor sales in this segment.

Competitive Analysis

The electric motors for EVs market is becoming increasingly competitive, with key players focusing on vertical integration, developing their own technology, and forming partnerships. Innovations focus on making things work better, using fewer rare-earth materials, and adding digital monitoring systems for predictive maintenance.

To rely less on outside suppliers, big car companies are building more motor capabilities in-house. Tesla, Volkswagen, and GM are all building factories just for making motors. At the same time, motor experts like Nidec, Bosch, and Magna are working with OEMs to create custom solutions that fit with the changing designs of vehicles.

Axial flux motor designs that offer higher power densities in smaller sizes and the use of silicon carbide (SiC) inverters to improve the overall efficiency of the drivetrain are two new trends. After-sales services, like diagnostic software and lifetime warranties, can also help businesses stand out from the competition.

Key players in the market include, Nidec Corporation, BorgWarner Inc., Robert Bosch GmbH, Continental AG, Siemens AG, ZF Friedrichshafen AG, Hitachi Astemo Ltd., Mitsubishi Electric Corporation, Valeo SA, Yaskawa Electric Corporation, Dana Incorporated, and Toshiba Corporation

Recent Developments

• In January 2025, Nidec Corporation announced a new manufacturing plant in Poland dedicated to producing next-generation electric motors for European EV OEMs. This facility is expected to enhance supply chain resilience and reduce lead times.
• In March 2025, Bosch unveiled a new permanent magnet motor design with a 10% reduction in rare-earth material use and a 15% improvement in energy efficiency. This aligns with the EU’s sustainability goals.

Segmentation of Electric Motors for Electric Vehicle Market

• By Motor Type :

  • Permanent Magnet Synchronous Motor (PMSM)
  • Induction Motor (IM)
  • Brushless DC Motor (BLDC)
  • Others

• By Power Output :

  • Less than 100 kW
  • 100 kW to 200 kW
  • Above 200 kW

• By Vehicle Type :

  • Battery Electric Vehicle (BEV)
  • Plug-in Hybrid Electric Vehicle (PHEV)
  • Fuel Cell Electric Vehicle (FCEV)

• By Application :

  • Passenger Cars
  • Commercial Vehicles
  • Two-Wheelers
  • Others

• By Region :

  • North America
  • Latin America
  • Western Europe
  • Eastern Europe
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa