by Claudio Vittori & Darshak Parikh, Senior Technical Research Analyst | Powertrain & E-Mobility Component Research | Automotive, IHS Markit
The global automotive industry is witnessing massive transformation on all fronts. The increasingly stringent emission regulations coupled with demands for higher average corporate fuel economy have exacerbated the challenge, leading to higher demand as well as supply of electrified vehicles.
According to IHS Markit Supply Chain and Technology forecast, the global e-motor market witnessed the production of more than 10 million units in 2020, and the production volume is forecast to reach more than 90 million units in 2032, representing a CAGR of 17%.
The electric motors market can be summarized in four different domains on the basis of their location within the powertrain architecture. Categorization on the basis of propulsion system design or motor type will be inadequate, as the same motor type can cater to two completely different propulsion system applications, and for a given propulsion system design, the motor selection is not just limited to motor type but also takes into consideration factors such as performance, thermal and cost. The resulting e-motor families are engine-mounted motors, transmission-connected motors, e-axle motors, and hub motors.
Among these, the Engine mounted motor technology is primarily based on belt starter generator (BSG) technology. The BSG substitutes the conventional starter motor and generator (alternator) of the engine and performs their functions, as well as engine substituting functions such as stop-start, coasting, and electric torque and power boost. This technical solution has witnessed a sudden surge in demand because they provide a cost-effective means to achieve significant fuel savings compared to conventional vehicles, with minimum changes to the powertrain architecture. Engine mounted e-motors accounted for about 30% of the overall propulsion motors market in 2020, and the engine mounted e-motor market is expected to grow at 13% CAGR by 2032.
In the engine-mounted motors domain, the top-3 global suppliers together supplied for more than 75% of engine-mounted motor demand in 2020 and are expected to retain a majority of the market share going forward.
The transmission-connected electric motors alleviate some of the constraints associated with BSG architecture, deliver more power to complement the conventional powertrain, and increase the flexibility of the electric powertrain. This motor family largely caters to full or plug-in hybrid vehicles, and the motor location can be before or after the transmission, depending upon the powertrain architecture.
According to the IHS Markit supply chain technology forecast, the transmission-connected electric motors accounted for 45% of the propulsion motor market in 2020, and it is expected to grow at a CAGR of 16.7% by 2032.
Unlike other motor families, for the transmission-connected motor market, the Japan and South Korea region alone accounted for about 50% of the production volume in 2020. This is no surprise given these country's focus on full hybrid and plug-in hybrid vehicles. Further, the leading OEMs by volume accommodating transmission-connected motors in their electrified vehicle production as well as their key suppliers are also located in the Japan and South Korea region.
The third motor family, the E-axle motor, combines the individual electrified powertrain components in a single package to create a compact, lightweight, and efficient solution that provides both superior performance and higher efficiency. In the e-axle motor configuration, the electric motor is placed on the driving axle.
According to the IHS Markit supply chain technology forecast, e-axle motors accounted for about 25% of the propulsion motor market in 2020, and the market is expected to grow at a prolific CAGR of 20.1% by 2032, the highest growth segment among all propulsion motor families. This represents a significant market opportunity for all areas of the electric motor supply chain: electrical steel producers, copper winding producers, and aluminum casters.
In the E-axle motor market, both Europe and Greater China are leading E-axle motor production and are expected to account for more than 60% of the global production volume during the forecast period 2020-26.
The fourth motor family, Hub motors or in-wheel motors, allow the placement of the electric motor at the center of the wheel, reducing the components required in the transmission and energy losses associated with gears, bearings, and universal joins.
While hub motors, classified as P5 architecture, seem an attractive alternative to conventional powertrain architecture, they have evident shortcomings. Apart from the ubiquitous cost implications of technological advancements, the issue of adding to the unsprung weight of a vehicle has forever been detrimental to the popularization of hub motors. According to IHS Markit, hub motors will remain a niche segment in the global light vehicle market, and the annual volumes will remain below 0.1 million units for the most part of the decade.
Make or buy strategy
An important trend to look out for in the global e-motor supply chain market is in-house manufacturing vs. outsourcing the production of electric motors. The following graph outlines the make or buy trend of propulsion motors for the top 10 global OEMs. Until the year 2022, the global OEMs are expected to favor outsourcing over electric motors' in-house production. This period is often recognized as "Technical need", in which the most global OEMs will rely heavily on the suppliers for electric motors, given the latter's superior understanding of the underlying technology and OEM's limited and varying component demand.
Between 2022 to 2026, termed the "Supportive growth" phase, the share of electric motors built in-house will gradually increase. About 50% of the electric motors produced in 2026 will be in-house. During this time, the OEMs will develop the technology in-house, often with the help of suppliers via partnerships and mergers. Beyond2026, IHS Markit forecasts that OEMs will take the lead, and the share of in-house manufacturing of electric motors will increase significantly.