Energy Efficient Motor Market Size, Share, Growth, Analysis

The life cycle costs of motors encompass all expenses associated with an asset, from its initial purchase price to its end-of-life disposal. These costs include the purchase price, energy expenses, and maintenance fees. In recent years, the industrial sector has significantly increased its electricity consumption through electric motors. According to ABB, a leading manufacturer of electric motors based in Switzerland, over 40% of the total electricity consumed worldwide is used by the industrial sector, with two-thirds of that consumption attributed to electric motors. This statistic highlights the substantial potential for energy and cost savings through improved efficiency. Investing in energy-efficient motors can lead to significant energy savings and help achieve key efficiency goals. ABB also notes that high-efficiency motors and variable speed drives can save energy, often with a payback period of just 1 to 3 years, and in some cases, the payback period can be as short as a few months. Additionally, energy costs have been rising and are expected to continue increasing in the future. This trend makes it crucial for industries to address energy consumption as a solution to environmental challenges and resource scarcity. Consequently, the price of energy used to operate motors is becoming an increasingly important concern for industries.

Energy-efficient motors generally have a higher initial purchase cost compared to standard motors. This increased price is due to the use of high-quality materials and the optimized design and assembly processes that enhance efficiency. For instance, the rotor of these motors features larger diameter copper wires and additional aluminum to reduce resistance losses. Additionally, winding losses are minimized through the implementation of an optimized cooling fan. The superior materials and advanced manufacturing techniques required for energy-efficient motors lead to higher production costs for manufacturers. This, in turn, increases the prices that consumers must pay. On average, energy-efficient motors can be about 20% more expensive than regular models; however, actual prices may vary based on the manufacturer and market conditions. As a result, the higher purchase cost of energy-efficient motors is a significant barrier, particularly for small-scale users who may not be able to afford to install these motors in their facilities. Consequently, this issue contributes to the slow adoption of energy-saving motors.

Industrialization plays a crucial role in various companies operating in the global marketplace. Over the past decade, developing countries have experienced significant transformations due to the increasing adoption of effective and sustainable energy sources, improved labor productivity, and growth in exports of manufactured goods. The rise in industrialization worldwide is likely to drive the demand for energy-saving motors across a range of industries. As we look toward 2024, the major industrial powers will include China, the US, Japan, Germany, India, South Korea, and the UK, collectively accounting for the majority of global manufacturing output. According to the State Council of China, in 2025, the annual growth rate of value-added industrial output in China was 5.8%, an increase from 4.6% in 2023, with a year-on-year growth of 6.2% recorded in December. Similarly, the US reported a 2.0% annual growth in industrial production by January 2025, while Japan's industrial sector maintained a steady growth rate of 2.6% per year during the same period. India saw a strong recovery with a 5.0% year-on-year increase in January 2025, driven by enhanced manufacturing efforts. In Germany, industrial production increased by 1.2% monthly in May 2025; however, there was a decline of 1.4% in new orders, according to data from CEIC. Furthermore, the push for decarbonization across various industries has heightened the demand for energy-efficient systems and solutions, including electric motors.

The level of awareness regarding energy-efficient motors among various end users is currently low, but this situation is expected to improve over the next several years. Many end users lack sufficient information about the potential of these motors to save energy and the financial implications of excessive energy use. The challenges in obtaining information stem from a lack of clarity about the efficiency levels of motors, as well as insufficient details on the energy-saving benefits these motors provide. Key barriers to the adoption of energy-efficient motors include a lack of awareness regarding potential savings and returns on investment, along with a tendency to focus on lower upfront costs instead of considering the long-term benefits throughout the motor's lifecycle. As a result, energy-efficient motors have not been widely accepted by end users. However, an increasing wave of information is beginning to clarify these issues, and it is likely to lead to greater adoption of energy-efficient motors in the near future.