Industrial Electrification Market Expected to Reach $182.5 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Industrial Electrification Market," The industrial electrification market was valued at $83.5 billion in 2022, and is estimated to reach $182.5 billion by 2032, growing at a CAGR of 8.1% from 2023 to 2032. 

Industrial electrification is the process of incorporating electrical and electronic technologies into various industrial applications and processes to replace or enhance traditional mechanical, hydraulic, or pneumatic systems. It involves the use of electricity as the primary source of power for machinery, equipment, and automation in manufacturing, production, and other industrial sectors. Industrial electrification aims to improve efficiency, precision, and sustainability in industrial operations, often resulting in reduced energy consumption and maintenance requirements. It also enables the integration of data and analytics into industrial processes, facilitating data-driven decision-making and process optimization.

Many industries are setting sustainability goals and striving to reduce their carbon footprint. Industrial electrification, especially when powered by renewable energy sources, contributes to these sustainability objectives.

One of the most significant contributions of industrial electrification is the reduction in greenhouse gas emissions. Electrifying industrial processes that were previously powered by fossil fuels can significantly lower carbon dioxide and other harmful emissions. This shift helps combat climate change and aligns with global efforts to reduce emissions. This factor may further aid the growth of the industrial electrification industry.

However, retrofitting existing industrial processes with electrification solutions can be complex and may require extensive modifications to existing systems. Integration challenges can lead to downtime and additional costs during the transition. This factor may restrain the industrial electrification market growth.

On the contrary, the industrial electrification market trends toward automation and Industry 4.0 concepts in manufacturing and industrial processes relies heavily on electrification. Electric systems are easier to automate and integrate with digital technologies for improved productivity and efficiency. This factor may surge the utilization of industrial electrification process across several types of industries: thus, creating remunerative industrial electrification market opportunities.

The industrial electrification market analysis is done based on segments such as product, application, and region. By product, the market is segregated into starter motors & alternators, electric pumps, electric power steering (EPS), integrated starter generator (ISG), and others. The motor and alternator segment dominated the global market, in terms of revenue in 2022. Modern vehicles are equipped with advanced electrical systems, including sophisticated infotainment systems, safety features, and telematics. These systems require a stable and reliable source of electrical power, which is provided by alternators. These factors altogether may surge the demand for starter motors and alternators; thus, fueling the growth of the industrial electrification market.

By application, the market is divided into automation & control, energy efficiency, data & analytics, and others. The industrial electrification market share is dominated by automation and control application segment, in terms of revenue in 2022. Industrial electrification offers high energy efficiency. Electric motors, devices, and control systems can be designed to operate with precision, reducing energy consumption. This aligns with global efforts to minimize energy use and reduce operational costs.

Furthermore, the demand for greener and more sustainable industrial practices has grown. Electrification allows for the integration of renewable energy sources, like solar and wind, into industrial processes. This supports environmental objectives by reducing greenhouse gas emissions and decreasing the reliance on fossil fuels. These factors altogether may augment the growth of the industrial electrification market for automation and control applications. The industrial electrification market forecast has been analyzed based on the rising adoption of newer technology and automation across the sectors coupled with rising industrialization.

Region wise, the industrial electrification market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. The Asia-Pacific industrial electrification market size is projected to grow at the highest CAGR during the forecast period and accounted for a major market share in 2022. Asia-Pacific has experienced rapid economic growth and urbanization. This growth is driving increased industrialization and energy demand, which, in turn, is boosting the market for industrial electrification.

Moreover, many countries in Asia-Pacific are investing in modernizing their manufacturing sectors by adopting electric machinery and automation technologies. This is aimed at improving productivity and energy efficiency. In addition, the region is increasingly investing in renewable energy sources such as solar, wind, and hydropower. This is driven by a combination of environmental concerns and a desire to reduce reliance on fossil fuels.

Furthermore, electric vehicles (EVs) and charging infrastructure have become more prevalent in Asia-Pacific. Industrial logistics and transportation companies are transitioning to electric and hybrid vehicles to reduce emissions. Altogether these factors may augment the growth of the industrial electrification market in Asia-Pacific.

Key players operating in the global industrial electrification market include BorgWarner Inc., DENSO CORPORATION, Johnson Electric Holdings Limited, AISIN CORPORATION, Bharat Bijlee Limited, Bonfiglioli Transmissions Private Limited, General Electric, Kirloskar Electric Company, ABB, and Continental AG.

Key Findings

• By product, the starter and motor segment is estimated to display the highest growth rate, in terms of revenue, registering a CAGR of 8.7% from 2023 to 2032.
• By application, the automation and control segment is estimated to display the highest growth rate, in terms of revenue, registering a CAGR of 8.3% from 2023 to 2032.
• Asia-Pacific garnered the highest share of morethan 35% in 2022, in terms of revenue, growing at a CAGR of 8.7%.