The smart electric drive market has been gaining high traction over the recent past owing to the growing need for energy-efficient drives across various industrial applications. A smart electric drive system uses digital technologies like sensors, integrated circuits and software to optimize the control of electric motors. Modern electric drive solutions allow precise motor control and energy recovery, thereby enhancing productivity and reducing energy costs for industrial operations. The increasing focus on improving operational efficiency and reducing carbon footprint has propelled the adoption of smart drive systems across industries like oil & gas, mining, power generation, food & beverages and building automation.
The global smart electric drive market is estimated to be valued at US$ 22.03 billion in 2024 and is expected to exhibit a CAGR of 31% over the forecast period from 2024 to 2031.
Key Takeaways
Key players operating in the smart electric drive market are ABB, Aisin Corporation, Allis Electric, Siemens, Schneider Electric, Rockwell Automation, Mitsubishi Electric Corporation and Danfoss.
The rising Smart Electric Drive Market Size for energy savings across various industrial verticals along with government initiatives promoting renewable energy present lucrative opportunities for smart electric drive providers. Advancements in IoT connectivity and data analytics also allow these systems to offer predictive maintenance capabilities.
Globally, the Asia Pacific region dominates the market due to rapid industrialization and growth of process industries in China, India and Southeast Asian countries. Major players are expanding their manufacturing footprint in the region to tap the potential of emerging markets. North America and Europe are also projected to witness significant adoption of smart drive technology supported by stringent regulatory push for carbon emission reductions.
Market Drivers
The increasing focus on reducing energy consumption and operational costs across process industries is a major factor driving the adoption of smart electric drive systems. These solutions allow optimized motor control to achieve energy savings upto 15% compared to conventional VFD systems. Additionally, emerging technologies such as sensor fusion, AI/ML capabilities and cloud connectivity enable smart drives to significantly improve equipment uptime and asset utilization through predictive maintenance. The growing investments in industrial automation along with availability of attractive financing options for energy efficient upgrades are further propelling the smart electric drive market growth.
PEST Analysis
Political: Governments across the globe are promoting electric vehicles through tax benefits and subsidies to reduce vehicular emissions. This is positively impacting the growth of Smart Electric Drive Market Analysis.
Economic: With rising income levels and lower operating costs of electric vehicles, individual customers are showing high purchase intention for these vehicles which is fueling the demand for smart electric drives.
Social: Increasing awareness about environmental protection and sustainable mobility is driving more consumers to opt for electric vehicles instead of fuel-run cars. This advent of social change is benefiting the electric drive market.
Technological: Continuous innovation in battery technologies is enhancing the driving range of electric vehicles. Also, the integration of electric drives with telematics solutions is augmenting the growth of smart transportation systems.
Geographical Regions of Concentration
The smart electric drive market in terms of value is highly concentrated in Asia Pacific region primarily due to strong government support for electric vehicles and growing consumer affordability in countries like China and Japan. The region accounted for more than 40% share of the global market in 2024 led by the massive EV adoption in China.
Fastest Growing Regional Market
North America region is expected to witness the fastest growth in the smart electric drive market during the forecast period. This can be attributed to rising environmental concerns, increasing investments by leading automakers in developing advanced electric cars along with supportive policies by the US and Canadian governments for clean mobility solutions.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
About Author – Ravina Pandya
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