From hybrid vehicles to battery electric vehicles (BEVs) and fuel cell vehicles, electric motors (e-motors) play a crucial role in converting electricity into vehicle propulsion. In the United Kingdom, there is a significant opportunity to leverage existing expertise and capitalise on the growth in both domestic and export demand. With the European market for e-motors projected to expand to more than £27 billion over the next decade, a threefold increase, there exists a significant opportunity for the UK supply chain to get in on the action and establish itself as a recognised leader in motor design and production. Despite supply chain challenges, the UK boasts a thriving ecosystem which is poised to make the most of a shift in attitudes and focus in the automotive sector.
E-motors come in various designs, each with distinct advantages and disadvantages. Even within design families, there are choices related to wire winding and cooling mechanisms. Additionally, material selection plays a pivotal role. Considerations include substituting copper for aluminium or exploring different magnet materials, each with its own trade-offs.
Among these considerations, magnet materials stand out due to their significant impact on motor pricing. Magnet costs drive the cost of the motor, and that is an unstable cost. Therefore, building alternative supply chains will be central to maintaining cost competitiveness. This could involve material being processed in the UK for UK-made magnets, it could also involve secondary material from recycling. The UK is home to major players in both primary and secondary magnet material.
Permanent magnets, commonly used in e-motors, often contain rare earth elements (REEs), such as neodymium. China dominates the neodymium magnet market with an 85% share, which means that you’ve got a single source of failure.
However, new supply sources are emerging from Myanmar, the USA, Australia, and Canada. Pricing depends on relative prices of other rare earth elements associated with neodymium mining.
Rare Earth Element (REE) supply chains are pushing manufacturers to reduce their reliance on REEs by changing the magnet material content or moving to alternative motor designs, particularly in multi-motor drivetrains. Focusing existing expertise on other types of motors – such as induction-based and Electrically Excited Synchronous Motors (EESM) - could pay dividends for forward-thinkers in the space.
In addition to the £27 billion European market increase forecast, global demand for e motors for cars and vans will more than treble in the next ten years, including heavy duty demand, which will see a fourfold increase in motor demand.
There also exists an opportunity to collaborate in the material supply chain with innovators in the automotive ecosystem connecting with those in other sectors, namely aeronautical, marine, rail, and renewables, particularly regarding e-steel and copper. This would not only provide avenues for valuable knowledge sharing, but also signaling greater demand for such materials, and subsequently, e-motor technologies and associated materials and manufacturing supply chain.
A resilient material supply chain for e-steel and copper is critical for the e-motor industry. While neodymium-based magnet technology dominates the market there is innovation in alternative materials to reduce dependence on the rare earth supply chain, materials such as iron ferrite and iron nitride show promise.
A combined effort across multiple sectors, technologies and the supply chain would allow UK manufacturers to reduce the costs associated with motor construction, diversify revenue streams, and establish a robust supply chain. Importantly, it could also lower the carbon impact of producing electric motors.
The APC recently published an insight report titled “e-Motors Value Chain” which details our four key recommendations to realise the value-adds across the UK’s supply chain:
- Continue building scale- the UK has been successful in establishing scale in automotive traction e-motor assembly. The UK needs to continue to build upon that scale and drive connections
- Invest in material supply chains, specifically REEs, E-steel and copper
- Explore new markets, beyond automotive, identifying emerging sectors and international opportunities
- Cross-sector collaboration to aggregate demand and leverage investment
By 2035 demand for electric motors for UK vehicle production will be worth over£1.8bn, with over £150m of magnets needed for those e-motors. Ultimately, investment is needed across the supply chain to support further growth. The continued anchoring of manufacturing in the UK is critical to secure that investment. Those considering investment in building UK supply chain capability need clear demand signals from OEMs and e -motor manufacturers. They need to know there is a customer base waiting to switch to a UK supply chain.
Our latest e-motor value chain report is just one in an ongoing series of regular industry insight reports from the APC’s Technology Trends team, all of which are available for free on the website
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