Market Trends of Magnet Wire Industry
Growing Electric Vehicles Market
- The wire used for winding in electrical equipment is known as magnet wire. The magnet wire is used for interchanging electrical energy with magnetic energy.
- It is a type of copper wire coated with a layer of insulation. It is commonly used in electric vehicle motors due to its superior electrical conductivity and thermal resistance properties. The insulation on the wire helps to prevent short circuits and ensures optimal performance of the EV motor.
- Further, electric vehicle motors strive for high speed, high power density, lightweight and miniaturization, and high reliability.
- Electric vehicles are the essential solution for decarbonizing road transport, which accounts for a considerable portion of worldwide emissions. The sales of electric vehicles expanded exponentially in recent years, owing to the enhanced range, wider model availability, and improved vehicle performance.
- The Chinese government set a target of having 40% of electric vehicles sold in the country by 2030, which implies that a lot more vehicles will need to be charged. Furthermore, the nationwide pilot program, announced by China's Ministry of Industry and Information Technology and seven other organizations, intends to electrify vehicles used by government departments, city buses, and taxis. Vehicles for sanitation, postal services, intercity freight, and airport services are also on the agenda.
- According to California's Advanced Clean Cars II Regulations, all new passenger cars sold must include zero emissions by 2035. Beginning with the 2026 model year and continuing until 2035, the Advanced Clean Cars II rules will rapidly reduce light-duty passenger vehicle, pickup truck, and SUV emissions.
- The Indian government introduced a few incentives to promote the adoption of EVs, including subsidies on the purchase of EVs, tax exemptions, and the setting of ambitious EV sales targets. These incentives helped to drive the growth of the industry and attracted investment from domestic and international companies.
- In May 2023, Tesla presented its plans to establish a plant in India to manufacture electric cars for local and international sales, which would significantly boost the country's EV industry. Furthermore, the company planned to establish a new manufacturing site near its Gigafactory in Shanghai, China, in May 2022, with an annual capacity of 450,000 vehicles.
- A Mexican Governor, in May 2023, revealed Kia’s plans to invest around USD 1 billion for building a new electric vehicle plant in Northern Mexico.
- Therefore, considering the factors above, the demand for magnet wire is expected to rise in the electric vehicles industry significantly in the near future.
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Asia-Pacific Region to Dominate the Market
- The Asia-Pacific region is expected to account for the largest market for magnet wire during the forecast period owing to expanding industrial sectors such as electrical and electronics and transportation etc. in major countries such as China, India, Japan, etc.
- The application of magnet wire in the electrical and electronics segment propels the market growth in the Asia-Pacific region. Several consumer products, such as inverters, air conditioners, toys, trimmers, fans, etc., carry magnet wire coil components.
- The demand for magnet wire from the energy sector also increased owing to the growing infrastructural advancements and the surge in the need for continuous power supply in households, industries, and other commercial setups, along with the growing use of portable energy-carrying electronic devices.
- The increasing usage and widening arena of application in the electrical and electronics industry is expected to drive the market studied during the forecast period.
- According to the Japan Electronics and Information Technology Industries Association (JEITA), the production by the global electronics and IT industry was estimated at USD 3,436.8 billion in 2022, registering a growth rate of 1% year on year, compared to USD 3,415.9 billion in 2021. Moreover, the industry is expected to reach USD 3,526.6 billion, with a growth rate of 3% year on year, by 2023.
- According to the India Brand Equity Foundation (IBEF), the Indian electronics manufacturing industry is expected to reach USD 520 billion by 2025. Electrical and electronics production in India is expected to increase rapidly due to government initiatives with policies, such as Make in India, National Policy of Electronics, Net Zero Imports in Electronics, and Zero Defect Zero Effect, which offer a commitment to growth in domestic manufacturing, lowering import dependence, energizing exports, and manufacturing, like the “Make in India” program to make the country self-reliant.
- All factors above are likely to fuel the growth of the Asia-Pacific magnet wire market over the forecast time frame.
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