Electrical Steel for Electric Vehicle (EV) Market is experiencing remarkable growth, with a valuation of USD 1,730 million in 2024. According to the latest industry analysis, the market is projected to expand at a compound annual growth rate (CAGR) of 10.4%, reaching approximately USD 3,820 million by 2032. This surge is primarily driven by the accelerating global transition to electric mobility and stringent governmental regulations promoting sustainable transportation solutions.

Electrical steel, also known as silicon steel, plays a critical role in EV powertrains due to its superior magnetic properties. This specialized material, comprising iron alloyed with silicon, is engineered to minimize energy losses, making it indispensable for electric motors, converters, and other electromagnetic components in electric vehicles. The industry primarily segments electrical steel into non-grain-oriented (NGO) and grain-oriented (GO) variants, with NGO steel being the preferred choice for EV motors because of its isotropic magnetic characteristics.

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Market Overview & Regional Analysis

Asia-Pacific dominates the global electrical steel market for EVs, accounting for over 60% of production and consumption. This dominance stems from robust EV manufacturing activities in China, Japan, and South Korea, supported by favorable government policies and substantial investments in electric mobility infrastructure. China's Baowu Steel Group and TISCO lead regional production, supplying both domestic automakers like BYD and NIO, as well as international markets.

Europe follows closely, with Germany and France driving demand through stringent emissions regulations and subsidies for EV adoption. The region benefits from the presence of leading steel producers such as ThyssenKrupp and Voestalpine, who are developing advanced steel grades to meet the efficiency requirements of European automakers like BMW and Volkswagen. Meanwhile, North America is witnessing significant growth, particularly in the U.S. and Canada, where the Inflation Reduction Act and other policies are accelerating EV production.

Key Market Drivers and Opportunities

The market is propelled by multiple factors including the rapid expansion of global EV production, which is expected to reach 45 million units annually by 2030. Each electric vehicle requires between 50-100kg of electrical steel, creating massive demand as automakers scale up their EV portfolios. Technological advancements in motor efficiency are particularly significant, with new high-permeability grain-oriented steels enabling smaller, lighter motors that improve vehicle range and performance.

Emerging opportunities include the development of ultra-thin gauge electrical steel (below 0.2mm thickness) for high-speed motors and the increasing adoption of silicon-alloyed steels with superior magnetic properties. These innovations are creating new possibilities in premium EV segments and specialized applications such as electric aircraft. Additionally, the shift toward 800V battery systems in next-generation EVs is driving demand for steels that can operate efficiently at higher frequencies.

Challenges & Restraints

While the outlook is positive, the market faces several challenges. Supply chain vulnerabilities are particularly concerning, as the production of high-grade electrical steel depends on rare earth elements that are geographically concentrated and subject to price volatility. For instance, neodymium prices fluctuated by nearly 40% in 2023, creating uncertainty for manufacturers.

Production capacity presents another hurdle. The complex manufacturing process for grain-oriented electrical steel requires specialized equipment with lengthy lead times, making it difficult for producers to quickly scale up operations in response to surging demand. Furthermore, geopolitical tensions and trade restrictions are creating additional complexities in the global supply chain.

Market Segmentation by Type

• Non Grain-oriented Electrical Steel

• Grain-oriented Electrical Steel

Market Segmentation by Application

• Converter

• Electric Motor

• Others

Market Segmentation by Vehicle Type

• Battery Electric Vehicles (BEVs)

• Plug-in Hybrid Electric Vehicles (PHEVs)

• Hybrid Electric Vehicles (HEVs)

Market Segmentation by Grade

• High-grade

• Low-grade

Market Segmentation and Key Players

• ThyssenKrupp (Germany)

• ArcelorMittal (Luxembourg)

• Nippon Steel Corporation (Japan)

• POSCO (South Korea)

• Baowu Steel Group (China)

• Tata Steel (India)

• JFE Steel (Japan)

• AK Steel (U.S.)

• Voestalpine (Austria)

• Shougang Group (China)

• TISCO (China)

• NLMK Group (Russia)

• Ansteel Group (China)

• Benxi Steel Group (China)

Report Scope

This report provides a comprehensive analysis of the global electrical steel market for electric vehicles from 2024 to 2032. It includes detailed insights into:

• Market size, growth projections, and revenue forecasts

• Detailed segmentation by type, application, vehicle type, and grade

• Regional analysis covering North America, Europe, Asia-Pacific, and emerging markets

The report also features in-depth profiles of key industry players, examining:

• Company strategies and market positioning

• Product portfolios and technological capabilities

• Production capacities and operational metrics

• Financial performance and growth strategies

Our research methodology included extensive surveys of industry participants, covering:

• Current and projected demand trends

• Technology developments and innovation trends

• Market challenges and growth opportunities

• Regulatory impacts and policy developments

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