1. Market Overview
Electrical Steel for EV Market size was valued at USD 2.5 Billion in 2024 and is projected to reach USD 5.8 Billion by 2033, exhibiting a CAGR of 9.8% from 2026 to 2033.
Electrical steel, particularly non-grain-oriented (NGO) and grain-oriented (GO) types, plays a critical role in the production of EV components such as traction motors, transformers, inductors, and converters. These specialized steels are engineered to minimize core losses and maximize magnetic permeability, making them essential for improving energy efficiency and performance in EV systems.
Key Growth Drivers
- Rising EV Production: With EVs becoming mainstream, the demand for efficient electric traction systems is increasing significantly. This directly drives the consumption of high-grade electrical steel in motor and inverter production.
- Efficiency Standards: Global mandates around energy efficiency in vehicles and charging infrastructure are prompting manufacturers to adopt premium electrical steel with lower hysteresis and eddy current losses.
- Material Innovations: Advancements in thin-gauge, high-silicon, and domain-refined steel grades are enabling compact motor designs with higher power density.
- Grid Expansion & Charging Infrastructure: Growth in fast-charging networks and grid-connected vehicle systems requires GO steel for transformers and inductors, fueling another layer of demand.
- Decarbonization Push: The steel industry’s shift toward lower-emission production methods, such as electric arc furnaces (EAF) and recycled content, is aligning well with the sustainability goals of EV manufacturers.
Overall, the electrical steel for EV market is set to triple in size over the next decade, underpinned by the global transition to clean mobility and increased investment in electric and hybrid vehicle technologies.
2. Market Segmentation
The electrical steel for EV market can be segmented into four key categories: Product Type, Application, Vehicle Type, and Region.
A. Product Type
1. Non-Grain-Oriented Electrical Steel (NGOES)
NGOES is widely used in rotating electric machines like motors and generators due to its isotropic magnetic properties. It allows for uniform magnetic performance in all directions, which is essential for traction motors in EVs. The low core losses at high frequencies and compatibility with high-speed motor designs make NGOES indispensable. Manufacturers are focusing on developing thinner gauges and higher-silicon content variants to improve motor efficiency, reduce weight, and meet thermal management requirements. The demand for NGOES is expected to surge alongside the rise in battery electric vehicle (BEV) production, where high-performance motors are critical.
2. Grain-Oriented Electrical Steel (GOES)
GOES is engineered for directional magnetic flux and is primarily used in stationary components such as transformers and inductors. In EV applications, it is essential for transformers in on-board charging units, DC-DC converters, and power distribution systems. The oriented grain structure of GOES minimizes energy losses in the primary direction of magnetization, which improves overall system efficiency. As EV charging infrastructure expands and grid integration becomes more prominent, the demand for GOES will grow, especially for fast-charging stations and bidirectional charging technologies.
B. Application
1. Traction Motors
Traction motors represent the most critical application of electrical steel in EVs. These motors convert electrical energy into mechanical power, and their performance is directly influenced by the quality of the electrical steel used. NGOES is the preferred material for stator and rotor laminations due to its ability to reduce magnetic losses during rapid magnetization and demagnetization cycles. High-speed motor designs and the shift toward axial flux motors are increasing the need for ultra-thin, high-efficiency NGOES materials. As automakers compete on EV range, acceleration, and thermal management, optimized electrical steel will remain a key enabler.
2. Transformers & Power Electronics
In addition to motors, electrical steel is extensively used in EV power electronics—specifically in transformers, inductors, and converters. GOES is ideal for high-efficiency transformers used in EV fast chargers and vehicle-to-grid systems. These components require stable magnetic performance at high operating temperatures and frequencies. As EVs become more connected to the energy grid, the demand for GOES in power distribution and charging networks will continue to grow, supporting the development of efficient and resilient charging infrastructure.
C. Vehicle Type
1. Battery Electric Vehicles (BEVs)
BEVs are fully powered by electric motors and represent the largest consumer of electrical steel among vehicle types. These vehicles rely on multiple electric machines—traction motors, auxiliary motors, and powertrain components—that require high-grade NGOES. As BEV sales accelerate globally, particularly in regions offering incentives for zero-emission vehicles, the demand for premium electrical steel will rise. The need for lighter and more energy-efficient vehicles is also driving innovations in steel processing and motor architecture.
2. Hybrid Electric Vehicles (HEVs & PHEVs)
While BEVs dominate the market, hybrid vehicles—both plug-in (PHEVs) and conventional (HEVs)—continue to play a vital role, especially in markets with limited charging infrastructure. These vehicles utilize both internal combustion engines and electric motors, creating demand for NGOES in smaller electric machines. Though the total steel volume per vehicle is lower than in BEVs, hybrids still represent a significant market share. Their growth sustains the demand for electrical steel, particularly in regions transitioning gradually to full electrification.
D. Regional Market
1. Asia-Pacific
Asia-Pacific leads the electrical steel for EV market, accounting for the highest production and consumption levels. Countries in this region are investing heavily in EV manufacturing, supply chains, and supporting infrastructure. Localized steel production, strong government policies favoring electrification, and cost-effective labor make this region the hub of electrical steel production. As regional EV adoption increases and industrial output scales, demand for both NGOES and GOES is expected to rise significantly.
2. North America & Europe
North America and Europe are experiencing strong growth in EV adoption, supported by emission reduction targets, government subsidies, and consumer demand for clean mobility. These regions are also investing in domestic steel production facilities to reduce reliance on imports and support green manufacturing. In Europe, stringent efficiency standards for motors and transformers are creating a favorable market for high-performance electrical steel. Meanwhile, North America’s push for EV infrastructure and renewable energy integration is boosting demand for GOES in transformers and charging equipment.
3. Future Outlook & Trends
- Material Innovation: High-silicon content steels and ultra-thin laminations are becoming industry standards, enabling smaller, lighter, and more efficient motors.
- Green Steel Manufacturing: The shift toward low-carbon steel production using electric arc furnaces and recycled materials aligns with the EV industry's sustainability goals.
- Vehicle-to-Grid Integration: Emerging technologies like vehicle-to-grid (V2G) systems will increase demand for transformers and inductors made with GOES, supporting bidirectional energy flow.
- Advanced Motor Architectures: The rise of axial flux, spoke-type, and multi-phase motor designs will push for further customization and performance improvements in electrical steel.
- Localized Supply Chains: National strategies focusing on domestic steel and EV component production will drive investment in regional steel plants and innovation hubs.
Conclusion
The electrical steel market for EV applications is evolving rapidly, propelled by the global shift to electrified transportation, innovations in motor technology, and the need for high-efficiency electrical systems. With a projected CAGR exceeding 10% over the next decade, the market offers strong growth potential across both developed and emerging economies. Advanced steel products like NGOES and GOES are not just enablers of electric mobility—they are central to the performance, sustainability, and scalability of the EV industry.
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