HS Code:
Electric motors of a kind used as the primary source of mechanical power for electrically powered vehicles (under HS subheadings 8703.40, 8703.50, 8703.60, 8703.70, or 8703.80) are critical components in the rapidly growing electric vehicle (EV) industry. These motors convert electrical energy into mechanical energy to drive hybrid and fully electric vehicles, including passenger cars, buses, and commercial vehicles. The global trade of these motors reflects the increasing adoption of EVs, driven by environmental regulations, technological advancements, and government incentives for green energy solutions. This category falls under HS Code 8501.32 or 8501.33, depending on power output, when specifically used for vehicles in the mentioned subheadings.
Total Trade Volume
USD 12.5 billion
Data from 2022
Source
United Nations Comtrade Database, International Trade Centre (ITC)
Average Rate
4.5%
Highest Rate
10% (applied by certain developing countries to protect domestic industries)
Lowest Rate
0% (under free trade agreements like EU-Japan EPA or USMCA)
Rising demand for high-efficiency motors
Increased trade volume as manufacturers seek advanced permanent magnet synchronous motors (PMSMs) for better EV performance and range.
2021-2023
Shift toward localized production
Reduced import dependency in regions like Europe and North America due to government incentives for domestic EV component manufacturing.
2022-2023
Supply chain disruptions for rare earth materials
Higher costs and trade bottlenecks for motors reliant on neodymium and other critical minerals, pushing innovation in alternative motor technologies.
2020-2022
The European Union introduced subsidies and reduced tariffs for importing electric motors meeting specific energy efficiency standards as part of its Green Deal initiative.
January 2023
Boosted imports from Asian manufacturers while encouraging local production partnerships.
The US IRA provides tax credits for EV production but imposes stricter local content rules, affecting the import of electric motors from non-USMCA countries.
August 2022
Shift in trade patterns with increased sourcing from Canada and Mexico over China.
China implemented tighter controls on rare earth exports, critical for electric motor magnets, to prioritize domestic EV manufacturers.
December 2022
Increased global prices and supply chain diversification efforts by manufacturers in Europe and the US.