Contactor Market

Growing Usage of Contactors in Electric Vehicles (EVs) and Hybrid Electric Vehicles (HEVs)  to boost market growth

The demand for EVs and HEVs is increasing owing to the rising fuel prices and incentives rolled out by government bodies. The government across various countries is encouraging the usage of e-mobility to cut down the dependency on crude oil and reduce vehicle pollutions. Numerous automotive manufacturers have started producing electric vehicles or hybrid electric vehicles, subsequently supporting the growth of the market. These contactors are used in EVs or HEVs to isolate the high voltage battery from the high voltage network.

The growing awareness towards maintaining a clean environment has propelled the growth of renewable energy projects. Solar energy is considered the fastest-growing application in renewable energy. In addition, the continuously increasing demand for growing green energy shares is also supporting the growth of solar energy. The main application for contactors in PV plants is disconnecting the inverter from the PV strings when the required output is low. In addition, these contactors are used to change the PV strings configuration to increase the plant efficiency by diverting other strings to an optimal converter.

Therefore, such condition has enhanced the Contactors market CAGR across the globe in the recent years. 

The growing industrialization and urbanization in the Asia Pacific region, especially in China and India, have boosted the electricity demand. The growing population in the region has increased per capita electricity consumption, thus providing an opportunity for the contactor market as these contactors can play important role in controlling the flow of electricity. Rising population and growing urbanization rates are likely to increase energy demand across the globe. According to the United Nations report, in 2018, 55% of the world’s population lives in urban areas, projected to increase to 68% by 2050.

In addition, rapid urbanization is also supporting the growth of these connectors/.

However, increasing use of Contactors in the power distribution network for switching an electrical power circuit for smooth functioning of electrical equipment is another factor driving the growth of the Contactors market revenue.

The Global Contactors Market Industry is poised for substantial growth, with projections indicating a market value of 0.38 USD Billion in 2024 and an anticipated increase to 0.71 USD Billion by 2035. This growth trajectory suggests a compound annual growth rate of 5.79% from 2025 to 2035, reflecting the increasing demand for contactors across various applications. The market dynamics are influenced by factors such as technological advancements, infrastructure development, and the shift towards renewable energy sources. These elements collectively contribute to a robust outlook for the Global Contactors Market Industry.

The Global Contactors Market Industry experiences a notable surge in demand for automation across various sectors, including manufacturing and construction. As industries increasingly adopt automated systems, the need for reliable contactors to manage electrical loads becomes paramount. For instance, the integration of smart technologies in industrial settings necessitates advanced contactors that can handle higher operational demands. This trend is projected to contribute to the market's growth, with an estimated value of 0.38 USD Billion in 2024, reflecting a shift towards more efficient and automated solutions.

The Global Contactors Market Industry is witnessing a growing focus on energy efficiency across various sectors. As organizations aim to reduce operational costs and minimize environmental impact, the demand for energy-efficient electrical components, including contactors, is increasing. This trend is particularly evident in commercial and industrial applications, where energy savings can lead to substantial cost reductions. For example, the implementation of energy-efficient contactors can enhance system performance while lowering energy consumption. This heightened emphasis on efficiency is likely to drive market growth, as businesses seek to adopt solutions that align with their sustainability objectives.

The Global Contactors Market Industry is significantly influenced by the expansion of renewable energy sources. As countries strive to meet sustainability goals, the adoption of solar and wind energy systems is on the rise. These systems require specialized contactors to manage the electrical flow effectively. For example, the installation of solar panels necessitates contactors that can withstand variable loads and ensure safety. This shift towards renewable energy is expected to drive market growth, with projections indicating a market value of 0.71 USD Billion by 2035, highlighting the increasing reliance on sustainable energy solutions.

The Global Contactors Market Industry is positively impacted by the increasing infrastructure development worldwide. Governments and private sectors are investing heavily in infrastructure projects, including transportation, utilities, and urban development. These projects require reliable electrical systems, where contactors play a vital role in ensuring operational efficiency and safety. For instance, the construction of smart cities necessitates advanced electrical solutions, including contactors that can handle complex load requirements. This ongoing infrastructure boom is expected to bolster the market, as the demand for contactors continues to rise in tandem with these large-scale projects.

Technological advancements in electrical components play a crucial role in shaping the Global Contactors Market Industry. Innovations such as enhanced materials and smart technologies enable the development of more efficient and durable contactors. These advancements not only improve performance but also reduce energy consumption, aligning with global sustainability initiatives. As industries seek to optimize their operations, the demand for technologically advanced contactors is likely to rise. This trend is anticipated to contribute to a compound annual growth rate of 5.79% from 2025 to 2035, indicating a robust growth trajectory for the market.

By Region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. North America Contactors market accounted for USD 0.13 billion in 2021 and is expected to exhibit a significant CAGR growth during the study period. According to the American Automotive Policy Council report 2018, the total vehicles manufactured in the US is expected to reach 12 million, per year by 2025. The rise in production of the automotive in the region has led to an increase in the use of Contactors for maintaining the effective demand side load in automotive systems.

Such developments are expected to increase the use of Contactors to maintain stability and ensuring sound demand side load management. Therefore, the increase in the demand for Contactors is driving the global Contactor market demand during the forecast period.

Further, the major countries studied in the market report are: The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3: Global Contactors Market Share By Region 2021 (%)

Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

Europe Contactors market accounts for the second-largest market share. In the European region, various countries such as Germany, Argentina, France, and others have set their target of zero-emission of carbon-dioxide by 2050, which has increased the renewable energy projects in the region and has bolstered market growth. In addition, the region has some of the world's largest automotive manufacturers such as Volkswagen Group, BMW, Daimler, Delphi, Ford, Hyundai, Renault, and many others, who are shifting towards EVs and HEVs promoted the usage of these types of contactors in the region.

Further, the Germany Contactors market held the largest market share, and the UK Contactors market was the fastest growing market in the European region

The Asia-Pacific Contactors Market is expected to grow at the fastest CAGR from 2022 to 2030. Moreover, the increase in demand due to the growing population and per capita income creates a huge market opportunity for the growth of renewable energy sources in the Asia-Pacific region. Moreover, China Contactors market held the largest market share, and the India Contactors market was the fastest growing market in the Asia-Pacific region

Major market players are spending a lot of money on R&D to increase their product lines, which will help the Contactors market grow even more. Market participants are also taking a range of strategic initiatives to grow their worldwide footprint, with key market developments such as new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the Contactors industry must offer cost-effective items to expand and survive in an increasingly competitive and rising market environment.

One of the primary business strategies adopted by manufacturers in the global Contactors industry to benefit clients and expand the market sector is to manufacture locally to reduce operating costs. In recent years, Contactors industry has provided with some of the most significant benefits. The Contactors market major player such as Medtronic Inc (Ireland), Abbott Laboratories (US), Stryker Corporation (US), and others are working to expand the market demand by investing in research and development activities.

Siemens AG (Siemens) is engaged in the production and supply of systems for power generation, power transmission, and medical diagnosis. It operates through the power and gas, wind power and renewables, energy management, building technologies, mobility, digital factory, process industries and drives, healthcare, and financial services business divisions. The company offers smart building solutions through its building technology segment. The energy management segment covers high voltage products, low voltage power distribution, power transmission, smart grid solutions and services, transformers, medium voltage switchgear and devices, and energy automation.

The building technologies segment comprises automation technologies and services for commercial, industrial, and public buildings and infrastructure. In May 2021, Siemens Electric and Allied Electronics & Automation launched the Easy TeSys product line with a short-circuit ratings range up to 35kA at 480V. This product line is targeted at small OEMs, panel builders, and low-capacity motors.

Also, Trombetta combines industry-leading engineering and innovation with quality manufacturing and unsurpassed customer service. Their products are designed to perform in the harshest conditions across a broad range of markets and industries. In May 2019 Trombetta Inc., a leading automotive parts manufacturer, and distributor have introduced fully sealed full Silver PowerSeal contactors for high-performance and intermittent duty applications.