Transformers Market Trends Show Rising Demand from Utilities and EV Charging

According to a new report published by Allied Market Research, the global transformers market size was valued at $58.6 billion in 2021 and is projected to reach $103.0 billion by 2031, growing at a CAGR of 6.1% from 2022 to 2031. The market growth is primarily driven by rising electricity demand, rapid industrialization, expansion of renewable energy projects, and increasing investments in smart grid infrastructure across the globe.

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Overview of Transformers and Their Role in Power Systems

A transformer is an electrical device that transfers energy between circuits through electromagnetic induction. The concept of electromagnetic induction was first introduced in 1831 by Michael Faraday, laying the foundation for modern transformer technology. Over time, transformer design evolved into an independent and essential component of electrical power systems.

Transformers are used to increase or decrease voltage levels, enabling efficient power transmission and distribution from power generation stations to residential, commercial, and industrial end users. They consist of two inductive coils-primary and secondary windings-linked by a common magnetic flux. This mutual induction allows voltage transformation without direct electrical contact between circuits.

As static electrical devices, transformers play a crucial role in minimizing power losses and ensuring reliable electricity delivery. Low-voltage transformers designed for rectifiers are increasingly used to supply direct current (DC), which further supports the growth of the transformers market during the forecast period.

Key Growth Drivers of the Transformers Market

The increasing demand for electricity from manufacturing industries, urban infrastructure, and residential sectors is a major driver of the transformers market growth. Rapid industrialization and urban expansion, particularly in emerging economies, are increasing the need for efficient power distribution networks.

Additionally, the rise in utility-scale applications and the expansion of transmission and distribution infrastructure are fueling market growth. Smart grid projects, which require advanced transformers for efficient voltage regulation and load management, are gaining traction worldwide.

Another significant growth factor is the surge in electric vehicle (EV) adoption across regions such as the U.S., China, and Europe. The growing number of EV charging stations requires robust electrical infrastructure, including transformers, creating lucrative transformers market opportunities.

However, the market faces certain restraints, such as risks associated with high DC voltages and the high initial cost of transformer installation, which may limit adoption in some regions.

Regional Outlook of the Transformers Market

Region-wise, the transformers market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific dominated the global transformers market in 2021, accounting for more than 35% of total revenue, and is expected to grow at a CAGR of 6.4% during the forecast period. Strong growth in China and India's solar power industry, along with increasing investments in smart grid projects, is driving regional market expansion.

The LAMEA region is projected to grow at the highest CAGR of 6.6%, driven by ongoing power transition initiatives and rising electricity demand from manufacturing industries.

North America and Europe are also witnessing steady growth due to grid modernization efforts, renewable energy integration, and replacement of aging power infrastructure.

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Transformers Market Segmentation Analysis

The transformers market is segmented based on type, power rating, cooling type, number of phase, insulation, application, and region.

By Type

Based on type, the market is categorized into distribution transformers, power transformers, and others. Among these, the distribution transformers segment held the highest market share in 2021 and is expected to maintain its dominance throughout the forecast period. This is attributed to growing demand from residential, commercial, and industrial applications.

By Power Rating

By power rating, the market is classified into small, medium, and large transformers. The small power rating segment dominated the market in 2021, accounting for over 40% of total revenue. Small transformers are widely used in rural and semi-urban areas for local power distribution, driving their widespread adoption.

By Cooling Type

On the basis of cooling type, the transformers market is bifurcated into oil-cooled and air-cooled transformers. The air-cooled segment held the largest market share in 2021 and is expected to grow at a CAGR of 6.3% during the forecast period. Air-cooled transformers are increasingly used in renewable energy projects due to their cost-effectiveness, operational efficiency, and resistance to environmental conditions.

By Insulation Type

By insulation, the market is divided into dry-type and liquid-immersed transformers. The dry insulation segment dominated the market in 2021 and is anticipated to retain its leadership position. Dry transformers are eco-friendly, safer, and reduce energy losses during transmission, making them ideal for urban and indoor applications.

By Number of Phase

Based on the number of phase, the market is segmented into single-phase and three-phase transformers. The three-phase segment accounted for the highest market share in 2021, driven by strong demand from industrial and utility sectors. Three-phase transformers are preferred for high-voltage power transmission and efficient energy storage.

By Application

On the basis of application, the transformers market is classified into commercial, residential, utility, and industrial sectors. The utility segment emerged as the largest revenue contributor in 2021 and is projected to grow at a CAGR of 6.3%. Rising demand for voltage conversion from high to medium levels in utility networks is a key growth factor.

Competitive Landscape

The global transformers market is moderately competitive, with key players focusing on technological advancements, capacity expansion, and strategic collaborations. Major companies profiled in the market include ABB Ltd., Siemens AG, General Electric, Eaton, Toshiba Corporation, Schneider Electric, Mitsubishi Electric Corporation, CG Power & Industrial Solutions Ltd., VTC/GT, and SGB SMIT.

These players are investing heavily in research and development to enhance transformer efficiency, safety, and compatibility with renewable energy systems.

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Conclusion

In conclusion, the transformers market is set to witness sustained growth through 2031, supported by rising electricity demand, renewable energy integration, EV infrastructure expansion, and smart grid deployment. As global power systems evolve, transformers will continue to play a vital role in ensuring efficient, reliable, and sustainable energy transmission and distribution.

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Allied Market Research (AMR) is a full-service market research and business-consulting wing of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides global enterprises as well as medium and small businesses with unmatched quality of "Market Research Reports" and "Business Intelligence Solutions." AMR has a targeted view to provide business insights and consulting to assist its clients to make strategic business decisions and achieve sustainable growth in their respective market domain.

Pawan Kumar, the CEO of Allied Market Research, is leading the organization toward providing high-quality data and insights. We are in professional corporate relations with various companies and this helps us in digging out market data that helps us generate accurate research data tables and confirms utmost accuracy in our market forecasting. Each and every data presented in the reports published by us is extracted through primary interviews with top officials from leading companies of domain concerned. Our secondary data procurement methodology includes deep online and offline research and discussion with knowledgeable professionals and analysts in the industry.

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