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Could the Rising Cost of Steel Disrupt the Electric Motors Supply Chain?

February 08,2025

The Growing Demand for Cold-Rolled Steel

Industrial motor manufacturers have historically played a dominant role in the cold-rolled steel market. Their strong purchasing power ensured competitive prices and reliable supply chains. However, the increasing demand for electric vehicles (EVs) is shifting the dynamics of the steel industry. As the automotive sector ramps up its production of EVs, demand for cold-rolled steel is soaring, putting pressure on availability and pricing.

Cold-rolled steel, specifically electrical steel, is a crucial component of electric motors. This iron alloy possesses specific magnetic properties, enabling efficient energy conversion. Traditionally manufactured in cold-rolled strips, it forms the laminated cores of transformers, stators, and rotors. Despite its importance, electrical steel represents a small portion of total steel consumption and is challenging to produce rapidly, making it vulnerable to market fluctuations.

The Impact of Rising Steel Prices on Motor Manufacturers

According to the Federal Reserve Bank, the price of cold-rolled steel has surged by over 400% compared to January 2016. Experts attribute this steep rise to the increased production of EVs, which has significantly weakened the bargaining position of industrial motor manufacturers. The correlation between steel price hikes and the surge in lithium-ion battery demand further underscores the parallel growth of the EV sector and its impact on raw material costs.

With limited production capacity for cold-rolled steel, industrial motor manufacturers now face longer lead times and increased expenses. As a result, companies dependent on electric motors must adapt by implementing proactive strategies to mitigate disruptions in their supply chains.

The Importance of Motor Maintenance

Given the rising costs and extended lead times for new motors, proper maintenance of existing equipment is more critical than ever. Industrial motors are highly durable, often lasting for decades with appropriate care. However, a proactive maintenance plan is essential to avoid unexpected failures and costly downtime.

One of the most common motor failures involves bearing issues, which account for nearly two-thirds of all motor breakdowns. Regular vibration analysis and thermal scanning can help detect early signs of wear, allowing maintenance teams to replace faulty bearings before they cause significant damage. Additionally, monitoring for imbalance, misalignment, and mechanical looseness through vibration analysis can prevent premature failures.

Environmental factors such as overheating should also be closely monitored. Causes of excessive heat include improper ventilation, high ambient temperatures, excessive loads, and power supply fluctuations. Ensuring motors receive the correct voltage—within 5% of the nameplate value, as recommended by the U.S. Department of Energy—can improve efficiency and longevity.

Exploring Alternative Solutions

While maintenance is key to extending the life of electric motors, alternative procurement strategies can help businesses navigate supply chain challenges. One option is purchasing reconditioned or obsolete motors from trusted suppliers. These components provide a viable solution when new motor lead times are too long, preventing costly downtime.

Additionally, businesses can explore motor retrofitting or upgrades to enhance performance and efficiency. By investing in refurbished or upgraded motors, manufacturers can continue operations without compromising productivity.

Conclusion

The rising demand for EVs is placing unprecedented pressure on the cold-rolled steel supply chain, impacting industrial motor manufacturers. With skyrocketing prices and extended lead times, businesses must adopt proactive maintenance strategies to ensure the longevity of their existing motors. By implementing vibration analysis, preventing overheating, and sourcing reconditioned motors from reputable suppliers, manufacturers can maintain productivity despite the ongoing steel supply challenges. In a rapidly evolving market, preparedness and strategic planning are the keys to long-term operational stability.

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