With the increase in urbanization rates and the development of infrastructure construction in our country, the number of high-rise buildings in towns and cities is constantly growing. As an essential mechanical equipment for high-rise buildings, the demand for elevators is also increasing. The '14th Five-Year Plan' Comprehensive Work Plan on Energy Conservation and Emission Reduction issued by the State Council in 2022 mentions that China has set energy conservation and emission reduction as an important goal, committed to creating a green and low-carbon social trend, and has created a favorable market environment for green energy-saving elevators.
China Energy-saving Elevator Industry
Generally speaking, elevators are one of the most energy-consuming devices in high-rise buildings. According to calculations by the China Elevator Association, each elevator consumes about 40 kWh per day, accounting for about 5% of the total building energy consumption. Therefore, energy-saving elevators play an important role in energy-efficient buildings. The traction machine is a key component of elevator energy consumption. Traditional asynchronous traction machines consume more energy, while permanent magnet synchronous traction machines using high-performance rare earth permanent magnetic materials can save more than 50% of energy and are expected to be widely accepted by the public, gradually replacing traditional asynchronous traction machines in the future.
Source: Analysis by Frost & Sullivan
The consumption of rare earth permanent magnet materials in energy-saving elevators increased from 3,100.7 tons in 2016 to 7,925.9 tons in 2021, with a compound annual growth rate of 20.6%. It is estimated that by 2030, the consumption of rare earth permanent magnet materials may reach 27,849.4 tons, with a compound annual growth rate from 2021 to 2030 of 15.0%.
Source: Analysis by Frost & Sullivan
Compared to traditional elevators, the advantages of energy-saving elevators are concentrated in two aspects. On one hand, the structure of energy-saving elevators is different from that of traditional elevators, eliminating the need for a machine room, thereby reducing construction costs and increasing usable building area. On the other hand, traditional elevators use variable-frequency speed control electrical traction systems, generally employing AC asynchronous motors, which are characterized by complex structures and high energy consumption. Energy-saving elevators, however, use permanent magnet synchronous traction machines, which are small in size, low in energy consumption, and have high operating efficiency, and have become the mainstream model.
From 2016 to 2021, the production volume of energy-saving elevators in China increased from 517,000 units to 1.321 million units, with a compound annual growth rate of 20.6%. By 2030, the production volume of energy-saving elevators in China is expected to reach 4.642 million units, with a compound annual growth rate from 2021 to 2030 of 15.0%.
Source: Analysis by Frost & Sullivan
Driving factors of the energy-saving elevator market in China
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The economy continues to develop steadily
The development of the Chinese elevator market is based on the stable macroeconomic development of China. As an important emerging market globally, China's nominal GDP has maintained steady and relatively rapid growth, increasing from 68.9 trillion yuan in 2015 to 101.6 trillion yuan in 2020, with a compound annual growth rate of 8.1%. According to Frost & Sullivan's forecast, from 2020 to 2025, China's nominal GDP will continue to grow at a compound annual rate of 8.3%, reaching 151.4 trillion yuan by 2025.
China's social environment is stable, and its consumer market is huge. It is expected that the Chinese economy will maintain a stable development trend, providing a solid foundation for the elevator industry. At the same time, in conjunction with the carbon peak and carbon neutrality goals announced by the Chinese government, energy-saving elevators, due to their advantages such as energy conservation and long-term effectiveness, will benefit from the process of carbon peak and carbon neutrality.
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Domestic market demand is high
With the acceleration of industrialization and urbanization in our country, there is a great demand for new multi-story and high-rise buildings such as residences, schools, hospitals, industrial parks, and commercial complexes. This provides favorable development opportunities for the energy-saving elevator industry in our country.
In addition, the Ministry of Housing and Urban-Rural Development has issued the 'Green Building Construction Action Plan', which requires that by 2022, the proportion of green building construction area in urban areas should reach 70%. Therefore, the development of the energy-saving elevator market will be driven by both demand-side and policy-side factors.
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Government support
The State Council has issued policies and regulations such as the "Series of Opinions on Further Promoting the Construction of New Urbanization," requiring the improvement of urban functions, including shantytowns, villages within cities, and the renovation of dangerous buildings. The State Council's "Notice on Printing and Distributing the National '13th Five-Year' Plan for the Development of Aging Affairs and the Construction of the Elderly Care System" proposes to promote the construction and renovation of barrier-free facilities, further advancing the renovation of barrier-free facilities in residential areas, with a focus on slopes, stairs, elevators, handrails, etc. In recent years, the government has increasingly emphasized the installation and maintenance of elevators, creating a favorable market environment for the elevator industry.
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Industry concentration has increased
In China, the elevator industry is becoming more standardized and competitive, with accelerated integration. Small and medium-sized elevator manufacturing enterprises with insufficient sustainable development capabilities such as marketing channels, R&D capabilities, and after-sales service will gradually withdraw from the market. In the long run, elevator manufacturing enterprises with their own brands, R&D capabilities, and marketing channels will have great development space, and their market share will further increase. Combining with the trend of energy conservation, this will further promote the development of the energy-saving elevator market.
Development Trend of China's Energy-saving Elevator Market
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Large ownership and incremental market
In recent years, the number of elevators in use and the number of old elevators in China have increased significantly, rising from about 4.67 million units in 2016 to about 8.44 million units in 2021, with a compound annual growth rate of 12.6%. Due to the advantage of energy-saving elevators in reducing carbon emissions, more and more old elevators will be replaced or renovated with energy-saving ones.
On the other hand, driven by multiple factors such as real estate, rail transit, and renovation of old buildings, there is still significant growth potential in China's elevator market, with production further increasing. At the same time, to conform to the development trend of energy conservation and environmental protection, the energy-saving elevator market will see further development.
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The Internet of Things promotes reforms in elevator safety supervision and maintenance
With the continuous improvement of elevator carrying capacity in our country, safety management and supervision issues have become increasingly prominent, and the shortage of professional elevator maintenance personnel has become more apparent.
In recent years, the Internet of Things (IoT) as an emerging technology has gradually risen in the supervision and maintenance of elevator safety. The elevator IoT achieves intelligent safety supervision through configuring a data system with operational parameter collection capabilities. It can exchange information and data among elevator manufacturing enterprises, quality inspection departments, maintenance departments, elevator passengers, and real estate developers, thereby realizing intelligent management of elevators and ensuring operational reliability.
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Intelligent manufacturing has become the transformation direction.
Intelligent manufacturing is becoming the direction for China's industrial transformation and upgrading. As a typical machinery industry, intelligent manufacturing of energy-saving elevators has become a trend for energy-saving elevator manufacturing enterprises to transform and upgrade.
Energy-saving elevator manufacturing enterprises will increase investment in intelligent technologies and high-tech, continuously improve the intelligence level of elevator systems, achieve transformation and upgrading, and enhance industry competitiveness by reducing the prices of energy-saving elevators, providing customers with a smarter and more convenient experience.
