Governments across the globe are implementing stringent regulations to lower the CO2 impact on the environment and save energy which is resulting in the adoption of energy-efficient products. Also, they are planning to meet CO2 emission and energy efficiency goals to reduce the concentration of fossil fuel emissions. This is resulting in the implementation of new rules, thereby supporting market growth. For instance, in October 2019, Ecodesign Regulation (EU) came into effect which was implemented in 2 stages the first stage in July 2021 and the second in July 2023. In the first stage, the regulation covered the IE2 efficiency class mandatory for AC drives.
The major challenges faced by the global market are the high initial cost of the variable speed drives and economic slowdown. Due to the economic slowdown, the industrial and commercial sectors witnessed slow growth which lowered the demand for VFD. Also, due to COVID-19, there was a disruption in the supply chain of raw materials which impacted the availability of products. Additionally, the lack of skilled labor and high cost associated with maintenance are factors expected to hamper the global market growth
The outbreak of COVID-19 brought severe repercussions for global market growth. Implementation of strict lockdown and shutdown of manufacturing facilities resulted in a decline in demand for variable frequency drive components. However, in the second quarter of 2021, the manufacturing sector witnessed growth gradually increasing the demand for VFD and by the second quarter of 2022, the market is expected to witness growth at its full potential.
