Variable Frequency Drive Market Size, Share & Trends Analysis Report By Product Type (AC Drives, DC Drives, Servo Drives), By Power Range, By Application (Pumps, Electric Fans, Conveyors, HVAC, Extruders), By End-use, By Region, And Segment Forecasts, 2025 - 2030

Variable Frequency Drive Market Trends

The global variable frequency drive market size is estimated at USD 28.38 billion in 2024 and is projected to grow at a CAGR of 5.9% from 2025 to 2030. Increasing penetration of connected devices in various sectors such as commercial, industrial, and residential sectors, coupled with rising demand for variable frequency drive (VFD) owing to their advantages such as dynamic torque control energy-saving and adjustable speed from industries such as oil & gas, automotive and power generation are major factors expected to drive the market in a positive trajectory. Additionally, increasing investment in infrastructure development is resulting in high demand for heating, ventilation, and air conditioning (HVAC) systems which call for solutions to improve infrastructure energy output is another factor that is expected to positively impact market growth.

Rapid industrialization in developing countries is resulting in high growth in the manufacturing and industrial sectors, which supports the growing traction towards VFD components. Likewise, the power generation sector is widely adopting variable frequency drive as they use it to smoothly start large motors and continuously adjust the speed as required by the process. Thus, increasing demand for variable frequency drive from the power generation sector is expected to augment the target market growth. Industries such as metal & mining, food processing, and oil & gas use various equipment for operations that vary in technology. VFDs are used by induction, forced draft fans, boiler feed pumps, service water pumps, and conveyors that provide high power, precise speed control, and significant energy savings.

Governments worldwide are enforcing strict regulations to reduce CO2 emissions and promote energy conservation, driving the adoption of energy-efficient products. In addition, efforts to achieve CO2 emission and energy efficiency targets aim to decrease reliance on fossil fuels, leading to the introduction of new policies that support market growth. For instance, in January 2024, negotiators from the Council and the European Parliament reached a provisional political agreement to implement stricter CO2 emission standards for heavy-duty vehicles (HDVs).

Product Type Insights

The AC drives segment dominated the variable frequency drive industry and accounted for the largest share of 68.9% in 2024. The segment growth is ascribed to the widespread deployment of AC drives in almost all forms of industries. Furthermore, its amplified application in medium and heavy industries, such as oil and gas, power generation, infrastructure, food & beverages, automotive, pulp & paper, and many others, are expected to fuel the market share.

The servo drives segment is expected to grow at a significant CAGR during the forecast period. Servo variable frequency drives are used to control servo motors, which are permanent magnet motors, and use variable flux to control their operations. The variable frequency drive controls the speed and torque of the servo motors by varying the frequency and voltage applied to the stator. The application of servo motors is limited due to the complicated nature of the motor and the technical challenges associated with its integration with VFDs. However, these drives are gaining popularity amongst low-power devices, as their horsepower is limited due to feedback systems. Servo drive carries advantages such as operating machine tools with flexibility.

Power Range Insights

The low (6-40 kW) segment held the largest market share in 2024. Low-power drives have a short payback period since they conserve more energy while using less capital and have superior process control owing to their energy efficiency. They also find use in various industries such as automotive, gas and oil, construction, beverage and food, and paper & pulp.

The medium (41-200 kW) segment is expected to witness significant CAGR growth during the forecast period. One of the main reasons the medium (41-200 kW) power range is becoming more and more popular in various industries, including mining, petrochemical, and wastewater treatment facilities, is that it offers advantages, including increased operating flexibility and greater control. 

Application Insights

The pumps segment dominated the variable frequency drive industry in 2024. The pumps have variable frequency drives built into them, which lowers their power consumption, reduces the cost of running a pump, and enables them to run at various speeds without a gearbox. Additionally, variable frequency drives provide phase loss detection, and variable frequency drives provide motor thermal overload safety.

The HVAC is projected to grow at a significant CAGR over the forecast period. Increasing non-residential and residential construction across developing and developed nations is expected to spur the demand for HVAC systems. Variable frequency drive is considered one of the most effective and finest energy management tools to intensify energy efficiency and the operational performance of HVAC. Energy savings are the main advantage of employing a variable frequency drive.

End-use Insights

The oil & gas segment dominated the market in 2024. The oil & industry majorly relies on applications such as production, distribution, and refining, which use heavy power motor-driven pumps and pumping systems. Thus, to drive these electric motors at optimum performance with the lowest possible energy consumption, a variable frequency drive is integrated. Therefore, the attempt to maximize the operating profit is expected to fuel the demand for variable frequency drive over the coming years.

The infrastructure segment is expected to experience the fastest CAGR during the forecast period, driven by ongoing commercial and residential infrastructure projects in both developed and developing economies. These projects are fueling the demand for variable frequency drives within the construction industry. Additionally, the replacement of hydraulic and mechanical drives with electric motors in construction applications is further boosting the need for energy-efficient devices. This shift aligns with government initiatives aimed at achieving energy-saving goals, contributing to the increased adoption of variable frequency drives.

Regional Insights

The North America variable frequency drive market held a significant share in 2024. The market's growth is driven by substantial investments in smart grids and smart meters, along with increasing awareness of greenhouse gas emissions. The adoption of smart grid technology in the region is expected to enable more efficient use of electricity infrastructure, enhance the flexibility and resilience of energy systems, and accelerate the integration of renewable energy sources.

U.S. Variable Frequency Drive Market Trends

The variable frequency drive market in U.S. held a dominant position in 2024. The growth is attributed to significant investments being made to revamp large-scale assets across several end-user verticals. The demand for variable frequency units has been steadily growing owing to the efforts of upgrading current systems with energy-efficient technologies. Small, medium, and large-scale projects being launched in end-user industries, including metals & mining and oil & gas, will also encourage the adoption of variable frequency drive in the region.

Europe Variable Frequency Drive Market Trends

The Europe variable frequency drive industry was identified as a lucrative region in 2024. The growth is attributed to an increase in power production through renewable energy. For instance, the EU has approved USD 29.6 million (€28 billion) for German renewable energy program. The program goal is to increase solar and wind power usage significantly.

The UK variable frequency drive market is expected to grow rapidly in the coming years due to the potential application of the product in the construction industry. U.K. has major construction projects in their pipelines Hinkley Point C, Battersea Power Station Redevelopment, High Speed 2 (HS2) Railway, and Cross rail. Variable frequency devices are increasingly used in construction activities to control compressors, pumps, and fans while improving energy efficiency this is expected to drive the regional market growth.

Asia Pacific Variable Frequency Drive Market Trends

The variable frequency drive market in Asia Pacific accounted for a 34.5% share of the overall market in 2024. The regional growth is credited to the emergence of IoT. The user may perform testing, control, and monitor the process remotely and prevent any unplanned downtime from happening in the first place. Customers benefit from more efficient operation management thanks to remote operations.

The Japan variable frequency drive market is expected to grow rapidly in the coming years owing to the high consumption of residential AC. The high ownership of air conditioners in Japan is also a result of social preferences and expectations for thermal comfort. A tremendous amount of renewable energy is being produced throughout the nation. This has to be incorporated into the current national grid, which will require constructing new electrical infrastructure and fueling the regional market for variable frequency drives.

The variable frequency drive market in China held a substantial market share in 2024 owing to its focus on infrastructure development has attracted foreign direct investment in several industrial and manufacturing sectors. Active support from the Chinese Government has enabled the inclusion of high-performance industries, translating into overall industry growth.

Key Variable Frequency Drive Companies

Some of the key companies in the variable frequency drive industry include ABB, General Electric Company, Hitachi, Ltd., and Schneider Electric. Organizations are focusing on increasing customer base to gain a competitive edge in the industry. Therefore, key players are taking several strategic initiatives, such as mergers and acquisitions, and partnerships with other major companies.

• ABB is a multinational corporation that offers a wide range of products through its business segments: robotics & discrete automation, industrial automation, electrification, motion, power grids, and cybersecurity. ABB’s automation business segment offers products catering to applications related to control, measurement, protection, and process optimization. The company manufactures motors, generators, mechanical transmission products, and drives through its robotics and motion business segment. Its power technologies business focuses on power plant automation, transmission, and distribution.

• Hitachi, Ltd. is a global manufacturer of drives, automation products, and completely customizable solutions. The company offers its products to serve various industries, including metal and mining, oil and gas, cement, paper & pulp, water, rubber, and plastic. The company's product portfolio includes air compressors, UPS, AC drives, inverters, blowers, PLC, hoists, motors, and control systems. Hitachi Ltd. is in Asia, the Americas, Europe, and the Middle East.

Recent Developments

• In January 2023, ABB announced the opening of its Mexico technology center for the North American region. The organization initially invested USD 1 million in its New Mexico Technology and Engineering Center (MXTEC) situated in Merida, Yucatan. The center was built with the motive to enhance research capacity and project delivery capacity.

• In May 2023, ABB India expanded its manufacturing capabilities by launching a new production line for variable speed drive modules in Bengaluru. This initiative supports the Indian government's 'Atmanirbhar Bharat' program, aiming to enhance local manufacturing and meet both domestic and global demands. The line will deliver drives ranging from 75 kW to 250 kW, which are essential for controlling electric motor speeds and improving energy efficiency across various industrial applications.

Variable Frequency Drive Market Report Scope

Global Variable Frequency Drive Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global variable frequency drive market report based on product type, power range, application, end-use and region:

• Product Type Outlook (Revenue, USD Billion, 2018 - 2030)

  • AC Drives

  • DC Drives

  • Servo Drives

• Power Range Outlook (Revenue, USD Billion, 2018 - 2030)

  • Micro (0-5 kW)

  • Low (6-40 kW)

  • Medium (41-200 kW)

  • High (>200 kW)

• Application Outlook (Revenue, USD Billion, 2018 - 2030)

  • Pumps

  • Electric Fans

  • Conveyors

  • HVAC

  • Extruders

  • Others

• End Use Outlook (Revenue, USD Billion, 2018 - 2030)

  • Oil & Gas

  • Power Generation

  • Industrial

  • Infrastructure

  • Automotive

  • Food & Beverages

  • Others

• Regional Outlook (Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • UK

    • France

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

  • Middle East and Africa (MEA)

    • KSA

    • UAE

    • South Africa