Optimization of your (Development) Costs

Cost Analysis for Electric Motors by Promotex Consulting

The electric motor is getting more and more important due to the significant increase in use due to the CO2 reduction. One important success factor is a proper cost analysis for the electric motor. In this context, the electric motor is a very complex unit with around 30 to 40 different individual components, each with a large number of different manufacturing technologies as well as the subsequent, extremely complex and extensive assembly.

How to optimize to gain a competitive advantage or avoid falling behind? This question is occupying a steadily growing number of companies in order to survive in an increasingly competitive environment. After all, it is no longer sufficient to limit oneself to “off-the-shelf” models.

Increase your Negotiation Lever

It is important to have a clear negotiation strategy for negotiations with customers and suppliers and to significantly improve your own position. However, the verification of supplier offers is often really complex and difficult. Any help in regards of argumentation for price claims is extremely valuable.

In the end, the focus is also always on identifying optimization potential in and around the electric motor in order to improve your competitiveness. Because your competitors are also making continuous progress in this area.

Cost Analysis for Electric Motors

Get external Support for your Purchasers and R&D

Typically the electric motor and its supplier is defined by the R&D department. However this is completely affecting your negotiation strategy and gives you some limitations in your position. Often it is also simply not possible to compare different concepts with each other. This may frustrate your purchasers and this situation can become a real handicap for your product on the market. That’s why you should get support from specialists!

Your Partner for Electric Motor Cost Analysis

Currently, there are only a few capable providers on the market who offer cost analysis for electric motors. Promotex Consulting is ready to provide you with an profound analysis of this crucial part – and also to evaluate it correctly. This will enable your company to react successfully on a fast developing and changing market.

Cost analysis for electric motors with your team

This is how we support your R&D Department

Promotex consulting has a very wide knowledge for the overall cost understanding of the motor, its single components and its development costs. Our unique Promotex Motor Cost Model identifies possible optimizations and helps you to realize them. We are supporting you not only in the cost analysis phase but also throughout the later realization of the different measures. You benefit from our long experience in the production of the single components and the motor itself. In addition we are supported by our wide expert network für realizing the best result for you.

Short FAQ on Electric Motor Cost Analysis

The main cost drivers in electric motor manufacturing are raw material prices for steel, copper, and permanent magnets (rare earths), the level of automation in production lines, and the motor design itself. A detailed cost analysis identifies savings potential, particularly in material substitution and manufacturing optimization.

The should-costing approach calculates the theoretical manufacturing costs based on material prices, production processes, and overhead costs. The objective is to identify discrepancies between actual purchase prices and market-based target costs in order to achieve negotiation advantages and enable technical optimizations.

In a tear-down, a competitor product is completely disassembled to analyze material composition, manufacturing steps, and assembly effort. This enables precise benchmarking and the identification of best-practice solutions for one’s own cost structure.

As the electric motor is the most expensive component in the electric drivetrain, even small percentage cost reductions can significantly impact market competitiveness. A cost analysis helps secure margins and reduces dependencies on volatile raw material markets.

Yes. By standardizing components across different motor variants, purchasing scale effects can be achieved and production complexity reduced. This can lower total costs by up to 15%.

Checklist: Are You Ready for a Professional Electric Motor Cost Analysis?

This checklist helps you realistically assess your current need for action regarding electric motor costs. The more questions you answer with “Yes”, the greater the leverage of an external electric motor cost analysis.

1. Cost Transparency

  • We do not have a detailed breakdown of the total cost of our electric motor (materials, components, assembly, and development).

  • Our current cost calculations are largely based on supplier data.

  • We find it difficult to objectively assess supplier price increase requests.

  • A should-cost model for our motors does not exist or is outdated.

2. Purchasing & Negotiation

  • Our buyers lack solid, data-driven arguments in price negotiations.

  • Comparability between different motor concepts or suppliers is limited.

  • Technical decisions made during development restrict negotiation leverage in purchasing.

  • Price discussions in series production regularly lead to uncertainty or frustration.

3. Product & Design Concept

  • Our electric motor consists of many variant-rich individual components without clear standardization.

  • A modular or platform strategy is not implemented or only partially implemented.

  • Potential for material substitution (e.g. steel, copper, magnets) has not been systematically evaluated.

  • Competitive products have not yet been analyzed using a structured tear-down approach.

4. Manufacturing & Industrialization

  • Assembly costs of our electric motor are not broken down in sufficient detail.

  • The level of automation in manufacturing was defined historically and is rarely challenged.

  • Reliable benchmarks for best-practice manufacturing concepts of comparable motors are missing.

  • Optimization potential between design and manufacturing is not considered holistically.

5. Strategy & Competitiveness

  • The electric motor is one of the most cost-critical assemblies in our product.

  • Even small percentage cost reductions would have a noticeable impact on margins and market position.

  • We are facing increasing competitive or cost pressure.

  • Industrial transformation (CO₂ regulations, material prices, market speed) is increasing the pressure to act.

Checklist Evaluation

  • 0–5 applicable items:
    Your cost structure is already well under control – selective analyses may still reveal additional potential.
  • 6–12 applicable items:
    Clear optimization opportunities exist, which typically require significant internal effort to address.
  • 13+ applicable items:
    A professional electric motor cost analysis is a strategic lever for cost reduction, negotiation power, and competitiveness.

Next Step

If you would like to further deepen your answers or identify concrete cost-saving potential, Promotex Consulting supports you with a holistic electric motor cost analysis – from analysis through to implementation.

Do not hesitate to contact us about Electric Motor Cost Analysis

Talk to us about your challenges: Together with you, we analyze your electric motor costs so that you can actively and, above all, profitably shape industrial change!



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    Disclaimer:

    Not only every electric car, but generally every electrically powered device needs an electric motor. But the electric motor sector is very agile at the moment. And pending on the vehicle, the cost of developing the electric motor varies a lot. The motor costs itself do have also a corresponding effect of the overall vehicle price. Each type of electric drive has different requirements. We see it as our task to minimize the costs per vehicle and to optimize the electric motors of the vehicles. Year after year, electric drives in electric cars continue to develop. The costs in comparison to the vehicle – also to the vehicle type – also play a role for the price of the different vehicles.

    We optimize the vehicle costs together with our customers. The costs itself decides the market price of the product and if your able to optimize your costs, you could easily place your product on the market. During the years, we have already analyzed costs for a wide variety of companies and thus contributed to an increase in success around the topic of electric cars. You can read more about this in our success stories