Electric Vehicle Shift Sparks Transformation in China’s Powder Metallurgy Sector
As the global automotive industry accelerates toward electrification, China’s powder metallurgy (PM) sector is undergoing a pivotal transformation. Once heavily reliant on internal combustion engine (ICE) vehicles, the industry now faces both disruption and opportunity as new energy vehicles (NEVs)—including battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell electric vehicles (FCEVs)—reshape the landscape. With over three decades of growth, China has evolved into a global powerhouse in PM parts manufacturing, supported by a diverse domestic market and increasingly competitive homegrown enterprises. However, the rapid rise of electric mobility is compelling the sector to innovate, diversify, and reposition itself for a future where traditional engine and transmission components are no longer the primary drivers of demand.
According to data from the China Powder Metallurgy Industry Association (CMPMA), the PM parts industry in China reached a total sales value of 97.1 billion RMB in 2023, with PM components alone accounting for over 76.6 billion RMB—a 5.7% year-on-year increase. This growth was fueled by a surge in automotive demand, which rose by more than 15.4%, underscoring the continued importance of the auto sector to the PM industry. Automotive applications still dominate, making up 55.4% of the total PM market in China, followed by home appliances at 19.5%, construction machinery at 7.7%, and power tools at 6.4%. Despite the growing influence of NEVs, the underlying demand for high-performance, cost-effective, and lightweight components ensures that powder metallurgy remains a critical enabler of modern manufacturing.
The shift toward electrification, however, presents a complex challenge. Traditional ICE vehicles rely extensively on PM parts—estimates suggest that a typical gasoline-powered car contains between 10 to 20 kilograms of powder metallurgy components, primarily in the engine and transmission systems. These include sprockets, gears, connecting rods, and various structural parts that benefit from PM’s advantages in material efficiency, net-shape forming, and reduced machining. In contrast, battery electric vehicles require significantly fewer such components. A BEV may use only 3 to 5 kilograms of conventional PM parts, as the internal combustion engine and multi-speed gearbox are replaced by electric motors and simpler reduction drives.
This reduction in part count does not, however, equate to a decline in opportunity. Instead, it signals a strategic pivot. As Prof. Yang Cao of NBTM New Materials Group and Dr. Yaohong Qiu of You Need Enterprise Consulting observe, the electrification of transport is not eliminating demand for powder metallurgy—it is redirecting it. The key lies in adaptation: developing new materials, processes, and product applications that align with the technical requirements of electric vehicles and broader industrial trends.
One of the most promising areas is the development of soft magnetic composite (SMC) materials. Unlike traditional laminated steel cores used in electric motors, SMCs are produced through powder metallurgy techniques that allow for three-dimensional magnetic flux paths, reduced eddy current losses, and improved thermal management. These properties make SMCs ideal for use in stators, rotors, and other electromagnetic components in electric drivetrains. NBTM New Materials Group, China’s largest PM manufacturer, has already made significant investments in this space. In 2023, the company reported 826 million RMB in sales from SMC products—a clear indication of growing market acceptance.
Metal injection molding (MIM), another branch of powder metallurgy, is also gaining traction in the EV ecosystem. MIM enables the production of small, complex, and high-precision components that are difficult or costly to manufacture using conventional methods. In electric vehicles, MIM parts are increasingly used in battery management systems, sensor housings, charging connectors, and onboard electronics. NBTM’s acquisition of Shanghai Future Hi-Tech Co., Ltd. in 2019 marked a strategic entry into this high-growth segment. By 2023, MIM product sales had reached 1.022 billion RMB, demonstrating the viability of diversification beyond traditional PM.
Beyond the automotive sector, Chinese PM companies are expanding into renewable energy, consumer electronics, and industrial automation—fields that are themselves undergoing rapid technological change. For instance, PM components are now used in solar inverters, wind turbine actuators, and 5G infrastructure equipment. The ability to produce near-net-shape parts with tailored material properties gives powder metallurgy a competitive edge in these applications, where performance, reliability, and cost efficiency are paramount.
The push for innovation is not limited to product development. Process advancements are also playing a crucial role in expanding the capabilities of PM technology. Techniques such as die-wall lubrication and surface densification are enabling higher-density components—up to 7.5 g/cm³ and above—without the need for secondary operations like sintering or hot isostatic pressing. These high-density parts exhibit improved mechanical strength, wear resistance, and fatigue life, making them suitable for more demanding applications in both electric and hybrid powertrains.
Moreover, the integration of advanced manufacturing technologies such as additive manufacturing (AM) is opening new frontiers. While still in its early stages within the broader PM industry, metal 3D printing is being explored for prototyping, low-volume production of complex geometries, and customized components in high-performance EVs. Some leading Chinese firms are already experimenting with AM to produce lightweight structural parts, heat exchangers, and even motor cores with optimized magnetic pathways.
Despite these advances, the transition is not without hurdles. One of the most pressing challenges is the fragmentation of the industry. While CMPMA reports around 50 member companies, other estimates suggest there are over 660 PM parts manufacturers in China. Many of these are small to medium-sized enterprises (SMEs) that lack the R&D resources, scale, or international reach of larger players. This fragmentation can lead to uneven quality standards, limited innovation capacity, and vulnerability to market fluctuations.
Another challenge lies in the supply chain. Although China is a major producer of iron and alloy powders, there remains a reliance on imported high-performance materials, particularly for specialty applications in aerospace, medical devices, and premium automotive systems. Developing a robust domestic supply of advanced powders—such as spherical metal powders for MIM and AM—is essential for long-term competitiveness.
Furthermore, the pace of technological change in the EV industry demands agility. Battery architectures, motor designs, and vehicle platforms are evolving rapidly, requiring component suppliers to be equally adaptive. This means investing in digital engineering tools, real-time data analytics, and collaborative development with OEMs. Companies that can integrate early into the design phase of new EV models will have a significant advantage over those that remain reactive.
The role of policy cannot be overlooked. China’s strong governmental support for NEVs—through subsidies, infrastructure investment, and regulatory mandates—has been a key driver of market growth. In 2023 alone, NEV sales reached 9.495 million units, accounting for 31.6% of total vehicle sales. Of these, BEVs made up 70.4%, though their share declined slightly compared to the previous year, indicating a growing preference for plug-in hybrids. This policy-driven momentum creates both opportunity and pressure for the PM industry to align with national goals for energy transition and technological self-reliance.
Leading companies are responding with strategic foresight. NBTM, for example, has built a diversified portfolio that spans traditional PM, MIM, SMC, and powder forging. This multi-pronged approach reduces dependence on any single market and enhances resilience against sector-specific downturns. Other major players—such as Yangzhou Polyt, Jiangsu Yingqiu Group, and Chongqing Huafu—are following similar paths, investing in new technologies and expanding into adjacent markets.
Yangzhou Polyt, known for its oil-impregnated bearings and power tool components, has maintained a strong foothold in the automotive supply chain while exploring opportunities in industrial automation. Jiangsu Yingqiu Group has focused on enhancing its material science capabilities to serve high-efficiency motor applications. Meanwhile, emerging players like Yangzhou Haichang New Materials have demonstrated rapid growth by specializing in niche segments—Haichang reported 225 million RMB in PM parts sales in 2023, primarily serving the power tools industry.
The export market also offers growth potential. According to CMPMA, approximately 17% of China’s PM parts are exported, suggesting room for expansion in global markets. As international automakers accelerate their own electrification strategies, Chinese PM suppliers with proven quality, cost advantages, and technical expertise could become key partners in global EV supply chains. However, this will require adherence to international standards, robust quality management systems, and active participation in global industry forums.
Looking ahead, the future of China’s powder metallurgy industry will be defined by its ability to balance continuity with change. While the decline of ICE vehicles may reduce demand for certain legacy components, the rise of electrified and intelligent transportation systems creates new avenues for innovation. The same principles that made PM attractive for ICE applications—material efficiency, design flexibility, and scalability—are equally relevant in the EV era, albeit applied to different components and systems.
In fact, some analysts argue that the total value of PM content per vehicle could increase in the long term, even if the weight decreases. High-performance SMCs, precision MIM parts, and advanced structural components may command higher prices due to their specialized functions and manufacturing complexity. Additionally, as EVs become more integrated with smart technologies, the demand for miniaturized, high-reliability components will grow—another area where PM excels.
The broader industrial ecosystem in China provides a strong foundation for this evolution. The country boasts a comprehensive manufacturing supply chain, a deep pool of engineering talent, and increasing levels of R&D investment. Government initiatives such as “Made in China 2025” and the dual circulation strategy further support the development of high-end materials and advanced manufacturing technologies.
Collaboration between industry, academia, and research institutions will be crucial. Strengthening fundamental research in powder science, sintering dynamics, and material modeling can unlock new performance thresholds. Open international exchange and cooperation—rather than isolation—will ensure that Chinese PM companies remain at the forefront of global innovation.
Ultimately, the electrification of vehicles is not a threat to the powder metallurgy industry, but a catalyst for transformation. The companies that thrive will be those that embrace change, invest in innovation, and pursue strategic diversification. They will look beyond the engine bay and see the broader potential of powder-based technologies in shaping the future of mobility, energy, and digital infrastructure.
As the automotive world moves toward a cleaner, smarter, and more connected future, powder metallurgy—once seen as a mature, even traditional, manufacturing method—is proving to be more relevant than ever. In China, this relevance is being redefined not by clinging to the past, but by building a new industrial narrative grounded in adaptability, technological depth, and market insight.
The journey is ongoing, but the direction is clear: the future of powder metallurgy in China is not just about making parts for cars—it’s about enabling the next generation of advanced engineering solutions across multiple high-growth industries.
Yang Cao, NBTM New Materials Group; Yaohong Qiu, You Need Enterprise Consulting. Published in Powder Metallurgy Technology, DOI: 10.19591/j.cnki.cn11-1974/tf.2023060007