Energy expansion and transition
The demand for electricity is expected to double by 20501, driven by the electrification of transport, industry, and buildings, including the rapid expansion of data centers and AI which is significantly increasing electricity use. Customers are increasingly investing in electrification as it often reduces both operating costs and capital expenditures. In addition, electrification will be essential for achieving net-zero emissions. Decarbonization has started, and electrification can accelerate a shift from fossil fuels to renewable energy sources. Our technologies play a key role in both supporting the energy transition and meeting rising energy demand, helping us contribute to progress and innovation in these essential sectors.
Footnotes:
1. IEA World Energy Outlook 2025, Current Policies Scenario (CPS)
Decarbonization of industries
Industry currently accounts for approximately 25 percent1 of global greenhouse gas (GHG) emissions, making it a critical focus for decarbonization. Electrification is a key pathway for decarbonization, as it often results in a lower total cost of ownership compared to fossil-based systems. For example, electric motors and variable speed drives offer higher energy efficiency, reduced maintenance, and fewer mechanical components, resulting in lower operating costs over time. This cost advantage, especially when paired with renewable electricity, strengthens the business case for electrification. While electrification leads the way, complementary solutions such as hydrogen and carbon capture remain essential for decarbonizing harder-to-abate industrial segments. With more than half of our revenues linked to the electrification and automation of industry, ABB’s offering supports industries in their transition toward electrification and cleaner energy sources. Our technologies support production optimization processes, electrify industrial machinery, and increase the energy efficiency of motor-driven applications, helping industries decarbonize.
Footnotes:
1. International Energy Agency (IEA)
Energy efficiency
Investments in energy efficiency are expected to rise due to growing energy demand, energy security concerns, and the need to reduce operational costs.
Our energy-efficient solutions – such as variable speed drives, high-efficiency motors, and energy management systems – are designed to optimize energy use, reduce waste, and improve operational performance across industries. As a result, we enable customers to reduce operating costs by reducing energy consumption and shrinking their carbon footprint.
Digitalization and AI
The accelerating adoption of AI and digitalization is reshaping industrial operations and infrastructure. The global data center market is projected to grow at a double-digit rate in the mid-term1, with power capacity potentially reaching over 200 GW, almost four times the 2023 capacity. This surge in demand is speeding up the move to more energy-efficient and scalable data centers to support the growing data needs for agile, data-driven operations and demand for electrical infrastructure in adjacent segments, such as metals & mining, utilities, and semiconductors. AI-driven data centers require significantly more power, leading to higher demand for medium-voltage solutions. As a leader in this area, ABB offers a robust portfolio for data centers, addressing customer challenges regarding growing power and direct grid access needs, and mission-critical power access.
AI is integral to our evolution, as we continuously seek opportunities to create customer value and drive improvements in our operations. In our decentralized operating model, we share best practices through our AI council. The council also monitors progress of initial ideas, turning into one of the approximately 250 ongoing AI projects, and ultimately into an implemented solution. Our solutions use analytical and generative AI to improve internal efficiency and enhance our offering to customers. For example, we use AI to generate insights from large sets of unstructured data, optimize processes and the utilization of assets, allow automation of new skills, and simplify the interaction between humans and machines. A prime example is Genix™ Copilot, which integrates generative AI to contextualize industrial data to deliver real-time insights for improved efficiency, predictive maintenance, and sustainability optimization. Genix™ Copilot translates the potential of generative AI into practical, actionable insights for field engineers, functional specialists, and industry executives – supporting collaborative decision-making and boosting productivity. In addition, the Genix™ Agentic Automation framework enables real-time monitoring, contextual interpretation, and autonomous actions, while ABB’s human-in-the-loop, semi-autonomous approach ensures users remain in control throughout the process. These capabilities, alongside digital twins and AI-driven process control, enable customers to boost efficiency, lower operating costs, and accelerate their digital transition.
Footnotes:
1. Management estimate
Evolving supply chains
Recent policy shifts by governments are accelerating the move toward regionalization and localization. Rising tariffs, protectionist trade measures, and national industrial policies are prompting companies to reconfigure global supply chains for greater resilience and control. Businesses are increasingly investing in localized production, supplier diversification, and advanced technologies to mitigate risk and maintain competitiveness in a fragmented global landscape. For ABB, our decentralized business model enables us to support customers with our localized electrification and automation products and solutions offering. At ABB, we have a strong tradition of local-for-local manufacturing, enabling us to stay close to customers. Although we are a global company, we take a local approach to our offering, localizing R&D and tailoring our product portfolio to the local market, where conditions allow. Approximately 95 percent1 of our revenues in Europe are covered with local production. In China, it is 85 percent1 and in the United States close to 80 percent1.
Footnotes:
1. Management estimate
Value creation
Decentralized business model
ABB continues to evolve into a more agile and efficient company....
Our strategic priorities
Our strategic priorities guide decision making and resource allocation across our decentralized organization, ensuring alignment, consistency, and focus on long-term value creation....
ABB raises margin and return targets
The company targets steady growth across the economic cycle, with 5%–7% average comparable growth excluding FX effects, acquisitions, and divestments....
We enable a low-carbon society
Supporting the development of a low-carbon society is one of the most significant ways that ABB can contribute to environmental sustainability....
We preserve resources
As our world becomes more resource constrained, ABB is committed to safeguarding natural resources throughout our value chain....
We promote social progress
ABB aims to deliver positive social impact, not only in our own business but in our value chain and communities, too....