Why are transformers highly efficient machines?

Transformers achieve 95-99% efficiency because energy transfer is electromagnetic with no moving parts, eliminating mechanical losses. The main losses are: core losses (hysteresis and eddy currents, constant regardless of load) and copper losses (I^2R in windings, vary with load squared). Proper core materials (silicon steel laminations) minimize core losses, and adequate conductor sizing minimizes copper losses. Large power transformers routinely exceed 99% efficiency.