Market Overview
The global electric commercial vehicle market revenue was valued at USD 84.90 billion in 2022. It is projected to reach USD 641.72 billion by 2031, growing at a CAGR of 25.20% during the forecast period (2023-2031). The logistics sector is embracing electric cars for commercial use, with firms planning green supply chains in the next five to ten years. More businesses are adopting electric vehicles to curb transportation pollution, initiating the deployment of electric cars in logistics.
Electric commercial vehicles are those that derive their propulsion from a battery pack. These automobiles are classified as light, medium, or heavy-duty. Governments in numerous nations are enacting strict emission regulations, encouraging fleet owners to adopt electric trucks and buses. In addition, electric commercial vehicles are silent, produce no emissions, and are an economical means of transportation, making them the favored option for fleet owners. In addition, the governments of several developing nations are taking steps to provide sufficient charging infrastructure for electric vehicles to facilitate future operations. Due to significant growth in industries like logistics and supply chain organizations, the adoption of electric vehicles is evident in many growing economies.
Additionally, the industry is progressing because of the harsh pollution restrictions in many nations worldwide that are pressing many businesses to electrify their automobiles. Governments worldwide are pressuring automakers to invest in the development of electric vehicles to minimize carbon emissions brought on by the combustion of diesel fuel and combat greenhouse gas emissions. Meanwhile, low-emission zones push fleets to switch out diesel trucks for cleaner models. The market is expanding due to advancements in battery technology and the increased use of cutting-edge technologies like ADAS, A.I., IoT, and others to provide their goods with the most modern features.
Market Dynamics
Market Drivers
Growing Use of Electric Buses
Currently, diesel cars are widely utilized throughout the world. Additionally, these cars are frequently used in cities with higher population densities, where other pollutants have harmed local air quality. Although electric buses are still more expensive than their diesel-powered counterparts, data shows that they can have a lower total cost of ownership and are comparable to diesel buses when lifetime costs are compared over 12 years. This is because they have simpler drivetrains, which are more efficient and require less maintenance.
The Safer Affordable Fuel-Efficient (SAFE) cars regulation was intended to be implemented in the U.S. by the EPA and NHTSA, and it would go into force between 2021 and 2026. The law may establish minimum requirements for greenhouse gas emissions and company average fuel economy for passenger and commercial vehicles. OEMs must sell some clean and zero-emission vehicles under the Zero-emission Vehicles (ZEV) Program (electric, hybrid, and fuel cell-powered commercial and passenger vehicles).
Market Restraint
High Cost of Vehicles and Infrastructure for Charging
Government organizations and transit agencies frequently employ rigid financial management strategies encouraging low-cost, low-risk procurement. Most procurement methods need to consider the unique cost structure of e-buses and the related infrastructure, which is more expensive initially but less costly to operate than traditional buses. Traditional procurement procedures do not provide responsibility for the novel e-bus operational activities, such as grid and battery infrastructure upkeep.
Although the overall lifetime cost of owning e-buses is frequently lower than that of conventional buses, and agencies may understand the need for a new procurement strategy, it is often challenging to shift established models.
Market Opportunities
E-Commerce And Logistics Sector Developing
One industry that has seen tremendous growth since the COVID-19 pandemic is e-commerce. The logistics delivery services presently offered by logistics companies are crucial to the e-commerce sector. These companies deploy automobiles in their fleets through leasing. The industry is looking for partners who can provide a complete mobility solution to support its tremendous growth. A mobility solutions business presents a significant opportunity to grow and succeed. This supply chain needs electric vehicles because they provide a high-demand service sector with healthy profit margins and scalability. Utilizing E.V.s in the intermediate and last miles of connectivity offers significant mobility solution potential when used as delivery vehicles. A 2/3-wheeler's final mile is crucial since client satisfaction is ultimately based on performance.
The logistics sector has historically welcomed the commercial deployment of electric cars. Many logistics firms are actively attempting to develop a green supply chain during the next five to ten years. A growing number of businesses are introducing electric vehicles to help cut down on transportation-related pollution. The deployment of electric cars would start in the logistics sector.
Regional Analysis
The global electric commercial vehicle market is divided into four regions: North America, Europe, Asia-Pacific, and LAMEA.
Asia-Pacific's electric commercial vehicle industry size is expected to grow at a CAGR of 25.30% during the forecast period. Due to its small oil reserves, India has become one of the world's major oil importers. The Indian government is promoting the purchase and use of green energy cars and is looking at electric vehicles as a potential answer to this issue. Even though there have been several obstacles to the adoption of electric vehicles, including a lack of available charging infrastructure, reliance on imported batteries, parts, and components, and the high cost of E.V.s, the Indian government is working to create a shared, connected, and electric mobility option.
North America is expected to grow at a CAGR of 25.20% during the forecast period. For instance, the country's transit agencies anticipate significant fuel cost savings from introducing electric buses. The electric commercial vehicle market in the United States will be driven by all of the elements above and numerous investments in the sector. Canada has been one of the North American nations to install electric buses most quickly because of solid backing and rising investments from local manufacturers and governments.
In the German public transportation industry, electric buses nearly doubled in 2020 over 2019. Only a few buses were powered by fuel cells and other technologies, whereas most e-buses were battery-powered. More than 3,000 e-buses will be added by local transportation providers and government agencies by 2025. The first eActros were donated by Daimler Truck to German coordinated operations groups in 2022. Five months later, Daimler started producing series in southwestern Germany. The eActros 300 will be used by DB Schenker to transport palletized goods in the Leipzig area, and the Dachser has already accepted delivery of another unit.
Due to the low vehicle sales, other nations in the region, including Uruguay, Ecuador, Guatemala, Puerto Rico, and Bolivia, are also projected to have modest growth. Bolivia, Ecuador, and Peru are three nations where the automobile market is expanding. The region of South America has seen an increase in demand for electric trucks over the last few years. The market is being driven by elements like achieving energy efficiency through emissions reduction, the need to address future energy requirements, the anticipated rise in the adoption of electric trucks for logistical and governmental uses, and investments made by OEMs to begin producing electric vehicles in the area.
Segmental Analysis
The electric commercial vehicle industry is segmented by vehicle type, propulsion, and power output.
The global electric commercial vehicle market is bifurcated based on vehicle type into Buses, Trucks, Pickup Trucks, and Vans.
The buses segment is the highest contributor to the industry and is estimated to grow at a CAGR of 17.80% during the forecast period. The fuel cost is a sizable portion of any vehicle's running expenses. Utilizing an electric bus for public transportation lowers the total cost of ownership and other upfront costs, in addition to the rising fuel cost. Prices for electric buses are predicted to match those for diesel buses by 2030. Compared to buses powered by gasoline or diesel, electric buses provide passengers with more comfort. Also, the NVH levels in electric buses are low, improving passenger comfort. Electric buses help to cut down on maintenance and operational costs by 81–83%.
The government initiatives encourage market participants to choose investment plans, the expansion of e-commerce and logistical activities, and the market participants' cooperation to secure their market positions. These factors are anticipated to increase demand for electric pickup trucks. There has been an increase in the need for electric pickup trucks. The need for light commercial vehicles is relatively high in the municipal and logistical sectors, where there needs to be more focus on range. There has been a noticeable increase in the need for electric pickup trucks for personal use, particularly in European and North American countries. Automakers like Ford, General Motors, and Volkswagen have intensified their efforts on electrified production vehicles in light of this.
The pricing viability of the vehicles in comparison to traditional I.C. vans will heavily influence the uptake of commercial vans. Additionally, the cost of the battery and electrical parts (such as the power distribution module, converters, cables, and chargers) is relatively higher. In contrast, the total cost of ownership is affordable due to the higher drivetrain efficiency, lower fuel costs, and reduced maintenance costs by more than 40%. However, as electronics technology advances and battery production technology continue to grow, the price will decline by around 25% by the end of the projected period.
Based on propulsion, the global electric commercial vehicle market is bifurcated into battery electric vehicles, plug-in hybrid electric vehicles, and fuel cell electric vehicles.
The battery-electric vehicles segment is the highest contributor to the market and is estimated to grow at a CAGR of 23.80% during the forecast period. Due to the rapidly expanding use of electric mobility worldwide, businesses that move goods are likewise replacing their current fleets of vehicles with those powered by electric propulsion. OEM is revising its electric vehicle plan. Globally, governments have taken the initiative to develop laws promoting the use of electric vehicles. Before 2040, China, India, France, and the United Kingdom intend to phase out the production of gasoline and diesel automobiles.
In general, plug-in hybrid electric vehicles use less gasoline than comparable conventional ones and have lower emissions, higher efficiency, and lower maintenance costs. Customers concerned about mileage are drawn to vehicles that can convert from battery to gasoline, diesel, or vice versa, depending on the cargo and road conditions. Most counties lack adequate charging infrastructure, and a sizable portion is occupied by traditional users, which is anticipated to slow the adoption of plug-in hybrid automobiles worldwide. Major manufacturers have announced the production and expansion of plug-in hybrid electric cars for the upcoming years.
The supply of hydrogen as a primary energy carrier, the high cost of fuel cell electric cars (FCEVs), and infrastructural needs are just a few of its difficulties. In addition, nations have recently revealed their long-term plan and strategic objectives for beginning the development of hydrogen energy. According to the Hydrogen Council, by 2050, hydrogen will be used to produce 18% of the world's energy. Over 350,000 trucks and at least two million new cars will reportedly include fuel cell technology by 2030. For various uses, fuel cells and battery-electric vehicles will coexist. Fuel cells are especially suitable for light and medium commercial vehicles due to their superior total cost of ownership, performance, excellent range, and reduced refilling time.
Based on power output, the global electric commercial vehicle market is bifurcated into Less than 150kW, 150-250 kW, and Above 250 kW
The 150-250 kW segment is the highest contributor to the market and is estimated to grow at a CAGR of 24.20% during the forecast period. Reassessing the available transportation options is now more critical than ever. The effective use of the available space, materials, and energy is required due to the expanding global population, urbanization, and motorization, as well as growing worries about climate change and the scarcity of resources. Global emission targets, which call for innovative transportation solutions, can quantify the need to reduce emissions. A medium-sized electric commercial vehicle might be crucial to the outcome.
Heavy-commercial electric vehicles are projected to impact the sales of cars in the above 250 kW power output category as they most frequently fall into this category. Heavy-duty electric vehicles are slowly finding a place in the logistics sector as they have lower operating costs and are subject to stricter government emission regulations. Tier-1 automakers are involved in R&D, design, and manufacturing since they require a lot of capital. For instance, General said in January 2022 that the business is dedicated to developing a heavy-duty truck. By the end of 2035, the vehicle is anticipated to be launched.
The supply of hydrogen as a primary energy carrier, the high cost of fuel cell electric cars (FCEVs), and infrastructural needs are just a few of its difficulties. In addition, nations have recently revealed their long-term plan and strategic objectives for beginning the development of hydrogen energy. According to the Hydrogen Council, by 2050, hydrogen will be used to produce 18% of the world's energy. Over 350,000 trucks and at least two million new cars will reportedly include fuel cell technology by 2030. For various uses, fuel cells and battery-electric vehicles will coexist. Fuel cells are especially suitable for light and medium commercial vehicles due to their superior total cost of ownership, performance, excellent range, and reduced refilling time.
Top Key Players
BYD Auto Co. Ltd
Proterra Inc.
AB Volvo
Daimler AG
Tata Motors Limited
Ford Motor Company
Tesla Inc.
Traton SE
Rivian Automotive Inc.
and Yutong Bus Co. Ltd.
Others
