Electric Commercial Vehicle Market to Reach 3,144 Thousand Units by 2030
The global electric commercial vehicle market size is projected to grow from 353 thousand units in 2022 to 3,144 thousand units by 2030, at a CAGR of 31.4%. The electric commercial vehicle market will be growing due to factors like the growing demand for zero emissions commuting, government subsidies & tax rebates and plans of automakers for adopting to electrification of their vehicles.
Concerns about the changing environment due to excessive pollution by the automotive industry is one of the prime reasons for government bodies to promote zero emission vehicles over Petrol or Diesel ones. OEMs have started developing plans to welcome an all electric future for their upcoming vehicle lineups. This includes development of electric buses, vans, pickups and trucks. To attract and encourage people to buy ECV’s, governments around the world are introducing lucrative schemes and incentives that include discounts, lower vehicle acquisition taxes, easier applicability of loans etc. for electric commercial vehicles.
Driver: Rising prices of fossil fuels will increase demand for ECVs due to lower cost of electricity
According to the US Energy Information Administration (EIA), 97.45 million barrels per day were consumed in 2021. The prices of petrol in the international market have been rising over the years except for exceptional times such as the COVID-19 pandemic. The increase in prices is due to the high demand for petrol. Since it is a non-renewable energy resource, it is expected to be exhausted during the next few decades. Fluctuations in the demand and supply of petrol lead to increasing prices. Even though various treaties have been formed to control petrol prices in the international market, prices have risen over the years. As most of the countries are required to import petrol, its usage contributes to lowering the balance of trade of the economy. The limited petroleum reserves and rising fuel prices have led automakers to consider alternative fuel sources for their vehicles. Petroleum prices have doubled in the past few decades and are expected to grow further due to the Russia-Ukraine war in 2022. This is expected to lead to another push to shift to EVs to reduce daily traveling costs worldwide. The tax rates also affect the price of fossil fuels around the world. The US has the lowest tax on fuel (19%), while India has around 69% tax on fuel. All these factors have pushed fuel prices around the world in the past 2 decades. The cost of operation of ECVs, is much lower than conventional ICE commercial vehicles. This will lead to a growth in demand for electric commercial vehicles due to their lower operation cost compared to the high price of using ICE commercial vehicles.
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Opportunity: Development of wireless EV charging technology for on-the-go charging to fuel market
The wireless technology for on-the-go charging has been under development for the past few years. Once this technology matures, people will not need to charge their vehicles as these are expected to be automatically charged while in use. This technology is currently significantly high priced but may be used in the coming decades. It is expected to significantly impact the EV market as the sales are expected to increase at a high rate when this technology is applied. As of 2021, wireless EV charging is available for stationary charging. In Norway, a trial of wireless on-the-go EV charging is undertaken, which is expected to cater to a 25 Oslo-based fleet of Jaguar I-pace taxis and enable charging. The Norwegian capital has launched an initiative called ElectriCity, which aims to make its taxi system emission-free by 2024.
The BEV segment to be the largest segment during the forecast period
An electric vehicle that runs completely on a battery is termed a BEV. The vehicle runs with the help of a permanent magnet motor powered by a battery installed in the vehicle. The average range of BEVs is 150 to 200 miles and varies based on battery type installation. The buses, vans, and trucks installed with the BEV propulsion system are generally used for intracity travel purposes. Since intracity is the most common application for these vehicles, BEVs are expected to witness strong demand in the near future. The electricity used to power the vehicles costs less than diesel fuel, which further lowers the operational costs for buses. With advancements in battery technology and a continuous decrease in battery prices, the overall costs of BEVs are expected to decrease in the near future. Transit agencies in the US and several other countries are purchasing pure battery-electric buses at increasing rates, and this trend is expected to accelerate in the coming years. In addition, maintenance costs for electric motors are much lower because they have far fewer moving parts than conventional motors and are far more efficient. In November 2021, NFI (Canada) announced its first order from the University of Michigan for up to 54 battery-electric buses. BYD, Yutong, Proterra, and Ankai offer advanced pure electric buses incorporated with innovative technologies. For instance, Ankai’s HFF6705BEV electric bus is a 17-seater BEV with a maximum speed of 100 km/h. OEMs are focused more on launching BEV buses, which would be a driving factor for the BEV market in the coming years. For instance, in September 2020, Proterra introduced its newest battery-electric transit vehicle, ZX5 electric bus. Its fifth-generation battery-electric transit bus features a new streamlined vehicle design. It maximizes the energy stored onboard the vehicle to increase power and range. BYD, AB Volvo (Sweden), and PACCAR (US) offer advanced electric trucks and electric pick-up trucks incorporated with innovative technologies.
Key Market Players
The electric commercial vehicle market is dominated by established players such as BYD (China), Yutong (China), AB Volvo (Sweden), VDL Groep (Netherland), and CAF (Spain). The market ranking has been derived by considering ECV sales and a certain percentage of segmental revenue for each of the companies mentioned above. These companies also offer extensive products and solutions for the automotive industry. These companies have strong distribution networks at the global level, and they invest heavily in R&D to develop new products.
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