Commercial Electric Vehicle Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2032)

Commercial Electric Vehicle Market Dynamics

Growing Concerns over GHG Emissions Drive Market

• The growing concerns of environmental agencies and government over the increasing urban vehicular emissions, which are leading to air quality degradation, have prompted the formulation of stringent emission control policies.
• As per the EU, global emissions touched 53.0 Gt CO_2eq in 2023, despite efforts on the local, state/provincial, national, and international levels to limit them.
• Therefore, the Paris Agreement is in force, envisioning a limitation of the average global temperature to 1.5 degrees Celsius above the levels recorded before the First Industrial Revolution.
• Currently, conventional automobiles fueled by diesel are integral to the public transportation system, but lead to high levels of emissions.
• Thus, stringent policies are being implemented to limit these emissions, which, combined with the rising awareness of people about protecting the environment, is propelling the low- and zero-emission vehicle adoption across the world.
• In order to cut down the emissions from conventional diesel-based commercial vehicles, including trucks and buses, many governments have announced a ban on their use, which will come into effect in some of the countries as early as 2030.
• Further, governments are supporting the adoption of automobiles running on alternative fuels by announcing financial incentives on their purchase.

Declining Cost and Improving Operational Efficiency of Batteries Offer Opportunities

• As the battery accounts for a significant share of the electric vehicle sales cost, any decline in the battery price would help manufacturers cut down the price of these vehicles, thus boosting their sales.
• Moreover, the increase in the battery production, particularly in China, would help achieve economies of scale, thereby further lowering the battery prices during the forecast period.
• They already fell by 20%, to USD 115 per kWh in 2024.
• Additionally, with technological advancements, the battery capacity is likely to increase, to meet the demand for a longer driving range.
• Thus, manufacturers are working to rise the energy density of these energy storage devices and use raw materials other than cobalt, which is rather expensive.
• This, in turn, would make these batteries more energy-efficient and cost-effective, respectively.
• Just like ICE vehicles, the costs of which have reduced with decades of experience in manufacturing, the cost of EVs too would continue to fall during the forecast period.

Inadequate Charging Infrastructure Hampers Market Growth

• One of the crucial pillars for the long-term success of electric vehicles is the presence of adequate infrastructure, which includes charging stations, and a mature value chain ecosystem, which involves participation of players such as utilities and financial institutions.
• Although the commercial electric vehicle infrastructure and value chain ecosystem are evolving, they are currently underdeveloped to support the market growth.
• As per estimates, the number of EV charging stations will need to increase by 5 times by 2030 to support the EV demand and make them viable.
• Many countries have a limited number of charging stations for logistics (trucks) and public transportation (buses) vehicles. Besides, the subsidy for installing a charging station is quite low, considering the initial investment and the payback period.
• Also, the support from other entities, such as electricity utilities, financial institutions, service providers, and leasing companies, is inadequate.

Segmentation Analysis

Insights by Propulsion

BEVs held the largest market share, over 60%, in 2024, in terms of value, and it will also witness the higher CAGR over the forecast period. This is owing to the strong government support, in the form of subsidies, incentives, and other financial benefits, to promote the usage of eco-friendly vehicles.

China is a major market for commercial BEVs. According to the newly released third phase of the subsidy policy of China, bus operators receive higher subsidies on BEVs compared to PHEVs. Besides, major manufacturers are focusing on adding BEVs to their product portfolios, which is further boosting the market growth across the nation.

Moreover, the North American market in this category is projected to witness significant growth during the forecast period owing to the stringent emission norms and tax rebates, grants, and subsidies for such vehicles. Owing to these reasons, in the region, the U.S. is the larger market for battery-powered buses and trucks.

Several other initiatives have been also taken by the government of the U.S. to encourage the implementation of electric buses and trucks in the country, including exemption from emission tests, vehicle inspections, and toll charges. Furthermore, the key players in the U.S. are developing new bus and truck models with enhanced capabilities and improved performance. Thus, the developments in models, complemented by the installation of simplified and quicker charging systems, are expected to result in the replacement of conventional buses and trucks with their electric counterparts.

Additionally, in order to ease the burden of the high upfront costs, new business models are being focused upon, such as commercial vehicle sharing, battery leasing, and joint procurement, which are further enhancing the market growth potential.

These propulsions were analyzed:

• Battery Electric Vehicle (BEV) (Largest and Fastest-Growing Category)
• Hybrid Electric Vehicle (HEV)
• Plug-in Hybrid Electric Vehicle (PHEV)
• Fuel Cell Electric Vehicle (FCEV)

Insights by Vehicle Type

Electric buses are the larger category because of the huge demand for electric buses by city governments and public transit firms. In addition, the long-term cost benefits of electric buses and increasing replacement sales are other reasons for the rising sales of electric buses. In this regard, national and state governments in India and China are highly significant as they operate and have ordered thousands of electric buses. For instance, Delhi Transport Corporation (DTC) induced 350 electric buses in February 2024 and another 320 in July.

Electric trucks will have the higher CAGR during the forecast period, of 28%. This will be due to the rapidly increasing freight demand across the globe and significant economic growth in developing countries, such as China. For instance, in August 2024, AB Volvo received an order from DVS for 300 electric trucks. In all, DSV plans to have over 2,000 electric trucks in its fleet by decade-end.

These vehicle types were analyzed:

• Bus (Larger Category)
  • >10 m
  • <10 m
• Truck (Faster-Growing Category)
  • Light-duty truck (LDT)
  • Medium-duty truck (MDT)
  • Heavy-duty truck (HDT)

Insights by Battery Type

The LFP category dominated the commercial electric vehicle market in 2024 with 65% value share. LFP batteries are safer than other batteries available in the market and are therefore more preferred for heavy-duty electric buses and trucks.

During the forecast period, the fastest growth in the market is expected from NMC battery-powered commercial electric vehicles. With increasing investments for the development of advanced NMC batteries, the safety levels offered by these batteries are expected to come at par with those offered by LFP batteries.

These batteries were analyzed:

• Lithium–Iron Phosphate (LFP) (Larger Category)
• Lithium–Nickel–Manganese–Cobalt Oxide (Li-NMC) (Faster-Growing Category)
• Others

Commercial Electric Vehicle Market Regional Outlook

The APAC commercial electric vehicle market held the largest share in 2024, of 50%, and it will also witness the highest CAGR, of 27%, during the forecast period. Much of the market growth in the region can be attributed to the sales in China. The Chinese government’s commitment to increase the share of such buses in the transportation system of the country, reducing battery prices, and improving operational efficiency are some of the major factors driving the sale of such automobiles in the country.

As per the International Energy Agency (IEA), 50% of the heavy commercial vehicle sales in China in 2023 were electric. The country also had 85% of the EV fast chargers in the world in 2023.

India is also adopting concrete policies to include electric buses in government and private fleets. The government hopes to increase the number of electric buses in public fleets by 38,000 by 2027. In July 2024, Maharashtra had 2,111 operational electric buses, Delhi had 2,011, Karnataka 1,195, Gujarat 894, and Uttar Pradesh 758. As per the IEA, India also funded the installation of 7,000 EV fast chargers in 2023.

These regions and countries were analyzed:

The regions and countries analyzed for this report include:

• North America
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe
  • Germany (Largest Country Market)
  • U.K. (Fastest-Growing Country Market)
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (APAC) (Largest and Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • Japan
  • India (Fastest-Growing Country Market)
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest Country Market)
  • Mexico (Fastest-Growing Country Market)
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest Country Market)
  • South Africa
  • U.A.E. (Fastest-Growing Country Market)
  • Rest of MEA

Commercial Electric Vehicle Market Share

• The market is severely fragmented as only a few companies have large shares, most of which are based in China.
• With governments around the world promoting clean mobility, local OEMs are finding encouragement to shift to electric vehicles.
• Additionally, while some companies dedicatedly offer trucks, others offer buses; only a handful of companies offer both.
• The proliferation of OEMs in both these segments, buoyed by government subsidies, incentives, and other forms of policy and financial support, essentially fragments the market.
• Moreover, the advent of autonomous vehicles further encourages disruptive startups to raise funding and work in this regard.