Commercial Electric Vehicle Market Overview
The global commercial electric vehicle market size is expected to cross 1,839.4 thousand units, growing at a CAGR of 18.1% during the period 2018–2025. The declining cost and improving operational efficiency of batteries, and long-term cost benefits of these vehicles are the major factors driving the market growth. Along with these, growing concerns over greenhouse gas (GHG) emissions and increasing government supports in the form of grants and subsidies for these vehicles over conventional fuel-based commercial vehicles are expected to benefit the market during the forecast period.
Based on propulsion, the commercial electric vehicle market has been categorized into battery electric vehicle (BEV), hybrid electric vehicle (HEV), plug-in hybrid electric vehicle (PHEV), and fuel cell electric vehicle (FCEV). Among these, BEV category is anticipated to hold the largest market share, during the forecast period. Provision of incentives, subsidies, and other financial benefits offered by governments to stimulate the operation of eco-friendly vehicle are the major factors driving the growth of the BEV market.
On the basis of type, commercial electric vehicle market has been categorized into electric bus and electric truck. The market for electric bus grew at faster rate, with a CAGR of 75.4% in terms sales volume during the period 2013-2017. Increasing replacement sales and long-term cost benefits of electric buses are the factors for their propulsion in the market. Furthermore, large demand for electric buses from end users, including public-transit operators and city governments, is an impetus to the robust adoption of these vehicles.
Based on length, electric bus market is further categorized into less than 10 m and more than 10 m. Of the two categories, electric buses with less than 10 m length are expected to hold larger market share. This can be majorly attributed to the high preference for small buses in China and other developing countries. The low cost of these buses is another key factor that will continue driving their market growth across the globe. Similarly, electric truck market is further categorized into light-duty truck (LDT), medium-duty truck (MDT), and heavy-duty truck (HDT). Sales volume for the electric trucks falling under the HDT category is anticipated to register the fastest growth as compared to other categories, globally.
Geographically, APAC led by China, held the major share in the commercial electric vehicle market during the historical period. The Chinese government’s commitment to increase the share of electric vehicle in transportation system of the country, reducing battery prices, and improving operational efficiencies are some of the major factors driving the sales of electric vehicles in the country.
Commercial Electric Vehicle Market Dynamics
Declining cost and improving operational efficiency of batteries, growing environmental concerns over greenhouse gas (GHG) emissions, increasing replacement sales, and long-term cost benefits of these vehicles over their conventional counterparts are the foremost factors stimulating the growth of the commercial electric vehicle market, globally.
In order to minimize emissions from diesel-based commercial vehicles, the governments are supporting the adoption of electric vehicles by announcing financial incentives schemes for the purchase of these vehicles. Major regulatory measures, stringent emissions targets for nitrogen oxides (NOx) and carbon dioxide (CO2), and anticipated diesel bans in various cities across the world, such as Paris, Madrid, and Mexico City, are supporting the growth of commercial electric vehicle market.
At present, there are around 200 cities in Europe with access regulations and low-emission zones, led by the U.K., Germany, and Italy. With France and the U.K. having already announced bans on the fossil-fuel vehicle sales starting from 2040, the major truck manufacturers, under this direct regulatory pressure, are shifting from the conventional diesel trucks to the electric ones. Also, some countries, including Norway and India, are striving to meet their electric vehicle penetration targets in an attempt to fulfil their commitment to reduce CO2 emissions under the Paris Agreement. The diesel bans and other emission regulations are forcing the commercial vehicle manufacturers to include electric vehicle model in their product offerings, thereby driving the growth of the commercial electric vehicle market.
The high cost of commercial electric vehicles is the most dominant factor hindering their large-scale adoption, especially in developing countries. These vehicles are generally costlier than their conventional diesel- and CNG-based counterparts. The average price of these vehicles is three-to-four times the cost of diesel-based commercial vehicles, and most of this cost can be attributed to the cost of battery packs used in these vehicles. In many countries, the procuring agencies, public as well as private, do not have adequate funds and infrastructure to include commercial electric vehicles into their fleets, despite the financial support received from the central government. Also, the commercial electric vehicle market is in its nascent phase and the production is considerably low due to the underdeveloped commercial electric vehicle ecosystem, which result in the high cost of these vehicles.
Commercial Electric Vehicle Market – Competitive Landscape
Companies in the commercial electric vehicle market are taking strategic measures to increase their market share. These strategic moves range from mergers and acquisitions to business expansions and partnerships. To gain a competitive edge over other players in the market, companies are focusing on improving their existing product portfolio and entering into collaborations with other key players to expand their market reach.
The major players in the global commercial electric vehicle market are Zhengzhou Yutong Group Co. Ltd., BYD Auto Co. Ltd., Zhongtong Bus & Holding Co. Ltd., Nanjing Golden Dragon Bus Co. Ltd., Zhuhai Yinlong New Energy Ltd., Futian Ouhui Bus, AB Volvo, Zhuhai Yinlong New Energy Ltd., Futian Ouhui Bus, AB Volvo, Hino Motors Ltd., Isuzu Motors Ltd., Iveco S.p.A., Nissan Motor Co. Ltd., Workhorse Group Inc., Daimler AG, Cummins Inc., Nikola Corp., and Tesla Inc.