The global commercial electric vehicle market generated revenue of $144.5 billion in 2017 and is expected to reach $362.7 billion by 2025, exhibiting a CAGR of 13.3% between 2018 and 2025. The growth of the market is mainly attributed to the increasing concern over greenhouse gas (GHG) emissions.
APAC was the largest and the fastest growing region in the commercial electric vehicle market during the historical period, and is expected to continue to grow at the fastest rate during the forecast period. This is majorly because of the Chinese government’s commitment to increase the share of electric buses in the transportation system of the country, and reducing prices and improving operational efficiency of batteries.
Dynamics of Commercial Electric Vehicle Market
The declining cost and improving operational efficiency of batteries is a major growth driver for the commercial electric vehicle market. According to industry experts, the average price of Li-ion battery packs for large orders declined from around $642/kWh in 2012 to around $209/kWh in 2017. As the battery accounts for around 40% of the commercial electric vehicle manufacturing cost, any decline in the battery price would help manufacturers cut down on the selling price of these vehicles, which would, in turn, boost their sales. Moreover, the increase in the battery production, particularly in China, would help achieve economies of scale, thereby lowering the battery prices during the forecast period.
The growing adoption of commercial electric vehicles in developing economies is creating lucrative opportunities for the players in the commercial electric vehicle market. Over the past few decades, the urban population in many developing countries, including India and Brazil, has risen at a significant rate. As per the statistics provided by the World Bank for 2017, urbanites constituted about 34% and 86% of the total population in India and Brazil, respectively. Thus, the high concentration of urban people in these countries has led to an increase in the demand for commercial vehicles, further resulting in higher air pollution levels. The various macroeconomic factors responsible for the increase in the demand for commercial vehicles are the prospering e-commerce and retail industries in the developing economies and increasing freight movement.
Commercial Electric Vehicle Market Segmentation Analysis
Based on propulsion, battery electric vehicles (BEV) are expected to hold the largest share in the commercial electric vehicle market, both in terms of volume and value, during the forecast period, owing to the increasing government support in the form of subsidies, incentives, and other financial benefits, to promote the adoption of eco-friendly commercial electric vehicles.
In terms of vehicle type, electric trucks held the larger share in the commercial electric vehicle market, in 2017. The sales volume of the electric trucks falling under the heavy-duty truck (HDT) category is predicted to register the fastest growth during the forecast period, due to the rapidly increasing freight demand across the globe and significant economic growth in developing countries, such as China.
On the basis of cell format, round cells are expected to be the fastest growing category, in terms of value, in the commercial electric vehicle market during the forecast period. Round cells offer the highest energy density, of around 250 Wh/kg, followed by pouch cells, which provide an energy density of around 190 Wh/kg; this is a notable difference of about 25%.
Global Scenario of Commercial Electric Vehicle Market
The APAC region is the largest commercial electric vehicle market, led by China. The favorable government subsidies and stringent emission norms and fuel-based vehicle replacement targets are the major factors driving the demand for commercial electric vehicles in China.
The commercial electric vehicle market in other parts of the world is still in its nascent phase and depends largely on government policies. The presence of few electric bus manufacturers and comparatively higher upfront costs than internal combustion engine-based buses have restricted the sales of these vehicles in regions, other than APAC. However, the manufacturers in these regions are investing heavily for the development of commercial electric vehicles, which is anticipated to drive the market growth during the forecast period.
Competitive Landscape of the Commercial Electric Vehicle Market
The global commercial electric vehicle market is moderately fragmented in nature, where all the major players are taking strategic measures to gain a competitive edge. Some of the major manufacturers of electric buses are AB Volvo, Alexander Dennis Ltd., Alstom–NTL, Anhui Ankai Automobile Co. Ltd., Ashok Leyland Ltd., Bluebus SAS, Bozankaya A.S., BYD Co. Ltd., Caetanobus - Fabrico De Autocarros E Carrocarias S.A., Chariot Motors, Dongfeng Motor Corp., Ebusco B.V., Nanjing Golden Dragon Bus Co. Ltd., Proterra Inc., and Tata Motors Ltd. The major electric truck manufacturers are Cummins Inc., E-Force One AG, Hino Motors Ltd. Isuzu Motors Ltd., Iveco S.p.A., Nikola Corp., Nissan Motor Co. Ltd., Scania AB, and Workhorse Group Inc.
Recent Strategic Developments of Major Commercial Electric Vehicle Market Players
In recent years, the major players in the commercial electric vehicle market have taken several strategic measures, such as product launches, mergers and acquisitions, and facility expansions, to gain a competitive edge in the industry. For instance, in August 2018, Zhongtong Bus Holding Co. Ltd. launched a 12-meter magnesium alloy electric bus model, LCK6120EVQG, in China. The bus comes equipped with advanced technologies and is made of carbon fiber and magnesium alloy materials, which has cut down its total weight by 26%, thus making it lighter and more energy-efficient. Further, in September 2018, Mercedes-Benz, a subsidiary of Daimler AG, announced its plans of beginning practical trials for eActros, an all-electric heavy-duty truck.
Key Questions Addressed/Answered in the Report
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