Electric Commercial Vehicle Market Size and Share Analysis by Propulsion (BEV, HEV, PHEV, FCEV), Vehicle Type (Electric Bus, Electric Truck), Battery (LFP, Li-NMC) - Global Industry Demand Forecast to 2030

Market Overview

The electric commercial vehicle market size stood at $68.9 billion in 2022, and it is expected to grow at a CAGR of 36.2% during 2022–2030, to reach $814.8 billion by 2030.

The declining cost and improving operational efficiency of batteries and the long-term cost benefits of EVs are the major factors driving the market growth. Along with these, the growing concerns over greenhouse gas (GHG) emissions and increasing government support, in the form of grants and subsidies, for such vehicles are expected to benefit the market during the forecast period.

Furthermore, all the big cities in China are substantially polluted. The government of China is, thus, focusing on improving the air quality by taking several systematic steps, which include strict emission norms and the replacement of conventional fuel-based commercial vehicles with electric variants. In most of the cities in the country, the largest source of pollution is emissions from automobiles. Therefore, the government is replacing them with eco-friendly vehicles. Thus, the auto industry in China is rapidly turning all-electric, and China’s vehicle production technologies are evolving faster than the rest of the world.

Globally, countries are cutting their traffic-related emissions and introducing thresholds for commercial automobiles. For instance, the European Union (EU) has proposed that the average carbon dioxide emissions from heavy-duty commercial vehicles in 2030 be at least 30% lower than in 2019. Major European manufacturers are, hence, producing such vehicles, in order to achieve the stated target.

Growing Concerns over GHG Emissions

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. 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.

BEVs Outsell Other Types of Commercial EVs

BEVs held the largest market share, over 60%, in 2022, in terms of value, 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.

Declining Cost and Improving Operational Efficiency of Batteries

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.

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, which, 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.

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APAC Makes Largest Contribution to Global Revenue

The APAC electric commercial vehicle market had more than 80% share in the global sales revenue in 2022, much of which 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. India is also adopting concrete policies to include electric buses in government and private fleets.

Moreover, the North American market is projected to witness significant growth during the forecast period, owing to the stringent emission norms and government support, in the form of tax rebates, grants, and subsidies. In the North American region, the U.S. was the early adopter of EVs, prompted by such a strong government focus on clean transportation, thus making the larger contribution to the market.

Specifically, under the Low Nitrogen Oxide Engine Incentives and Hybrid and Zero Emission Truck and Bus Voucher Incentive Project (HVIP), the California Air Resources Board provides vouchers to the qualifying fleets to decrease the incremental cost of the eligible hybrid, natural gas, and battery electric trucks and buses. Only fleets that operate in California qualify for the vouchers, which range from $2,000 to $315,000, on a first-come, first-served basis.

Europe Is Expected To Witness Steady Growth over Forecast Period

Owing to the stringent government regulations pertaining to carbon emissions, growing number of electric vehicle manufacturers in the region, and entry of conventional diesel-based vehicle manufacturers in the commercial electric vehicle market, the region is expected to witness steady growth, around 25%, during the forecast period. Many overseas and regional companies have launched their offerings in recent years anticipating the growing demand for commercial electric vehicles in the region.

For instance, in November 2018, Nikola Motor Company, a U.S.-based electric truck manufacturer, unveiled the Nikola Tre, a hydrogen-powered electric semi-trailer truck, for its European customers. Similarly, in May 2018, VDL Groep partnered with DAF Trucks NV to develop a fully electric truck, which was to be delivered later in 2018, for commercial use.

Top Electric Commercial Vehicle Producers Are:

• Zhengzhou Yutong Bus Co. Ltd.
• BYD Company Limited
• Zhongtong Bus Holding Company Limited
• Proterra Inc.
• AB Volvo
• Dongfeng Motor Corporation
• Hino Motors Ltd.
• Nikola Corporation
• Workhorse Group Incorporated
• Isuzu Motors Ltd.

Electric Commercial Vehicle Market Size Breakdown by Segment

This fully customizable report gives a detailed analysis of the market from 2017 to 2030, based on all the relevant segments and geographies.

Based on Propulsion

• Battery Electric Vehicle (BEV)
• Hybrid Electric Vehicle (HEV)
• Plug-in Hybrid Electric Vehicle (PHEV)
• Fuel Cell Electric Vehicle (FCEV)

Based on Vehicle Type

• Electric Bus
  • >10 m
  • <10 m
• Electric Truck
  • Light-duty truck (LDT)
  • Medium-duty truck (MDT)
  • Heavy-duty truck (HDT)

Based on Battery

• Lithium–Iron Phosphate (LFP)
• Lithium–Nickel–Manganese–Cobalt Oxide (Li-NMC)

Geographical Analysis

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • U.K.
  • France
  • Italy
  • Spain
  • Netherlands
  • Norway
• Asia-Pacific
  • China
  • Japan
  • South Korea
• Rest of the World
  • Brazil
  • U.A.E.