WHAT IS PROPELLING THE GROWTH OF THE ELECTRIC TRUCK MARKET?
While trucks play a significant role in the growth of any market, they are also responsible for creating severe impacts on the environment. Additionally, these vehicles are major consumers of global oil demand, which is 17 million barrels per day. At present, targeted efforts to modernize road freight transport is expected to reduce oil demand from road freight vehicles, by nearly 16 mb/d, by 2050.
Even though fleet managers prefer traditional trucks for their high reliability and strong pulling power, owing to continuous technological developments, commercial vehicle manufacturers are launching electric trucks. In addition to the technological advancements, the enactment of stringent emission and fuel economy norms for commercial vehicles, are also forcing manufacturers to shift toward the electric trucks segment, in order to suffice the norms set by the governments and international organizations. This, in turn, has resulted in an increase in the cost of traditional trucks.
Factors, such as cost parity of electric trucks with diesel alternatives; local and national regulations that are environment-friendly; and electrification readiness, are also propelling the demand for e-trucks.
However, at the same time, there are certain risks associated with the adoption of e-trucks, such as new vehicles must prove to be dependable, consumers need to be educated, and dealers and customers will require training. Furthermore, there are challenges in managing the new supply chain and setting up production of the new vehicles.
WHAT ARE THE MAJOR TRENDS IN THE ELECTRIC TRUCK MARKET?
The adoption of electric vehicle (EV) technology in the freight sector appears to be increasing faster than expected, presenting a major challenge for the diesel-fuelled truck market.
Numerous OEMs have been investing and developing models to resolve the technical challenges specific to electric trucks. With the development and product life cycles extending more than a decade in some segments, for instance, currently, the product lifecycle for heavy trucks in the United States is 15 years, and it will take time for the commercial vehicle industry to offer an extensive portfolio of electric trucks. At present, the light-duty truck (LDT) segment is the focus of current product-launch announcements, which is more technologically similar to passenger cars. Numerous LDT models are expected to launch, around or before 2020, along with seven new LDT launches planned towards the end of 2018, and production is expected to increase accordingly, as well. Interestingly, there is a rise in the number of model announcements made in the heavy-duty truck (HDT) segment, which is expected to reach its total cost of ownership parity for the average user, by 2030. For instance, more than twelve OEMs have announced launches, or have started fleet testing new HDTs and city buses, since 2016, and are likely to increase around 2020.
EFFECTS OF GOVERNMENT REGULATIONS ON THE ELECTRIC TRUCK MARKET
Stringent emissions norms & targets and the chances of bans on diesel engines, in many Chinese, European, and urban areas in the United States, are expected to increase the demand for electric trucks. The implementation of regulations for commercial vehicles is expected to be faster, than that for passenger cars. For instance, the European Union enforced regulations for commercial vehicles much sooner, in comparison to passenger cars, which took more than 15 years to suffice new standards. Additionally, France and the United Kingdom have already announced their first timelines for passenger zero-emission zones.
In the United States, the national regulations are expected to implement a 25% reduction in carbon-dioxide emissions, by 2027. However, this reduction alone may not be able to drive the electric truck market, as other technologies may also contribute to the market growth, such as aerodynamic improvements, improved engine efficiency, and low rolling resistance tires.
IMPACT OF ELECTRIC TRUCKS ON THE ENERGY MARKET
Trucks contribute to more than one-third of the global diesel demand, 9% of the global oil demand, and nearly 3% of the global energy demand. Impact on diesel use by trucks is likely to have a significant effect on the overall diesel and oil demand.
However, it may take time to register the impact of electrification, because the majority of diesel is consumed in the heavy truck segment, which is expected to be the last segment to switch to electric trucks. The impact of electric trucks on the global oil demand by 2030 is expected to be modest, offsetting an increase in demand in non-OECD countries. By the end of 2050, increased adoption of electric trucks could replace 3.5% of the global oil demand. In terms of power demand, the above mentioned switch may add 0.3% to global electricity consumption by 2030, which may further increase to 3% by 2050.
About the Electric Truck Market
The global electric truck market is expected to grow at a steady pace over the forecast period, as it has been able to maintain a relatively positive growth over the past couple of years.
Mordor Intelligence is a market intelligence and advisory firm, operating in 14 industry segments, serving over 600 clients, worldwide.