Sluggish Chinese market offset by explosive growth in other markets
Light duty trucks to account for lion’s share of volumes
Just over 4 million electric trucks sold in next 7 years
To date, the European and North American battery electric truck markets have been dominated by start-ups and new brands such as Chanje and StreetScooter as well as light duty truck OEMs such as Nissan and Renault.
In 2018, the market saw several other incumbent truck OEMs join the race towards electrification for the first time. Volvo announced it would be electrifying its FE and FL truck series, DAF partnered with VDL Groep and Cummins respectively to electrify its CF and LF trucks and Daimler’s US brand, Freightliner, released the eCascadia – an electric version of the most popular long haul truck in North America – and the eM2. Significant investments were also announced with Daimler and Volkswagen allocating $3.2 and $1.7 billion, respectively, in electric truck and bus R&D.
Despite the positive headlines, the global battery electric truck market contracted by 12% in 2018 owing to a decrease in demand from China. This was primarily due to a subsidy reduction of RMB 75,000 ($11,000) although the tit-for-tat trade war with the US and the looming threat of a Chinese economic slowdown may have also negatively influenced the market. Excluding China, however, the global battery electric truck market grew by a strong 63%.
Excluding Chinese OEMs, StreetScooter remained the market leader while MAN Truck and Bus and Volkswagen entered the market for the first time with the TGE van and eCrafter, respectively. In addition, Nissan received over 7000 orders thanks to the updated e-nv200 with its 40 kWh battery pack, however, deliveries only began in May resulting in a large backlog. As such, Nissan’s market share for 2018 was significantly lower compared to 2017 and 2019 is set to be a record year for Nissan as it looks to clear its backlog.
We expect that the incumbent truck OEMs will begin to acquire significant market share in the medium- and heavy-duty markets by 2020/21 following their initial tests with customers. Until then, however, smaller electric truck OEMs such as Orange EV and Emoss will continue to dominate these segments albeit with low volumes.
Battery electric truck market to grow 20% in 2019
Several new truck models will hit the market in 2019 after being announced last year and, in line with current trends, we expect several new electric trucks to be announced such as the medium-duty electric truck displayed by Peterbilt at this year’s CES in Las Vegas
Just under 180,000 battery electric trucks will be sold in 2019 with most of the demand coming from China. Outside of China, we forecast that just over 50,000 electric trucks will be sold; an 81% increase from 2018. Because of the high cost associated with large battery packs, the heavier truck segments will have a small share of the market while the light- and medium-duty segments will combine to make up 98% of the global battery electric truck market.
In 2019, several low emission zones will be implemented across the globe ranging from Euro 3 to Euro 6 emission restrictions (or equivalent). The majority will come from the UK with several others being implemented in China, The Netherlands and The Czech Republic.
Strong and sustained growth
Interact Analysis forecasts that just over 1.2 million electric trucks will be sold annually in 2025. The EU27 and APAC will make up the majority of the demand while the Middle East, Africa and South America will experience relatively sober growth. The US and Canada will experience moderate growth in absolute volumes but the number of electric trucks as a percentage of the total trucks sold in 2025 will only be 0.7% and 3.6% respectively.
Because the up-front cost difference between a hybrid and a battery electric light-duty truck is marginal, most operators will choose the battery electric option. As you increase the weight of the vehicle, however, the price difference between the two increases, despite the TCO benefits of the battery electric truck. Hybrid trucks will therefore be more prevalent in the heavier-duty segments although battery electric drivetrains will remain dominant in all applications.
Electric commercial vehicles typically have fewer moving parts than their combustion engine counterparts, meaning that revenue generated from maintenance and servicing will likely be reduced. Given that there will be over 4 million new electric trucks entering the global market in the next 7 years, the provision of new services such as grid management and on-site power generation will become important new revenue streams. New Flyer, Nikola, Chanje and Nissan have taken this approach and many more will follow suit.
Importantly, in markets that adopt electric trucks, the vehicle is becoming less central to the transportation solution, which invites other industries to enter the market. For example, utility companies are positioned well to join the eco-system whereby they supply the charging infrastructure, grid-management and on-site power generation with the potential to lease battery electric commercial vehicles as well.
The data from this insight comes from our recently published Hybrid and Electric Trucks and Buses – 2019 market report. Click here to download the report brochure and sample pages.
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