Due to the implementation of strict emission norms by the governments of several countries, the demand for eco-friendly vehicles has increased massively. This is driving the expansion of the global electric off-highway vehicles market. As a result, the market generated a revenue of ~$7 billion in 2020. Moreover, with the enactment of these regulations, many automotive manufacturing companies are shifting their focus from internal combustion engine-powered vehicles toward automobiles having alternative powertrains.
Additionally, the surging requirement for emission-free and low-noise construction machines, especially in residential areas, is also fueling the growth of the electric off-highway vehicles market. Due to these factors, the electrification of off-highway vehicles, including those used in the construction industry, is rising rapidly. This is because of the fact that the necessary technologies are rapidly becoming affordable and mature. For example, AB Volvo is providing a range of electric compact equipment such as L25 electric compact wheel loader and ECR25 electric compact excavator.
The latter uses batteries that are paired with an electric motor that powers the hydraulics and allows the vehicle to operate for 8 hours on a single charge. Depending on application, the market is classified into agriculture, mining, and construction. Out of these, the construction category dominated the market in 2020. This is ascribed to the increasing urbanization rate and the subsequent rise in the demand for residential buildings and infrastructure development across the world.
Moreover, the soaring construction activities in several countries are propelling the expansion of this category in the market. When battery type is taken into consideration, the electric off-highway vehicles market is categorized into lead-acid and lithium-ion (Li-Ion). Between these, the Li-ion category held larger share in the market in 2020. Further, the same category is expected to contribute the highest revenue to the market in the forthcoming years, on account of the fact that these batteries have better energy efficiencies, low self-discharging rates, and high power-to-weight ratios.
Across the globe, North America is predicted to hold the largest share in the electric off-highway vehicles market till 2030. This is attributed to the implementation of environmental protection initiatives for controlling the carbon footprint and reducing the emissions generated from the construction industry in the region. For example, 15 states and the District of Columbia have aimed to have 100% of all new heavy- and medium-duty vehicle sales to be of emission-free variants by 2050. Further, the rising demand for electric mining dump trucks, electric tractors, electric lawnmowers, electric loaders, electric excavators, and electric dozers is massively augmenting the sales of electric off-highway vehicles in the region.
Hence, it can be said without any hesitation that the demand for electric off-highway vehicles will explode in the coming years, primarily because of the growing adoption of electric vehicles, on account of the surging air pollution levels and enactment of favorable government initiatives, and increasing construction and infrastructural development activities in several countries.