The Electric Construction Equipment Market is estimated to grow from USD 9.2 billion in 2022 to USD 24.8 billion by 2027 at a CAGR of 22.0% over the forecast period. Strict vehicular emission regulations and high ventilation costs in underground mining drive the development of the electric off-highway equipment market during the forecast period
The government’s initiatives to boost the sustainable mobility developments and the increasing demand for emission-free farming equipment are some of the major factors that drives the electric agricultural equipment market. The increasing agricultural production in countries such as China, India, US, and Brazil also drive the demand for electric agricultural equipment. The demand for farm equipment with modern technologies such as electric and hybrid tractors is expected to rise. Many leading manufacturers are actively developing such electric tractors including Kubota, Fendt, Sany Heavy Industries, Soletrac Inc, and others. The demand for electric tractor is mainly driven by factors such as moving focus on improved grain quality, growing adoption of advanced farming machinery, shorter downtime, and improved operational efficiency.
The key factors driving the growth of the construction and mining equipment market are the availability of battery electric and hybrid electric, the power output, and output ratio. Presently, mining companies are using battery electric equipment for surface mining, while hybrid electric equipment is predominant in underground mining. The large number of surface mines around the globe has driven the battery electric construction and mining equipment market, by propulsion.
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The Emission Control Technologies (ECT) are used to control and reduce the emission from an engine, without changing much of the engine design. Some of the modern ECT are Selective Catalytic Reduction (SCR), Gasoline Particulate Filter (GPF), Exhaust Gas Recirculation (EGR), Diesel Particulate Filter, various sensors including oxygen sensor, NOx sensors and thermal management technologies. Though the ECT are one of the cost-effective solutions to meet the rising emission norms, there is an increased manufacturing cost of the equipment. Some ECT devices also lead to loss of power and other downfalls such as reduction in fuel economy, varied back pressure in prolonged use, more maintenance activities, etc. All these expenses including the increased capital for the vehicle, results in extended return on investment (ROI) duration of the customers.
To overcome these difficulties and the costs associated with it, the manufacturers and customers opt for an alternative sustainable mode of mobility. This greatly aided the development of the hybrid and electric off-highway equipment and equipment, which are efficient, emission free and noise free than its IC engines counterparts.
The battery technology is greatly developing and advancements in all aspects can be observed in recent times. The safety advantages of lithium ion over the over lead-acid batteries, is driving the demand for lithium-ion equipped off-highway battery electric vehicles. Moreover, the need for an efficient battery thermal management system is also greatly increasing with the development of more advanced battery systems.
Leading manufacturers are investing in the development of new battery technologies and the other batteries are predicted to lead the market during the forecast period. The ongoing developments in solid-state battery technology are expected to increase the commercialization of such technologies in off-highway battery electric vehicles.
Moreover, the initial cost of an electric off-highway equipment around 80%-100% higher than conventional equipment because of high cost of the batteries. However, with advancements in the battery technology, the cost of the battery as well as overall equipment is expected to decrease. Though when considering the high cost of electric equipment, the demand is expected to be steady in near future, the market would showcase a promising growth in longer run. In near future, OEMs are expected to prefer hybrid or alternate fuel engines to achieve a balance between the limits and cost of the equipment.
The increasing noise pollution in cities is becoming a potential hazard because of a greater number of constructions that happen within the city limits and most of the metropolitan cities have imposed noise regulations and restrictions in the construction sites. It is mainly the diesel-powered construction machines, which are the major reasons for the noise generated in residential construction sites.
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According to the WHO, approximately 44% of the European population is affected by road and vehicle noise, leading to severe health issues among people. Moreover, an HSE reports states that in the UK alone, nearly 17,000 people suffer from deafness, ringing in the ears, or other ear conditions caused by excessive noise. To counter this, countries are working toward regulations to control the noise generated by construction equipment.
Additionally, the city of London is working on a trial of NRMM projects that limit emissions and noise from construction equipment. The London and Paris city corporations are working in tandem on the most ambitious plans and schemes to ban or significantly reduce all polluting vehicles in residential areas.
With all these emerging regulations and initiatives, construction companies prefer the electric off-highway equipment. These machines are designed with the decibel levels making them apt for working within city limitations without any restrictions. This leverages the construction companies to work during the daytime within the city limits, thereby allowing them to complete their work faster and saving expenses.
The increasing awareness related to emissions and noise generation, along with presence of a strict regulatory framework for the off-highway equipment, is expected to drive the European electric off-highway equipment market during the forecast period. The growth of the electric off-highway equipment market in Germany is mainly because of the rising demand for the emission-free, noiseless, eco-friendly construction and mining equipment that are less expensive to operate. Moreover, the presence of many leading electric off-highway equipment manufacturers in Germany and the various initiatives by the governments to promote sustainable mobility are the key reasons for the country to dominate the European market.
For instance, the Berliner Stadtreinigung (BSR), Germany’s largest municipal waste management company, purchased nine Volvo L25 Electric wheel loaders in 2021. The 5-ton electric machines were used in the Berlin metropolitan area, to push waste from the city’s 26,000 garbage bins into boxes and transfer the waste to compacting containers. These electric loaders are also employed to keep the Berlin’s roads free of snow and ice during winter.
Another important industry in Germany is its agriculture industry. Germany’s agricultural sector is in the top four largest producers in the European Union. According to the World Bank collection of development indicators, the total agricultural land in Germany was around 47.64 % in 2018. At such a large scale of agricultural activity, the demand for more productive and autonomous technology are increasing. This provides the opportunity for the development of electric tractors. These electric tractors meet all the emission regulations and are also noiseless in operation. The autonomous electric tractors are greatly improving the productivity and eliminates the challenge of labor shortage.
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