The Off-highway Electric Vehicle Market is projected to reach USD 29.8 billion by 2027 from an estimated USD 4.9 billion in 2019 at a CAGR of 25.2%. With the increase in global emission levels and stringency of emission norms, manufacturers face operational issues in reaching an optimum balance between the output received, cost incurred, and profit margins. Growing stringency of emission norms for off-highway vehicles has shifted the focus of manufacturers on alternate powertrain sources such as their electrical counterparts. Such factors are driving the market.
The construction application is estimated to hold the largest share of the off-highway electric vehicle market during the forecast period
Emission regulations have a significant impact on the market for construction equipment. Growing environmental concerns and awareness of the harmful effects of vehicular emissions have forced OEMs to focus on electrification of construction equipment. This, in turn, has resulted in increased spending on R&D activities for electrification of construction equipment. This requirement, along with emission regulations, has boosted the market for electric construction equipment. As per MarketsandMarkets analysis, in 2019, construction application constitutes a major share of the off-highway electric vehicle market. Mini excavator has the largest market share in the electric construction equipment market.
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The electric propulsion segment is expected to be the fastest-growing market for off-highway electric vehicles during the forecast period
The electric propulsion market is expected to grow at the fastest rate during the forecast period due to increasing stringency in emission regulations. The industrial equipment emission norms are being continuously upgraded across different regions. According to the EU norms, NOx and PM levels have reduced by nearly 95.7% and 97.2%, respectively, from Stage I to Stage V. Also, as per the US EPA norms, NOx and PM levels have declined by 95.6% and 96.2%, respectively, from Tier I to Tier IV. Countries such as China, Japan, South Korea, and India are also following similar norms in line with these standards.
Volvo CE, Hitachi Construction Machinery, JCB, and Caterpillar, among other companies, have not only extended their electric offerings for off-highway vehicles but also initiated R&D efforts for the same. Due to these stringent emission norms and need for increased operational efficiency, the electric propulsion type market is expected to grow at the highest CAGR during the forecast period.
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Europe to lead the off-highway electric vehicle market by value
Europe is expected to lead the off-highway electric vehicle market, in terms of value, during the forecast period. Countries such as Germany, France, the UK, and Spain are the key markets. In Europe, construction and mining activities have long been drivers of economic growth, providing natural resources and access to trade and transport, and it is expected to be the driving force behind the European off-highway electric vehicle market.
Some of the prominent players in the off-highway electric vehicle market are Volvo CE (Sweden), Caterpillar (US), Komatsu (Japan), Hitachi Construction Machinery (Japan), and JCB (UK).