Electric Commercial Vehicle Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

Electric Commercial Vehicle Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

The Global Electric Commercial Vehicle Market was valued at USD 67.51 billion in 2021, and it is expected to reach USD 258.78 billion by 2027, registering a CAGR of 25.10% during the forecast period.

The COVID-19 pandemic struck the market and brought challenges to the whole automotive industry. Lockdowns in many nations limited the sales of vehicles across the globe and disrupted the entire supply chain. Affected by COVID-19, the global electric commercial vehicle market is attracting growing attention to its post-pandemic industry trends. It is expected the industry would pick up the pace gradually in the coming years, with companies gaining momentum by economic growth.

The adoption of electric vehicles is fairly visible in many emerging economies, thanks to a substantial expansion in areas such as logistics and supply chain companies. Additionally, strict pollution regulations in several nations globally are pressuring many corporations to electrify their vehicles, which is driving the market forward. Governments globally are putting pressure on vehicle manufacturers to reduce carbon emissions caused by diesel fuel combustion and tackle greenhouse gas emissions, pushing them to invest in developing electric vehicles. Meanwhile, low-emission zones are driving fleets to replace diesel trucks with cleaner options.

The market is growing because of developments in battery technology and the usage of extensively in providing the most up-to-date features to their products, encutting-edge technologies like ADAS, AI, IoT, and others. Major companies invest hancing OEM rivalry and assisting the market's growth. Many countries are attempting to adopt electric mobility, but charging infrastructures remain a big worry as new vehicles enter the market.

Currently, diesel vehicles are majorly used globally. Moreover, these vehicles tend to be used majorly in cities with more populated density, and around these areas, air quality has already been degraded by other pollutants. While electric buses are still more expensive than their diesel-powered counterparts, data shows that they can have a lower total cost of ownership and are competitive with diesel buses when comparing lifetime costs over 12 years, thanks to simplified drivetrains that offer better efficiency and lower maintenance costs.

In the United States, the EPA and NHTSA proposed the implementation of the Safer Affordable Fuel-Efficient (SAFE) vehicles rule to be effective from 2021 to 2026. The rule may set the standards for corporate average fuel economy and greenhouse gas emissions for passenger and commercial vehicles. The Zero-emission Vehicles (ZEV) Program requires OEMs to sell specific numbers of clean and zero-emission vehicles (electric, hybrid, and fuel cell-powered commercial and passenger vehicles). The ZEV plan aims at putting 12 million ZEVs (including buses) on the road by 2030 in the country.

Europe has an ambitious goal to become a climate-neutral continent by 2050. To achieve this target, the European Commission announced a multitude of new legislative proposals. The different national targets for new clean buses range from 24% to 45% in 2025, and from 33% to 65% in 2030, depending on each country's population and GDP.

• In January 2020, the European Union approved an increase of EUR 300 million for Germany to aid the purchase of electric bus and charging infrastructure, taking the total to EUR 650 million. In Germany, the government is anticipating quarter of buses to be electric by 2025.

Electric buses offer more comfort to travelers compared to gasoline or diesel buses. The NVH levels in electric buses are minimal, unlike traditional diesel buses, providing enhanced comfort to passengers. The limited vibrations and moving mechanical parts during its operation extend the vehicle's life, reduce maintenance costs, and offer comfort to passengers. Electric buses help reduce 81-83% of the maintenance and operating costs compared to diesel-engine buses.

The electric commercial vehicle market is expected to be led by Asia-Pacific, followed by Europe and North America. The growing government regulations improving electric vehicles adoption and robust expansion adopted by OEMs and suppliers in the region to accommodate rising demand from the automotive industry in China are expected to create a positive outlook for market growth during the forecast period. For instance,

• The government of China is encouraging people to adopt electric vehicles. The country has already made plans to phase out diesel fuel, which runs the current generation of tractors and construction equipment. The country is planning to completely ban diesel and petrol vehicles by 2040.

The state governments in the India are including electric buses in their fleet in order to convert their ICE fleet of buses and reduce the operational cost while also reducing carbon emissions and improving the air quality. For instance,

• In March 2021, the Delhi government approved a proposal to procure 300 new low-floor electric (AC) buses to increase the number of buses in the city. The upcoming buses will be inducted into the Delhi Transport Corporation (DTC). The first lot of 118 buses will arrive in October this year, while November will see an addition of 100 buses. As many as 60 buses will arrive in December, while the remaining 20 buses are likely to be received by January 2022.

Japan has one of the best electric vehicle ecosystems in the world. Automotive companies like Toyota and Nissan are taking steps toward building electric vehicles in the country. The developments in the hybrid and electric vehicle market can be gauged by the presence of a large number of electric vehicle charging stations in the country, which outnumber the petrol and diesel outlets. These favorable factors are expected to drive the market for commercial electric vehicles and drive the demand for commercial electric vehicles in Japan.

• In 2020, the Japanese government proposed a carbon neutral goal of achieving zero carbon emissions by 2050. To achieve its environmental protection goals, Huis Ten Bosch introduced pure electric buses, despite disruptions of the COVID-19 pandemic.

A few major players dominate the electric commercial vehicle market, namely BYD Auto Co. Ltd, AB Volvo, Daimler AG, Zhongtong Bus Holding, and Traton SE.

The manufacturers develop commercial electric vehicles through joint ventures, partnerships, and transforming their existing IC engine fleet into electric. For instance,

• Volvo Trucks, Sweden's AB Volvo's main truck brand, aims to sell a complete range of electric, heavy-duty trucks in Europe from 2021.
• In April 2021, Daimler and Portland General Electric (PGE) unveiled a new first-of-its-kind electric truck charging station in Portland, Oregon.

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