Electric Truck Market Poised for Fast Growth, Says Analysis Firm

January 15, 2019 by John O'Dell

After a sluggish 2018, the electric truck market this year will begin a multiyear run of double-digit increases, a British analyst firm is predicting.

The nearly sixfold growth from just under 180,000 units in 2019 to 1.2 million in 2025 will be pushed largely by sales in China. Increased emissions regulations in Asia and Europe also will play a major role, according to the new report by Interact Analysis.

Awareness in the trucking industry that electrification can reduce fuel and maintenance costs also is increasing, Rueben Scriven, a trucking electrification analyst with Interact, told Trucks.com.

Operating cost savings, along with steadily decreasing prices, will be an important driver of electric truck sales in the U.S. in coming years, but will be less significant in Europe than the regulatory climate, he said.

Growth in the U.S. market will be slower than in Europe and Asia because of its low diesel prices and the lack of significant regulatory push, Scriven said. Electrified trucks will account for less than 1 percent of new truck sales in the U.S. in 2025, compared with about 5 percent globally, he said.

Millions in sales

The Interact report predicts global sales of slightly more than 4 million battery-electric, plug-in hybrid and conventional hybrid trucks – most of them light and medium-duty models – from now through 2025 after a 12 percent sales decline in 2018.

That drop, to about 155,000 electrified trucks from just over 175,000 in 2017, came largely on the heels of a significant reduction in state-sponsored subsidies in China. Concerns about the overall state of the economy and the impact of a potential trade war with the U.S. “may have also negatively influenced the market” in China, the report noted.

Outside of China, however, the electric truck market actually grew by 63 percent in 2018, Interact found.

Smaller e-truck market

Smaller, independent truck electrification specialists such as Orange EV and Chanje dominate the market now with medium  and heavy-duty models. But large, established truck manufacturers are joining the race and can be expected to play a big role in future growth, according to the report.

Volvo has said it would be electrifying its FE and FL truck series. DAF, a division of Paccar Inc., has partnered with VDL Group and Cummins to electrify its CF and LF trucks. Freightliner, Daimler Truck’s U.S. brand, recently introduced the eM2 medium-duty electric truck and the eCascadia – an electric version of the most popular long-haul truck in North America. Paccar’s Peterbilt Motors division just this month unveiled a new medium-duty electric chassis for regional freight, deliver and refuse truck use.

Peterbilt unveiled this medium-duty electric truck chassis at the CES2019 technology expo earlier this month. (Photo: Alan Adler/Trucks.com)

R&D investments

Major investments in electric truck and bus research and development also were also announced, with Daimler saying it would spend $3.2 billion in the next few years and Volkswagen allocating $1.7 billion.

Volkswagen and its MAN Truck and Bus unit entered the market in 2018, and Nissan reported more than 7,000 orders for electric trucks, setting 2019 up to be a record year for the company’s electric truck unit.

The established truck makers should “begin to acquire significant market share in the medium- and heavy-duty markets” by 2020, the report said.

The increase in electric trucks will also create a secondary market for depleted battery packs, the report said. The lithium-ion batteries are still good for power storage when they can no longer handle truck duties.

“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,” the report said.

2019 sales

For 2019, Interact is estimating global sales of 163,000 light-duty electrified trucks, 12,250 medium-duty models, and just over 3,500 heavy-duty trucks. Heavy-duty sales will include 1,900 regional delivery and distribution trucks and slightly more than 1,600 long-haul models.

Estimated 2019 sales of 179,563 e-trucks represent less than 1 percent of the market. But If the number swells to 1.2 million in 2025, that would be just under 5 percent market share, Scriven said.

Read next: CES 2019: Peterbilt Joins Growing Electric Medium-Duty Truck Crowd

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