Off-highway Electric Vehicle Market Size, Share & Trends Analysis Report By Application (Construction, Agriculture, Mining), By Electric Vehicle, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global off-highway electric vehicle market size was valued at USD 4.42 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 31.7% from 2022 to 2030. Stringent emission norms for off-highway vehicles have been implemented by various government establishments, such as regulations for Greenhouse Gas (GHG) emissions by the U.S. Environmental Protection Agency (EPA), China VI, and India BS-VI. This has encouraged equipment manufacturers to focus on alternative powertrain sources such as full and hybrid off-highway electric vehicles, thus driving market growth.

The electrification of off-highway heavy-duty vehicles is increasing and OEMs are keen to discover how this new trend can complement their existing business models. With factors such as battery technology, supply, and overall economics favoring electric vehicles, the trend for electrification of vehicles is expected to gain traction in the coming years. Charging infrastructure, battery technology, and total development cost play a significant role in the adoption of electric solutions. The electrification of off-highway vehicles assures long-term cost savings owing to less maintenance and reduced fuel consumption.

Rapid growth in ESG investing, which uses environmental, social, and governance criteria, promotes the development of off-highway vehicles for construction and mining applications. Stringent emission norms restrict the emission of Nitrogen Oxide (NOx) and particulate matter. To reduce such emissions, off-highway vehicle manufacturers are developing innovative ways to accomplish zero emissions.

According to Construct Connect, the construction industry is responsible for at least 11% of CO₂ emissions. The European Union (EU) established a stage 5 emissions standard, which came into effect in 2019. Since European emission norms keep changing, equipment powered by diesel engines could be discontinued in the future. Electric alternatives for such equipment in mining and construction applications are expected to drive the demand for off-highway electric equipment.

The world economy has witnessed a setback due to the COVID-19 pandemic. Lockdowns implemented in various parts of the world led to disruptions in the supply chains and a temporary ceasing of production at several production facilities. The market was considered most vulnerable during the pandemic owing to its dependency on global sourcing for its fundamental technology-batteries.

Europe, one of the most prominent regions in the acceptance of off-highway electric vehicles, is witnessing a sharp decline in equipment sales. In April 2020, the Europe forestry and agricultural machinery production decreased by around 10%. Moreover, new orders for construction machinery in the U.S. reduced by approximately 12% in April 2020 compared to the previous year.

Application Insights

The construction segment accounted for the largest revenue share of around 38.2% in 2021. The segment includes electric construction equipment such as electric loaders and electric excavators. Increasing investments by governments worldwide in developing public infrastructure is one of the primary factors driving the growth of the segment. The electrification of smaller types of equipment is the focus of the construction sector. The battery technology and electric propulsion are well-suited to smaller machines owing to lower power demands.

The electrification of underground mining equipment helps to reduce exhaust emissions and improve worker safety. Several large mining companies have started addressing the challenge of electrification and diesel displacement. The use of diesel-powered off-highway vehicles increases the operational cost due to the need for a significant amount of exhaust ventilation infrastructure to keep the working environment safe.

According to Atlas Copco, the cost of energy to power large-scale ventilation systems accounts for up to 30% of an underground mine's total running costs. The cost of ventilation systems can be reduced from 30% to 50% by using fully-electric machines that produce zero diesel emissions.

The agriculture segment is projected to register a CAGR of 32.8% from 2022 to 2030. The segment includes electric agricultural equipment such as electric harvesters and electric tractors. Consumers in North America and Europe are adopting modern farm equipment and advanced agriculture processes to gain higher yields. Electrification of farming equipment can also leverage automation to help overcome labor challenges, enabling laborers to concentrate on other important tasks. The demand for hybrid and electric tractors and other farm equipment is expected to increase over the forecast period.

Electric Vehicle Insights

The Hybrid Electric Vehicle (HEV) segment accounted for the largest market share of 58.8% in 2021 and is anticipated to dominate the market from 2022 to 2030. The hybrid electric vehicle is designed to augment the use of the internal combustion engine in collaboration with the electric powertrain. Stringent emission norms laid down by government authorities such as the U.S. EPA and European Commission have boosted the demand for hybrid propulsion off-highway equipment, encouraging vehicle manufacturers to develop environmentally-friendly off-highway vehicles.

Since 2017, off-highway vehicle manufacturers have been adopting hybrid engines featuring diesel-electric propulsion systems. These diesel-electric hybrid drive systems enable engine down speeding, allowing users to run a smaller engine at a lower rpm and, thereby, providing fewer parts movement and high fuel efficiency. All these factors are expected to contribute to the growth of the hybrid electric vehicle segment.

The BEV segment is projected to register the highest CAGR of 40.0% from 2022 to 2030. The growth of the segment can be attributed to the restrictions on CO₂ emission and the slowdown in the adoption of Internal Combustion Engine (ICE) vehicles. However, most off-highway vehicles require high power to function, thus the use of BEV is still limited. The advancements in battery technology and reduction in lithium-ion battery prices are expected to drive the demand for BEVs over the forecast period.

Regional Insights

The North American market accounted for the largest revenue share of 42.0% in 2021 and is anticipated to continue dominating the market from 2022 to 2030. The growth can be attributed to the presence of key companies such as Deere & Company, CNH Industrial N.V., and Caterpillar in North America. Moreover, the growth of the construction industry in the region is further driving the demand for off-highway electric equipment.

The U.S. has implemented strict regulations for curbing harmful emissions. According to the United States Environment Protection Agency (EPA), in 2018, off-highway equipment constituted nearly 30% of the total greenhouse gas emission. The increasing GHG emissions have prompted companies to launch electric models of their off-highway vehicles in the market.

The Asia Pacific market is projected to register the highest CAGR of 46.6% from 2022 to 2030. Countries such as India and China recorded a strong performance in 2020 owing to a boost in infrastructure investments. China is a major contributor to the manufacturing of construction equipment owing to the presence of numerous OEMs, low labor cost, low production cost, and availability of better manufacturing facilities in the country.

Moreover, the Chinese government is encouraging the adoption of electric equipment in the country. For instance, in June 2020, the National Institute of Agro-machinery and Innovation and Creation (CHIAIC) in Luoyang, China, announced the launch of its first hydrogen fuel-cell electric tractor named ET504H tractor.

Key Companies & Market Share Insights

Key players operating in the off-highway electric vehicle market offer a wide range of electrically-propelled off-highway vehicles for agriculture, construction, and mining applications. They are focused on providing advanced and technologically-driven equipment to reduce the carbon footprint and adhere to the emission regulations.

Major strategies adopted by key market players include new product launches and expansion of product portfolios. For instance, in July 2021, Komatsu Ltd. announced the launch of an exclusively remote-controlled and fully electric (non-hydraulic drive) mini excavator. It is a fully electric 3-ton class excavator powered by a lithium-ion battery.

Market players are also focused on consolidating their market shares by undertaking M&A activities. For instance, in June 2021, Caterpillar Inc. announced a strategic collaboration with Nouveau Monde Graphite Inc. With this collaboration, Caterpillar Inc. planned to develop, test, and manufacture Cat zero-emission machines for the Matawinie graphite mine. Some prominent players in the global off-highway electric vehicle market include:

• Caterpillar

• Volvo Construction Equipment AB

• Komatsu Ltd.

• Deere & Company

• Sandvik AB

• Hitachi Construction Machinery Co., Ltd.

• Epiroc AB

• Doosan Corporation

• J C Bamford Excavators Ltd.

• CNH Industrial N.V.

Off-highway Electric Vehicle Market Report Scope

Segments Covered in the Report 

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global off-highway electric vehicle market report based on application, electric vehicle, and region:

• Application Outlook (Revenue, USD Billion, 2018 - 2030)

  • Construction

  • Agriculture

  • Mining

• Electric Vehicle Outlook (Revenue, USD Billion, 2018 - 2030)

  • Battery Electric Vehicle (BEV)

  • Hybrid Electric Vehicle (HEV)

• Regional Outlook (Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

    • France

    • Norway

  • Asia Pacific

    • China

    • Japan

    • India

  • Rest of the World (RoW)