Declining Battery Price Driving Electric Truck Market
The electric truck market is expected to reach 1,508.1 thousand units in 2025, witnessing a 18.5% CAGR during the forecast period (2018–2025). The market is growing due to the declining prices of battery, low operating and maintenance cost of electric trucks, government regulations, and government incentives. In terms of vehicle type, the market is divided into light-duty trucks (LTD), medium-duty trucks (MDT), and heavy-duty trucks (HDT). The LDT type held the largest revenue share of the market during the historical period (2013–2017) and is projected to retain its position during the forecast period.
When propulsion is taken into consideration, the electric truck market is categorized into fuel-cell electric vehicles (FCEV), hybrid electric vehicles (HEV), plug-in hybrid electric vehicles (PHEV), and battery electric vehicles (BEV). Out of these, the BEV category dominated the market in 2017 and is predicted to account for the major share of the market during the forecast period as well, in terms of value. The reason for this is the increasing government support in the form of financial incentives on the purchase and development of these vehicles and enhancements in the battery technology.
In terms of application, the electric truck market is divided into municipal, logistics, and others (which include mining, agriculture, and construction purposes). Among these, the logistics division held the largest share of the market during the historical period and is expected to account for the major share of the market during the forecast period as well, both in terms of value and volume. This is attributed to the expanding logistics industry and considerable growth in retail, manufacturing, and e-commerce industries in emerging economies.
A major trend in the electric truck market is the adoption of electric trucks for urban logistics. The existing concepts of logistics in urban areas are being fundamentally transformed in several nations around the world. Distribution centers are being moved closed to urban areas. In addition, a double-digit growth rate has been witnessed in online retail for parcel service providers in recent years. This is projected to result to the development of new logistics concepts for urban areas, as the demand for faster and more flexible deliveries from the consumers is expected to rise.
The low operating and maintenance cost of electric trucks, as compared to conventional fuel-based trucks, is a primary driving factor of the electric truck market. Unlike traditional diesel trucks, electric trucks do not need oil changes, fuel filters, emission checks, and spark plug replacements, thereby resulting in a considerable saving in the overall component costs. The fuel costs, along with repair and maintenance costs, constitute about 35% of the total operating cost of a diesel truck. These costs can be significantly decreased by replacing diesel trucks with electric trucks.
Another key driving factor of the electric truck market is the declining cost of battery. The battery pack is one of the major components of an electric truck and makes for a considerable share of the overall drivetrain cost. The price of battery packs is primarily affected by battery chemistry used in electrochemical cells, since the battery chemistry determines a range of performance-determining parameters such as battery lifetime, charging time, and energy-to-weight. Due to technological advancements, the prices of battery packs have been reduced considerably, which, in turn, is driving the market.
Hence, the market is witnessing significant growth due to the declining battery prices and low operating and maintenance cost of electric trucks.
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