Electric trucks are commercial vehicles that use one or more electric motors or traction motors for propulsion instead of an internal combustion engine. Electric trucks are zero-emission vehicles that help reduce global carbon emissions. They are increasing being adopted for cargo transport over short and long haul routes. Moreover, electric trucks are less costly to operate than traditional diesel trucks as electricity is cheaper than diesel fuel per mile.
The global electric truck market is estimated to be valued at US$ 3.68 billion or Mn in 2023 and is expected to exhibit a CAGR of 6.2% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
The growth of the global electric truck market is majorly driven by increasing demand for sustainable transportation. Stringent emission norms by governments across the globe are further propelling the adoption of electric commercial vehicles. Several countries and states have announced plans to ban diesel trucks which is projected to boost the sales of electric trucks during the forecast period. Moreover, constantly rising fuel prices and lower operating and maintenance costs of electric trucks compared to traditional diesel trucks are expected to fuel the market growth. Government subsidies and tax rebates on purchase of electric vehicles are encouraging fleet owners and logistics companies to replace their existing fleet with electric trucks. However, high upfront costs of electric trucks and lack of adequate charging infrastructure are some of the factors that may hamper the market growth.
SWOT Analysis
Strength: Electric trucks pose lower total cost of ownership compared to diesel trucks over their lifetime. They have fewer moving parts which reduces maintenance costs. They produce zero direct emissions which is beneficial for the environment.
Weakness: Electric trucks have a limited driving range compared to diesel trucks due to smaller battery capacity. This makes them unsuitable for long distance transportation. Charging infrastructure is still limited compared to refueling stations for diesel trucks. Higher upfront costs of electric trucks compared to equivalent diesel trucks remains a barrier for many fleet owners.
Opportunity: Stringent emission regulations globally are pushing governments to incentivize adoption of electric vehicles including trucks. Rising crude oil prices are making electric trucks an attractive alternative. Fleets are looking to electrify their vehicles to achieve sustainability targets and for marketing benefits.
Threats: Slow expansion of charging infrastructure can negatively impact adoption of electric trucks. Technological advancements in battery technology of rival countries can challenge domestic players. Dependence on key battery cell and component suppliers raise supply chain risks. Decline in crude oil prices in future can reduce the cost benefits of electric trucks.
Key Takeaways
Global Electric Truck Market Size is expected to witness high growth. Government initiatives to reduce emissions and growing demand from logistics companies are propelling market expansion. With COVID-19 highlighting environmental issues, the move towards electric commercial vehicles is expected to accelerate.
Regional analysis: North America currently dominates electric truck sales led by the US. Stringent emission regulations and supportive policies have boosted early adoption. China is anticipated to lead the market in coming years supported by significant domestic production and sales. European nations are rapidly investing in electric vehicle charging networks to encourage commercial fleet electrification.
Key players: Key players operating in the electric truck market are Amcor plc, Mondi Group, International Paper Company, Smurfit Kappa, DS Smith, Klabin S.A., Georgia-Pacific LLC, Rengo Co., Ltd., Orora Packaging Australia Pty Ltd, and Nippon Paper Industries Co., Ltd. These companies are focusing on developing batteries with higher density and cheaper manufacturing to make electric trucks more competitive against diesel models. Partnerships across the supply chain will be crucial to scaling up electric truck production globally.
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