The global electrification of vehicle sectors presents a trillion-dollar market opportunity, according to a report by market intelligence firm IDTechEx. While the focus has largely been on the electrification of the automotive sector, there are significant opportunities for electric vehicles (EVs) in other sectors such as land, sea, and air transportation. The report predicts that the global market for electric vehicles in these sectors will be worth over $1 trillion by 2044, excluding the automotive industry.
In the commercial vehicle sector, electrification is gaining momentum with electric buses leading the way in China. However, the report suggests that global sales of electric buses may not surpass their 2016 peak until 2040, with growth driven by replacements in China and greater adoption in Europe. Light commercial vehicle fleets are also increasingly adopting electrification, driven by both environmental considerations and lower total cost of ownership.
Major automakers such as Tesla, Daimler, VW, and Volvo are heavily investing in battery electric trucks, while a smaller minority, including Toyota and Hyundai, are focusing on fuel cell trucks. Despite challenges related to efficiency and cost, fuel cell electric vehicles (FCEVs) are still being considered for long-haul trucking applications, depending on the availability of low-cost green hydrogen.
In the microEV market, which includes two-wheelers, three-wheelers, and microcars, China and other Asian regions dominate the sector. These vehicles typically rely on lead-acid batteries, providing a relatively low-cost form of electrification. Electric microcars, which are popular in crowded urban areas, require lower range requirements compared to full-sized cars.
The market for electric and hybrid marine vehicles has seen significant growth since the emergence of COVID-19, driven by increased interest in leisure boating. Low-power outboard categories are already showing a strong business case in terms of total cost of ownership, despite being more expensive than petrol equivalents. However, high battery prices remain a barrier in higher power outboard or inboard categories. The industry lacks governmental policy drivers, which have remained largely unchanged for a decade.
The construction sector is also embracing electrification, driven by commitments to climate change and health and safety concerns. Countries such as Norway and Holland, as well as companies like Volvo, are setting their own targets for electrification of construction equipment. While the market for electric construction vehicles is expected to reach approximately $154 billion by 2044, the focus is currently on smaller compact machines with short operating hours and low energy consumption.
Lastly, the report looks at the market for electric air taxis (eVTOL) and electric vertical take-off and landing vehicles. The timeline for commercialization of eVTOLs is dependent on the final certification process in each geographical market, and significant technological and funding challenges need to be addressed before production eVTOLs can be launched.
Overall, the report highlights the trillion-dollar market potential of electrification outside the automotive sector. The electrification of vehicle sectors such as commercial vehicles, microEVs, marine vehicles, construction equipment, and air taxis presents lucrative opportunities for manufacturers and investors. With increasing global commitments to reduce emissions and transition to cleaner modes of transportation, the market for electric vehicles is set to grow significantly in the coming decades.
To read the full report by IDTechEx, visit their website at www.IDTechEx.com/EV.
