- The Electric bus market in China sold 61,000 units in 2020 (-20% YOY)
- Buses and vans will be the main segments in the entire commercial vehicle market
- China and Europe will be the biggest markets globally while by 2026 other regions will see increasing sales
- Lower running costs, decreased maintenance and overall profits over the lifetime will be drivers in the market
- Initial capital, charging infrastructure and charging times will be the hindrances towards electric vehicle in the market
ELECTRIC COMMERCIAL VEHICLE MARKET
In 2020, ~70,000 electric buses were sold globally with Chinese manufacturers holding the chunk of manufacturing (61,000) units. Yutong held the highest market share globally for electric buses sold.
Europe meanwhile saw a substantial increase in electric vans in 2020 with 26.2% increase in 2020 compared to 2019. 28,597 electrically chargeable vans were sold in Europe in 2020. France and Germany were the main markets in this region.
Vans and buses were the main electric commercial vehicles sold, though trucks and other special purpose vehicles will soon gather increasing market share mainly in China, Europe and USA.
CHINA ELECTRIC COMMERCIAL VEHICLE MARKET DYNAMICS
Similar to the passenger vehicle market in China, the commercial vehicle market in China was mainly driven by subsidies. King Long group received more than 10x its profits in subsidies in 2015 while Zhongtong received 3x its annual profit. The annual capacity for NEV bus production is 100,000 in China currently. Domestic sales were affected when subsidies were dropped.
To battle this, Chinese OEMs have started exporting electric buses to the rest of the world. Various OEMs have also set up joint ventures such as BYD-ADL in the UK, Yutong – Pelican etc. to improve manufacturing capabilities, share technological knowledge and increase global market share as electric buses pick up globally.
EUROPE ELECTRIC COMMERCIAL VEHICLE MARKET DYNAMICS
In Europe, more than 75% of the commercial electric vehicle sales will be based on LCVs, mainly vans. This is due to the market size as well as easier purchasing price for LCVs over buses and trucks.
There are multiple subsidies in Europe to transition fleets to electric. Dutch government offers 10% of the van upto 5,000 pounds. 125 million pounds are allocated for this subsidy. In France, there is a 5,000 pound subsidy for a LCV which costs upto 45,000 pound, but it decreases to 3,000 pounds after the price increases above 45,000 pounds.
Europe also has legislation at multiple city centers to be emission free. This will ensure fleets operating in city centres to shift to electric , both PHEV and BEV. The PHEV only electric range will also have to be sufficient enough to handle a day’s journey in city centres at full electric
LATEST ORDERS IN ELECTRIC COMMERCIAL VEHICLE MARKET
- VHH Hamburg ordered 20 electric buses from MAN;10 12e and 10 18e buses
- London ordered 195 electric buses from BYD-ADL for their public fleet transport system
- Zaragoza ordered 68 electric buses from Irizar, 51 12m buses and 17 articulated buses
- Bernmobil in Switzerland ordered 14 electric buses from Irizar, all of them articulated buses
- Lublin in Poland ordered 7 articulated buses from Solaris including the charging infrastructure needed
- Skane region in Sweden ordered 79 electric buses from BYD
- Basel ordered 54 electric buses from Mercedes including pantograph charging
- Cardiff ordered 36 electric buses from Yutong for public fleet usage
- Copenhagen ordered 25 electric buses from MAN, all of them 12 E
- Cologne ordered 51 electric buses from VDL.
ELECTRIC COMMERCIAL VEHICLE MARKET SIZE AND FORECAST
The electric commercial vehicle market is estimated at $xx Billion in 2021 with xx units in 2021. The CAGR will be xx% from 2021-2026
The market will mainly be based on buses and light commercial vehicles over trucks and other special purpose vehicles. Buses for public transport fleet and LCVs for fleet utility will be the drivers
Buses utilised for public transport can recoup the running costs over 4-5 years though the initial investment will be 2-2.5x of that of an ICE bus. For LCVs the intial investment will be 1.5x that of a LCV van and will be easier to recoup the costs.
Decreased running costs and easier maintenance will be the drivers for this market. Life time of a bus is ~10 years, and overall profits generated will be higher compared to an ICE bus and van.
Charging time , infrastructure and range anxiety along with initial investments are the hindrances from increased adoption of this vehicle type. Decreasing battery prices will enable it to be competitive with ICE while developing charging infrastructure, new methodologies for fast charging and increasing chargers are functioning methods to decrease the hindrances.
In 2020, 50% of the electric bus market was held by the top 3 players in the market. From 2021-2026, there will be increasing market share for other players, and the overall share will decrease for the top players. There will also be increased manufacturing on a global scale with increasing battery packs and various regions to adopt electric buses even in regions with low plugged in vehicle sales
The top 4 players in the vans market held more than 70% of the market share in 2020. They will continue to establish their dominance and hold the market share. The main reason being their dominance in the van market even in ICE as well as better technological usage and understanding mainly keeping the needs of fleet users.