You may see an increasing number of electric vehicles on the roadways, but did you know that more and more equipment and heavy machinery used in mining, construction, and agriculture is also going electric? Hybrid and electric underground loaders, excavators, and tractors are already available, and the electrification trend is expected to accelerate over the long term.
In a recent video, The Freedonia Group’s Research Analyst Peter Kusnic sat down with Industry Analyst Gleb Mykto to discuss the future of electric heavy machinery and equipment. Gleb has written reports on the global construction and heavy equipment industry for more than 12 years, and his research has appeared on NPR’s Marketplace and numerous trade journals.
Watch the video to hear their discussion or read a transcript of the Q&A below.
In addition to lowering emissions, what are the benefits of going electric in the heavy machinery industry?
One of the biggest advantages is the much lower fuel cost, which is a major concern for many operators, especially in isolated areas where transporting fuel is considerably harder.
The second issue is for operators themselves—the person in the machine actually has lower levels of harmful gases that they face on an everyday basis, which makes the job a lot safer. They also have a lot less noise, which improves comfort.
Maintenance costs are always a big concern for companies because of what they contribute to the bottom line, and the simplified design of electric and hybrid machines often means that the maintenance costs are lower.
These machines also have reduced idling time, which limits wear and tear of the engine, and that also helps to extend the life of the machine, and this gives it a huge advantage over ICE models.
What role will governments play in the rise of electric and hybrid equipment?
The role of governments is largely two-pronged. The adoption of new green energy legislation such as emissions regulations will push operators to buy new machines that comply with standards. These regulations at the same time make ICE models more expensive because manufacturers of those machines have to incorporate new emissions-control technologies.
A second way governments drive the electrification of the heavy equipment industry is by encouraging the shift by using incentives like subsidies or having targeted programs that encourage sustainable forestry or sustainable agriculture, and this helps to bring these machines into use in a given country.
Does this all mean ICE models days are numbered?
The last few years we have seen an acceleration of the electrification of the heavy equipment industry. There is definitely a rise in how many companies offer these machines. We’ve also seen the performance gap shrink, and the prices of these machines have come down, and this has made a huge difference.
We have seen concerns about environmental issues spread to many industrializing countries, and governments have acted there as well. So we will see huge inroads made by electric and hybrid machines, but at the same time, the use of ICE models will remain fairly strong in some parts of the world. In some instances, these machines fill a niche application, and their price will continue to be a main concern for companies and operators with limited financial resources.
Beyond 2030, we will see a faster shift to electrification, but in the near term, there will still remain significant demand for ICE machines, particularly in industrializing countries.
Where to Learn More
To learn how sustainability is impacting other key industries, check out our recent blog post "5 Industries Benefiting from Going Green."
To stay on top of new industry research in the fields of your choice, subscribe to monthly Industry Update Emails from MarketResearch.com. Use this link or the button below to sign up for free.
About the Author: Sarah Schmidt is a Managing Editor at MarketResearch.com, a leading provider of global market intelligence products and services.