Electric Off-Highway Equipment Market Size

Electric Off-Highway Equipment Market Size

Electric Off-Highway Equipment Market size surpassed USD 1.5 billion in 2021 and is anticipated to grow at over 15% CAGR between 2022 and 2028. The rising consumer awareness regarding air pollution and high demand for low noise equipment will drive the industry growth.

Electric off-highway equipment is eco-friendly and requires low maintenance compared to its fuel-based counterparts, accelerating the market demand. Shifting construction companies focus toward sustainable operations will create a favorable environment for the electric off-highway equipment.

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The electric off-highway equipment industry is benefiting from the increasing government initiatives for emission reduction. Various government organizations are focusing on reducing their carbon footprints to contribute to the establishment of a sustainable environment. For instance, the Europe commission has set a 2050 long-term strategy for greenhouse gas emission reduction. Through this strategy, by 2030 Europe will reduce 45% of its net emissions to achieve carbon neutrality.

The major factor boosting the adoption of electric off-highway equipment is the low maintenance cost of these machines. The rising fuel prices are compelling customers to switch to electric off-highway equipment. Industry participants are establishing strategic partnership to introduce new electric off-highway equipment.

The high market price of electric off-highway equipment is one of the key factors restraining its growth. These machines use expensive rechargeable lithium-ion batteries to deliver energy. The costliest component in each battery cell is the cathode, one of the two electrodes that stores and releases charge. The integration of innovative technologies and the high cost of batteries significantly add to the overall cost of the equipment. Market players are investing in R&D activities & innovations in battery technology to reduce the overall battery integration & maintenance costs.

The outbreak of COVID-19 pandemic disrupted the electric off-highway equipment market demand in 2020 and 2021. A slowdown in the industry is attributed to the government-imposed lockdown in several countries that resulted in disruptions in the supply chain of raw materials and shortage of labor. However, from mid-2021, the industry is witnessing high demand owing to significant government investments in infrastructure projects to revive the pandemic-affected economy. Moreover, electric off-highway equipment manufacturers are focusing on expanding their dealer network to achieve higher profitability from this potential market.