Off-highway Electric Vehicle Market Size - By Vehicle, By Propulsion, By Battery Capacity, By Power Output, By Application, Growth Forecast, 2025 - 2034

Off-Highway Electric Vehicle Market Size

The global off-highway electric vehicle market size was valued at USD 2.8 billion in 2024 and is projected to grow at a CAGR of 10.1% between 2025 and 2034. Stringent environmental regulations and emissions reduction targets are significant growth drivers for the market. Governments worldwide are enforcing tighter emissions standards, particularly in industries like construction, mining, and agriculture, which traditionally rely on heavy diesel-powered machinery. These regulations push companies to adopt electric vehicles as a cleaner alternative, helping them comply with local and international environmental standards.
 

For instance, according to the International Energy Agency (IEA), a wide range of policies are being implemented globally and in India to accelerate electric vehicle (EV) adoption. These policies target both demand and supply sides, infrastructure development, and ecosystem support. Many states offer exemptions or reductions in road tax, registration fees, and even toll waivers for EVs (e.g., Maharashtra’s new policy grants toll and tax benefits for EVs on major highways).
 

Urbanization and infrastructure expansion are key growth drivers for the off-highway electric vehicle (OHEV) market due to the increasing demand for sustainable and efficient construction equipment in growing cities. As urban areas expand, there is a greater need for infrastructure projects like roads, bridges, and commercial buildings, which directly drives the demand for construction machinery. With stricter environmental regulations and a push for greener urban development, electric off-highway vehicles offer a cleaner, quieter alternative to traditional diesel-powered machinery.
 

For instance, according to Statista, in 2025, the degree of urbanization worldwide was at 58 percent. North America, as well as Latin America and the Caribbean, were the regions with the highest level of urbanization, with over four-fifths of the population residing in urban areas. Tokyo-Yokohama in Japan was the largest urban area in the world that year, with 37.7 million inhabitants. New York ranked 13th, with 21.4 million inhabitants. Eight of the 10 most populous cities are located in Asia.
 

Off-Highway Electric Vehicle Market Trends

• The market is witnessing a shift toward fully electric off-highway vehicles, particularly in construction and mining sectors, driven by advancements in battery technology, longer operational ranges, and lower total cost of ownership. BEVs are becoming more popular as they offer significant savings in fuel and maintenance compared to traditional diesel-powered vehicles.
   
• Electric off-highway vehicles are increasingly being equipped with telematics systems, enabling real-time monitoring of vehicle performance, battery health, and energy consumption. This trend is improving fleet management, enhancing operational efficiency, and supporting predictive maintenance.
• The increasing integration of autonomous technologies in off-highway electric vehicles enhances operational efficiency, reduces the need for human intervention in hazardous environments, and contributes to overall productivity gains in the off-highway sector.
   
• The development of dedicated charging networks for off-highway electric vehicles is facilitating their adoption. For instance, initiatives like Polaris Industries' establishment of an off-road trail charging network in Michigan support the infrastructure needed for electric off-road vehicles.
   
• Stringent emissions regulations and government incentives are propelling the adoption of electric vehicles. Many countries are introducing policies that mandate the use of low-emission machinery in urban development and infrastructure projects, creating a favorable environment for electric off-highway vehicle manufacturers.
   

Trump Administration Tariffs

• The Trump administration's tariffs on Chinese imports led to higher costs for key electric vehicle components such as batteries and electric drivetrains. Manufacturers in the U.S. faced increased production costs, potentially delaying the adoption of electric off-highway vehicles due to higher pricing for consumers and reduced profitability for OEMs.
   
• Tariffs disrupted the global supply chain for electric vehicle parts, particularly affecting manufacturers sourcing critical materials from overseas. This led to delays in production timelines and increased lead times for new electric off-highway vehicles, affecting the pace of market growth, particularly in the North American region.
   
• To mitigate tariff impacts, many companies began shifting manufacturing to countries outside of China, such as Mexico or the U.S. This allowed them to avoid tariffs but also required significant investment in new facilities and production capabilities. Although this helped reduce costs, it slowed the market's rapid expansion.
   

Off-Highway Electric Vehicle Market Analysis

Based on vehicles, the off-highway electric vehicle market is divided into electric construction vehicles, electric agricultural vehicles, electric mining vehicles, and others. In 2024, the electric construction vehicles segment dominated the market, accounting for around 44% share and is expected to grow at a CAGR of over 10.5% during the forecast period.
 

• Electric construction vehicles hold the highest market share in the off-highway electric vehicle market due to the sector’s rapid urbanization, infrastructure development, and growing pressure to reduce emissions on job sites. Construction activities often occur in densely populated urban areas where noise and air pollution are major concerns, making electric vehicles highly suitable.
   
• Additionally, governments are enforcing stricter emissions regulations for construction zones, especially in developed and environmentally sensitive regions. Electric construction equipment also offers lower operating costs, reduced maintenance, and improved energy efficiency compared to diesel-powered alternatives, attracting contractors and fleet operators.
   
• With advancements in battery technology, electric excavators, loaders, and dump trucks are becoming more commercially viable. Major OEMs are actively piloting and scaling electric fleets, reinforcing the dominance of this segment in the off-highway electric vehicle landscape.
   
• For instance, in December 2024, Greaves Retail, a division of Greaves Cotton Limited, launched a new range of high-performance electric light construction equipment at Bauma CONEXPO India 2024, held in Greater Noida. The launch marks Greaves Retail’s strategic entry into the construction equipment sector with a focus on sustainability and innovation.
   

Based on propulsion, the off-highway electric vehicle market is segmented into Battery electric vehicles (BEV), Plug-in hybrid electric vehicles (PHEV), Hybrid electric vehicles (HEV), and Fuel cell electric vehicles (FCEV). In 2024, the Battery electric vehicles (BEV) segment dominates the market with 63% of market share, and the segment is expected to grow at a CAGR of over 10.2% from 2025 to 2034.
 

• Advancements in lithium-ion battery technology have significantly improved energy density, charging speed, and lifespan, making BEVs more practical and cost-effective for off-highway applications like construction and mining.
   
• BEVs offer zero emissions during operation, which aligns with global regulatory pressures and sustainability goals, especially in urbanized areas where reducing air pollution is critical. Moreover, BEVs have lower operational and maintenance costs compared to internal combustion engine vehicles, as they have fewer moving parts and require less upkeep.
   
• The growing demand for quieter, more efficient, and eco-friendly machines in industries like agriculture, construction, and mining is further propelling BEVs to dominate the market. Additionally, supportive government policies and incentives are accelerating BEV adoption across various regions.
   
• For instance, in March 2024, Daimler Truck North America (DTNA) launched a comprehensive Battery-Electric Vehicle (BEV) Dealer Certification Program aimed at preparing its Freightliner dealer network to support the growing adoption of electric trucks. The program is designed to ensure dealerships can deliver a safe, high-quality customer experience for battery-electric vehicle buyers and operators.
   

Based on the application, the off-highway electric vehicle market is segmented into construction, agriculture, mining, and others, with the construction category expected to dominate due to the sector’s intensive equipment usage, increasing environmental regulations, and rising demand for cost-effective operations.
 

• Construction sites often involve prolonged machinery use in confined urban or semi-urban areas, where noise and emissions from diesel engines create challenges. Electric construction equipment, such as excavators, loaders, and bulldozers, helps reduce operational emissions, noise pollution, and fuel costs.
   
• Moreover, major construction firms and urban developers are adopting sustainability targets that favor electric alternatives. Government incentives and stringent emission standards, particularly in developed regions, further boost adoption.
   
• Additionally, advancements in battery capacity and charging infrastructure have enhanced the feasibility of electric equipment in high-load applications, making them a preferred choice in the evolving construction landscape.
   

In 2024, the China region in Asia Pacific dominated the off-highway electric vehicle market with around 46% market share in Asia Pacific and generated around USD 557.2 million in revenue.
 

• China holds a dominant position in the off-highway electric vehicle market due to strong government support, robust infrastructure, and a growing demand for sustainable construction and mining equipment. Policies promoting carbon neutrality and subsidies for electric vehicles have accelerated adoption.
   
• Chinese OEMs are investing heavily in R&D, focusing on battery efficiency and intelligent systems. The region benefits from a well-established battery manufacturing ecosystem and increasing urbanization, driving demand for low-emission equipment.
   
• For instance, in December 2024, ZF officially opened its third e-mobility plant in China, located in Shenyang, which focuses on the production and sale of electric axle drives for new energy vehicles. This facility is part of ZF’s strategic expansion in the e-mobility sector and represents an investment of over RMB 1 billion (€130 million), employing around 900 workers.
   

The off-highway electric vehicle market in Germany is expected to experience significant and promising growth from 2025 to 2034.
 

• Germany represents a significant market for off-highway electric vehicles, driven by its strong industrial base, stringent environmental regulations, and ambitious climate goals. The government actively supports electrification through subsidies and green infrastructure investments, particularly in the construction and agricultural sectors.
   
• The demand is further fueled by public procurement initiatives and increasing awareness of total cost of ownership benefits. Germany also serves as a strategic export hub, influencing off-highway EV adoption across broader European markets.
   
• For instance, in February 2025, Austria’s Kreisel Electric announced a strategic partnership with Germany’s CustomCells to co-develop advanced battery cell designs tailored for the off-highway sector, including construction and agricultural vehicles, as well as marine applications. The collaboration will focus on creating two distinct battery cell variants: one with extremely high energy density and another optimized for overall cost efficiency.
   

The off-highway electric vehicle market in the U.S. is expected to experience significant and promising growth from 2025 to 2034.
 

• The U.S. off-highway electric vehicle market is experiencing steady growth, driven by strong regulatory support for emissions reduction and infrastructure modernization. Federal and state-level incentives, including tax credits and green procurement mandates, are encouraging the adoption of electric construction and agricultural equipment.
   
• Technological advancements, combined with rising fuel costs and sustainability goals, are pushing operators to transition from diesel to electric fleets. Additionally, increased investment in charging infrastructure and pilot projects is fostering market readiness and long-term growth potential across the country.
   
• For instance, in April 2025, Amsted Automotive expanded its U.S.-based manufacturing capacity and introduced new products specifically designed for the off-highway electric vehicle (OHEV) market. This move aligns with the company's strategy to manufacture close to its customers, leveraging its 13 U.S. facilities to improve efficiency, reduce costs, and minimize tariff risks.
   

The off-highway electric vehicle market in the UAE is expected to experience significant and promising growth from 2025 to 2034.
 

• ???The UAE off-highway electric vehicle market is in its early growth stage but shows strong potential driven by the nation’s sustainability goals, particularly under the UAE Net Zero 2050 initiative. Increasing investment in green infrastructure, urban development, and smart cities is accelerating demand for electric construction and utility vehicles.
   
• Government support through environmental regulations and incentives is encouraging the adoption of low-emission machinery. Additionally, partnerships with international OEMs and pilot projects in mining and construction sectors are positioning the UAE as a regional hub for electric off-highway vehicle innovation and deployment.
   
• For instance, in November 2024, the Ministry of Energy and Infrastructure (MoEI) of the UAE, in collaboration with the Federal Youth Authority, recently organized a discussion session titled ‘Youth Leadership in the Shift to Electric Vehicles’. Hosted by Rubu’ Qarn Science and Technology, the event focused on empowering Emirati youth to play a pivotal role in the country’s transition to electric vehicles (EVs).
   

Off-highway Electric Vehicle Market Share

• Top 7 companies of the off-highway electric vehicle industry are Komatsu, Kubota, Caterpillar, Volvo AB, Deere & Company, Hitachi Construction Machinery, and Sany around 27% of the market in 2024.
   
• Komatsu is focusing on electrification through partnerships and in-house R&D, aiming to develop battery-electric and hybrid models across construction and mining equipment. The company prioritizes reducing carbon emissions, expanding its electric portfolio, and enhancing autonomous capabilities. It has introduced electric excavators and plans broader deployment through its Smart Construction platform, integrating energy-efficient solutions and digital technologies for sustainable operations.
   
• Kubota targets compact electric machinery for urban and agricultural applications, aligning with global sustainability goals. The company introduced battery-powered mini excavators and utility vehicles, emphasizing quiet, low-emission operation. Kubota also invests in modular battery platforms and smart farming integration, aiming to enhance operational efficiency and reduce environmental impact. Collaborations and strategic investments support its transition to full electric and hybrid systems.
   
• Caterpillar is advancing electric and hybrid technologies across its heavy equipment line-up, focusing on mining and construction sectors. It leverages its Energy & Transportation division to develop scalable battery-electric solutions and charging infrastructure. Caterpillar’s strategy includes piloting electric prototypes, retrofitting traditional machines, and offering autonomous and telematics integration to support sustainability goals and improve total ownership cost for fleet operators.
   

Off-highway Electric Vehicle Market Companies

Major players operating in the off-highway electric vehicle industry are:

• Caterpillar
• Deere & Company
• Hitachi Construction Machinery
• Komatsu
• Kubota
• Liebherr
• Sany
• Volvo AB
• Wacker Neuson
• XCMG
   

The current market strategy in the off-highway electric vehicle market focuses on product innovation through electric powertrain integration, strategic collaborations with battery and component suppliers, and investments in R&D to improve efficiency and durability. Companies are targeting pilot deployments, expanding electric offerings across applications, and leveraging government incentives to drive adoption. Emphasis is also placed on modular platforms and flexible charging solutions to meet diverse operational requirements.
 

Another key strategy involves developing region-specific models tailored to local regulatory environments and operational needs, particularly in emerging markets. Manufacturers are also prioritizing digital integration, such as telematics and remote diagnostics, to enhance vehicle performance and fleet management. Additionally, they are establishing aftersales support networks and training programs to ease the transition from diesel to electric platforms, ensuring customer confidence and long-term adoption.
 

Off-highway Electric Vehicle Industry News

• In April 2025, ZAPI GROUP, Technotrans, Moog Construction, and ZQuip showcased a range of innovations targeting the off-highway electric vehicle (OHEV) market, reflecting the industry's shift toward electrification and advanced fleet management. ZAPI introduced the DCC3, a rugged, compact DC/DC converter developed by Inmotion (a ZAPI GROUP company). The DCC3 converts input voltages from 250 to 900 V into a stable, adjustable 12 or 24 V output, delivering up to 10 kW of power for auxiliary systems in electric or hybrid industrial, commercial, and utility vehicles.
   
• In December 2024, BYD, in partnership with XCMG (China’s largest construction machinery producer), launched three specialized lithium iron phosphate (LFP) Blade battery packs designed for electric construction machinery. These new battery models-Super-hybrid, Super-fast charging, and Super-integration-aim to accelerate the electrification of the construction sector and address its unique operational demands.
   
• In February 2025, Rivian launched its hands-off highway driver assist feature, enhanced highway assist, within a few weeks of early 2025. This system allows drivers to remove their hands from the steering wheel while driving on designated highways, though they must remain attentive to the road. The feature supports automatic lane changes and exit maneuvers, with driver monitoring to ensure focus using seat sensors and an infrared camera embedded in the rearview mirror.
   
• In October 2023, Equipmake, a UK-based electrification specialist, partnered with Perkins, a subsidiary of Caterpillar Inc., to develop advanced e-powertrain systems for off-highway hybrid vehicles. The collaboration, supported by £11.14 million in UK government funding through the Advanced Propulsion Centre (APC)-with £3.24 million allocated to Equipmake-aims to accelerate the decarbonization of the global off-highway market. The hybrid system will feature a bespoke, high torque density electric motor and inverter, with all power electronics designed and developed in-house by Equipmak.
   

The off-highway electric vehicle market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn) and shipment (Units) from 2021 to 2034, for the following segments:

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Market, By Vehicle

• Electric construction vehicles
  • Excavators
  • Bulldozers
  • Loaders
• Electric agricultural vehicles
  • Tractors
  • Harvesters
  • Sprayers
• Electric mining vehicles
  • Haul trucks
  • Drills
• Others

Market, By Propulsion

• Battery electric vehicles (BEV)
• Plug-in hybrid electric vehicles (PHEV)
• Hybrid electric vehicles (HEV)
• Fuel cell electric vehicles (FCEVs)

Market, By Battery Capacity

• Less than 50 kWh
• 50–200 kWh
• More than 200 kWh

Market, By Power Output

• Less than 50 HP
• 50–150 HP
• More than 150 HP

Market, By Application

• Construction
• Agriculture
• Mining
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • ANZ
  • Southeast Asia
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • Saudi Arabia
  • South Africa