Electric Construction Equipment Market

[404 Pages Report] The global electric construction equipment market is projected to grow from USD 10.2 billion in 2023 to USD 44.8 billion by 2030, at a CAGR of 23.6% during the forecast period. The electric construction equipment market has shown significant growth recently. The major driving forces are the growing demand to minimize the exhaust emissions of construction equipment, cut the ventilation costs in underground mining, and give preference to the low-noise construction machines while working in residential areas—additionally, the trend related to mining automation and emission-free mining in China, Australia, and Japan. Full product portfolios by major OEMs like SANY, BYD, and XCMG will help China maintain its lead in Asia. Hydrogen fuel cell technology has been gaining attention these days, and companies like JCB and Hyundai are leading in innovation.

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Market Dynamics

DRIVER: High ventilation costs in underground mining

Underground mining generates harmful dust, gases, and a tremendous amount of heat; diesel-powered equipment is a significant source of emissions, including nitrogen dioxide and other toxic gases. The International Council on Mining and Metals estimates that 40% of the energy expenses of an underground mine are for operating ventilation systems that remove pollutants and heat from the mining tunnels. This dramatically raises the mine's operation expenditure and lowers its productivity. Various regulations throughout the world regulate mine ventilation systems. In the United States, MHSA has specified the minimum quantity of air to guarantee safe mining. These regulations ensure an increased amount of airflow to cater to the obligatory standards, with air moving at a speed of at least 60 feet per minute on each working face of the mine. Therefore, sustainability goals have begun opening their ways to electric mining equipment on behalf of manufacturers and mine owners. Some major mining companies operating in the UK include Anglo American, Rio Tinto, and BHP of Australia, which have pledged to achieve net-zero emission by 2050 and hence choose electric mining fleets to achieve their goals regarding sustainability. For instance, in June 2023, Australian operator IGO contracted ABB and Perenti to study full electrification for one of the projects.

Additionally, Canadian miner Torex Gold Resources has chosen Sandvik to supply a 35-unit hybrid fleet for the Media Luna project in Mexico, including 15 battery-electric vehicles for production and 20 conventional machines for development. The mining industry increasingly adopts electric equipment to reduce harmful emissions and high ventilation costs associated with diesel-powered machinery. Companies invest in electric and hybrid fleets to meet sustainability goals and regulatory requirements, aiming for net-zero emissions and improved operational efficiency.

RESTRAINT: Higher initial cost than conventional ICE Equipment

Although electric construction equipment offers several advantages, it requires a significant initial financial investment, and buyers hesitate to invest. For instance, the Caterpillar 336E H Dozer uses 20% less fuel than the standard Caterpillar D7R and 33% less fuel than the 330/336D. Komatsu's hybrid excavator shortens the return-on-investment period to 1 to 2 years by using 40% less fuel than comparable conventional excavators. All the battery electric machines come with higher capital investments. For instance, the average cost of an electric mini excavator is almost two times more expensive than its closest ICE excavator model. Electric construction equipment offers combined benefits like lower emissions and reduced maintenance costs over its running condition. However, significant investments with charging infrastructure challenges and limited working hours compared to ICE models remain a major restraint to adopting electric construction equipment.

OPPORTUNITY: Emergence of hydrogen-powered construction equipment

Hydrogen fuel cells for construction machinery are gaining traction, demonstrating efficiency and fast refueling, enabling longer distances than those attainable by driving battery electric vehicles. These will find applications where weight and speed of refueling are crucial, such as long-haul trucking and heavy machinery. Volvo Group views hydrogen fuel cells as pivotal in achieving fossil-free transportation systems, envisioning a balance of power, flexibility, and zero emissions. In off-road vehicles, marine machines, and industrial equipment, hydrogen fuel cells are promising to depend on local hydrogen production infrastructure. Hyundai and Ineos have collaborated in developing hydrogen supply and using fuel cell technology in machinery, acknowledging that battery electric power has limitations in harsh environments. Due to its high energy density, this gas is considered the best technology for commercial vehicles and trains because it emits less than traditional engines with much promise. JCB also produces hydrogen-powered engines targeting mass production; they are piloting them in the UK on some backhoe loaders, among others. However, given that there is more energy in one kilogram of hydrogen than in one kilogram of battery packs, it is one of those frontier technologies ranging from lorries to trains as it has remarkable potential and much cleaner emissions than conventional engines.

List of Upcoming Hydrogen models in market:

• JCB (220X Excavator)
• Hyundai Construction Equipment (HX900 Hydrogen Fuel Cell Excavator)
• Komatsu Ltd. (Medium-sized hydraulic excavator)
• Volvo Construction Equipment (Volvo HX04)
• JCB (Backhoe Loader)
• Liebherr (R 9XX H2 hydrogen excavator)

Companies are partnering to create hydrogen infrastructure, further illustrating growth in hydrogen fuel cells for commercial vehicles, from off-highway equipment to trains. These fuel cells show much higher energy density than lithium-ion batteries. The growth of hydrogen fuel cell technology primarily underpins the development of hydrogen-powered construction machinery. It forms an exciting opportunity to increase efficiency and cut emissions while overcoming challenges with extended battery-electric charging times for construction equipment.

CHALLENGE: Complex thermal management of batteries and charging infrastructure for electric machinery

Electric construction equipment adoption face challenges due to a requirement for charging infrastructure, particularly at remote or urban job sites or mining areas. The lack of standardized charging connectors adds to the challenge, causing delays and extra costs for contractors. These issues could slow down the adoption of electric machinery. Efforts are being made to improve the current situation. Efforts are being made to improve the current situation. Building the public charging infrastructure is a major investment area for the government and private enterprises, including Level 2 and DC fast chargers and mobile charging solutions being developed for job sites. Another crucial factor is the battery system's temperature management. Batteries must stay within a specific temperature range (20 to 40 degrees Celsius) to work efficiently. They generate heat while using, so good ventilation and cooling systems are essential. Technologies like liquid jackets and cooling fans maintain the right temperature and ensure safe, effective operation. Overall, the performance and safety of electric construction equipment depend heavily on effective battery thermal management.

The Electric Construction Equipment market ecosystem

The ecosystem analysis highlights electric construction equipment market players, primarily represented by component manufacturers, manufacturers, and dealers.

The mining segment is projected to dominate the electric construction equipment market in 2030

The mining industry in Asia Pacific, the Americas, and Europe faces significant operational challenges due to rising ventilation costs and increasingly stringent emission norms. The level of emission from diesel-powered mining machinery is higher in underground mining. It generates a lot of heat and results in high energy consumption. About 40% of the mine's energy goes into ventilation systems. These challenges, in turn, encourage the industry to use emission-free electric mining equipment rapidly.

The International Council on Mining and Metals has stated an ambitious plan to make mining equipment cleaner and safer in the coming years. It aims to achieve 'greenhouse gas-free' surface mining equipment by 2040. One of the significant expenses in underground mining is powering ventilation systems to remove pollutants emitted by diesel-powered equipment. Consequently, many mining equipment manufacturers are actively working towards making their underground fleets fully electric. For instance, Epiroc AB announced it would electrify all its underground and surface equipment by 2025. 

OEMs like Caterpillar, Komatsu, and Sandvik invest in electric mining equipment and partner with mining companies in technology development and deployment that contribute to cutting emissions and improving efficiency. Further, key OEMs like Caterpillar and Komatsu are investing heavily in electric mining equipment that can achieve more than 80% efficiency versus 45-50% for diesel-driven equipment. The global drive toward low-carbon technologies will lead to higher demand for essential minerals, supporting the growth in electric mining equipment. The industry is forecast to have 1 million electric mining vehicles by 2030.

<50 kWh equipment is estimated to dominate the market during the forecast period.

Electric construction equipment with <50 kWh battery capacity dominates the market, primarily due to the increasing demand for compact, fuel-efficient machines that meet stringent emission regulations. Therefore, these small battery capacities are appropriate for light-duty tasks that include mini-excavators and compact loaders, and they are highly utilized in closely packed construction sites and narrow mining applications. There is an increasing push towards electric equipment in the developing world that can work efficiently while reducing carbon footprints, as emission standards will get more and more stringent across the globe. This is because all mini-excavators, compact loaders, electric backhoe loaders, etc., consume very low energy, so their recharging is faster, often overnight, and minimizes operational downtime. This becomes particularly beneficial for countries like China, Japan, South Korea, and India because of their rising demand for compact-size construction equipment. Growing trends of electrification and rising awareness about emission norms in these countries are likely to drive substantial regional growth in the Asia Pacific, as it is expected to become the fastest region for growth in the <50 kWh equipment category during the forecast period.

The market for hybrid electric construction equipment is estimated to grow at the fastest rate by 2030

The hybrid electric powertrain technology is gaining traction in the market. The technology combines traditional diesel engines and electric power sources to reduce fuel consumption and emissions. Hybrid electric powertrains are primarily found in excavators and loaders and are now expanding further into other construction equipment. Initially, mid-sized and large excavators are expected to adopt hybrid electric powertrains. This equipment can reduce ownership costs and rely on electric power, reducing emissions

Further cost-saving benefits and operational flexibility make them attractive options for end users. For instance, Komatsu’s hybrid excavator offers a 40% better fuel economy than similar conventional excavators. Companies are working towards this trend. For instance 2023, Deere and Company introduced an E-Drive hybrid powertrain for hybrid equipment. Offering hybrid equipment options in construction lines is a beneficial opportunity for companies as this is the next step towards electrification. Companies like Volvo, Hitachi, Sany, Komatsu, etc., develop equipment using hybrid powertrain technology. Komatsu, for instance, has its in-house development and production of hybrid motors, and many other companies have already introduced hybrid construction equipment. Thus, hybrid electric construction equipment represents a step towards more sustainable and efficient machinery in the construction industry.

Asia Pacific is projected to be the largest market for electric construction equipment.

Leading countries such as China, Japan, India, South Korea, and the rest of Asia Pacific are considered to be in the Asia Pacific region. The demand for electric off-highway equipment in the Americas is rapidly increasing because of the environmental protection measures adopted in these key countries. In addition, the entry of multinational electric construction equipment manufacturing companies and rising awareness about electrification are expected to drive the electric construction equipment market in the region. Increasing demand for electric construction equipment in countries such as Japan and South Korea is one of the primary drivers of the growth of this market. Some of the leading companies that are present in this region are Komatsu Ltd. (Japan), Doosan Group (South Korea), Sany Heavy Industries Co., Ltd. (China), Hitachi Construction Machinery Co., Ltd. (Japan), Xuzhou Construction Machinery Group Co., Ltd. (XCMG) Group (China), etc. 

Governments of China, Japan, and India are heavily investing in infrastructural development. Hence, this infrastructural development in these countries is one of the major driving factors for electric construction equipment in the Asia Pacific region. The Chinese government invested USD 38.92 billion in innovative city projects in 2023. Half of its budget was used for infrastructure and intelligent transportation projects. All these factors will drive the growth of the electric construction equipment market. China also has significant participation in battery manufacturing because of companies such as BYD and CATL, thus furthering the electric construction equipment market in the region.

Japan is emerging as the second-largest market in the Asia Pacific region, fueled by the recent consolidation of smaller farms into larger enterprises, which has spurred an increase in large-scale farming. In addition, big construction equipment manufacturers in Japan and South Korea are driving the market. In October, Komatsu recently introduced a 3-ton class electric mini excavator with a lithium-ion battery in Japan. 

Chinese manufacturers are actively advancing greener, more innovative technologies, with a strong focus on electric vehicle options and intelligent technology applications at major industry events. These developments are positioning the Asia Pacific region as a global electric construction equipment market leader.

Key Market Players

These companies adopted new product launches, partnerships, and joint ventures to gain traction in the electric construction equipment market.

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Scope of the Report

Recent Developments

• In 2023, Komatsu has marked significant progress in the electric construction equipment market. Notable launches include the PC05E-1 Electric Micro Excavator, their 3-ton mini excavator offering zero emissions in Europe. The PC200LCE-11 and PC210LCE-11 Electric Excavators, as the company's first large electric models, promise comparable performance to diesel equivalents with zero emissions. Also introduced was the HB365LC-3 Hybrid Excavator at CONEXPO 2023, boasting improved fuel efficiency and lower emissions by integrating a diesel engine with an electric motor and battery.
• In October 2023, Nevada Gold Mines (NGM) partnered with Komatsu Ltd. to acquire 62 Komatsu 930E-5 haul trucks between 2023 and 2025 for its operations at the Carlin Complex and Cortez site in Nevada. 
• In September 2023, Albemarle Corporation and Caterpillar Inc. partnered to advance sustainable mining technologies and operations. This collaboration includes deploying Caterpillar battery electric trucks and energy transfer solutions. The companies aim to establish a zero-emissions lithium mine in North America and drive innovation for a more sustainable mining future.
• In June 2022, Cummins, a global power leader, and Komatsu signed a memorandum of understanding to collaborate on developing zero-emissions haulage equipment. In 2021, Komatsu announced its power-agnostic truck concept for haulage equipment that can run on various power sources. These power sources included diesel-electric, trolley, battery power, and hydrogen fuel cells.
• In March 2022, Honda and Komatsu showcased their joint development work, the PC01E-1. The PC01E-1 is Komatsu's first electric micro excavator powered by portable and swappable mobile batteries. Komatsu and Honda developed the PC01E-1 by electrifying the conventional PC01 micro excavator by incorporating the Honda swappable mobile battery and Honda eGX electrified power unit.
• In January 2022, Hitachi Construction Machinery Co., Ltd. introduced ConSite Mine, a global service solution that leverages IoT and AI to address issues at mining sites. This system continuously monitors compatible large hydraulic excavators and rigid dump trucks, generating monthly operational condition reports and instant alarm notifications when abnormalities are detected. 
• In December 2021, Volvo Construction Equipment (Volvo CE) and its partners explored every aspect of the electric ecosystem to deliver a complete site solution for real urban applications. Volvo CE is working with Gothenburg City, NCC, Gothenburg Energy, Lindholmen Science Park, Chalmers University of Technology, and ABB Electrification Sweden, among many others, to conduct a machine demonstration in large at Gothenburg. The Swedish Energy Agency funded this project.
• In October 2021, Caterpillar Venture Capital Inc. (Caterpillar) and another venture invested USD 16 Million as Series B funding for BrightVolt, Inc. BrightVolt Inc. is a global leader in the design, development, and manufacturing of safe, high-energy, low-cost solid-state lithium-ion batteries. This funding aims to develop more oversized form-factor products for industrial electrification and e-mobility markets.

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