Government Incentives and Charging Infrastructure Development by Public and Private Entities to Boost Uptake of Electric Buses and Trucks
The medium-duty and heavy-duty truck and bus markets in the US are expected to show strong recovery following the major dip in 2020 due to the dire impacts of the COVID-19 crisis on production and sales. However, the crisis is forecast to have a relatively lower impact on the electric truck and bus markets. The electric bus segment shows a slight decline, whereas the electric truck market reflects a slight increase. The increase in electric truck sales can be attributed to the nascent market stage and previous orders.
Post-2021, the electric bus and electric truck segments in the US are expected to record significant growth owing to government initiatives aimed at reviving the economy from the crisis. The electric truck and bus markets are expected to grow at a CAGR of 148.5% and 44.9%, respectively, from 2020-2026.
The establishment of low-emission zones, stringent emissions norms, the ultra-low NOx regulations will aid this growth. Technology developments effectively reducing the total cost of ownership (TCO) of electric commercial vehicles are among the key factors driving the exponential growth and adoption of these vehicles. Volatility in crude oil prices and the need for clean transportation solutions, especially in the urban environment, will propel the transit bus and medium-duty truck segments in the US.
The electric commercial vehicle market also faces serious competition from alternative fuel-powered vehicles, which are gaining prominence. Natural Gas (CNG and LNG) commercial vehicles are projected to witness higher adoption in the short and medium terms; however, this will have a much lower impact on electrification with the growth in charging infrastructure and reduction in the acquisition costs of electric commercial vehicles.
Commercial vehicle OEMs in the US are moving toward electrification in a big way because of the increased presence of other global manufacturers in the market. The US electric commercial market is also home to innovative startups challenging established OEMs, creating a flourishing competitive environment.