WoodMac On The Commercial Charging Market For Heavy Vehicles To 2050

WoodMac says that commercial electric vehicle charging equipment market worth over $870 billion by 2050

Global research agency Wood Mackenzie believes commercial vehicle electrification is on the cusp of exponential growth, largely driven by climate policy and decarbonisation goals.

The agency says that government funding and zero-emission vehicle regulations are strong drivers for commercial electric vehicle (EV) adoption in every region thus far, therefore reducing the primary barrier to commercial EV adoption: cost. This policy support will see the annual market value of electric bus and truck charging outlets pass the $200 billion mark by 2045.

Annual global commercial vehicle charging equipment market value, 2020 – 2050

Though the sector’s annual market value is expected to hit $243 billion in 2045, the following five years will see a decline of almost $25 million. Wood Mackenzie’s research points out that annual charger installations will increase throughout the forecast period, rising from 200,000 in 2020 to over one million in 2050, however a shift towards higher powered charging, development of public charging networks for trucks or on-route charging for buses, and more efficient fleet management strategies will result in fewer chargers needing to be installed in 2050.

Kelly McCoy, Wood Mackenzie Research Associate, said: “In the broader context of EVs, it’s important to pay attention to how the commercial charging segment evolves. Stakeholders are collaborating and being more proactive than they were in the passenger EV segment to develop new charging strategies, products and solutions.

“For example, utilities and grid operators concerned with impacts on the local distribution grid are engaging fleets in pilots and offering EV-specific rates, including greatly reducing or freezing demand charges. Additionally, fleet operators are actively pursuing integrating EV charging with other on-site distributed energy resources and their building loads to minimise electricity demand.

“Commercial EV fleets are excellent resources for vehicle-grid integration, as they have fixed routes and schedules and remain parked for most of the day. Not every region prioritises vehicle-grid integration, but it has the potential to increase resiliency and reliability on distribution grids in particularly vulnerable regions, such as India.”

China currently dominates the electric bus and charging infrastructure landscape. In 2020, the country had more electric buses than any other region will have in 2050. By mid-century there will be six times as many electric bus charging outlets installed in China compared to the second largest market, the United States.

“It is common in China for bus fleet operators to pay a third party to install, operate and maintain the e-bus charging infrastructure. Early data show that the infrastructure partner will break even from the initial investment in five to six years. This model is being explored in other regions, and could encourage EV adoption by reducing cost, technical barriers and administrative burdens on fleets as they electrify,” added McCoy.

Commercial truck charging will take place in three locations through 2050: depots owned or operated by the fleet operator, destinations such as warehouses or ports, and public charger networks along transit corridors. The first two solutions are already being developed, however public commercial vehicle charging networks will need to be built in order to support long-distance transit and freight vehicles.

Though light and medium truck installations are underway across the globe, heavy truck electrification is not expected to reach every market until 2028. By the end of the forecast period, this segment will only grow to 3% of commercial outlet installs. Though lagging behind its global counterparts, India will have installed 41% of the world’s heavy truck charging outlets in 2050 due to India’s use of different truck weight classifications compared to other regions.