Market Overview

The global sales of commercial vehicles in 2023 were 18,250 thousand, up by 11.7% from the preceding year.
Trends in China, Europe, and the U.S affects the sales trend of global commercial vehicle, as they account for about 70% of the global sales. The demand for replacing commercial vehicles is rising in China in particular, against the backdrop of the enforcement of so-called “National 6” standard in 2023, which limits vehicle emissions. Strong demand for cargo transport underpins the sales of light-duty commercial vehicles and trucks expects, while the development of a high-speed railway network may hinder the sales of passenger buses from 2024. As a whole, the global commercial vehicle market will be driven by emerging countries, where strong economic growth is anticipated in the medium to long term.

Out of the total commercial vehicle sales in 2023, the number of electric vehicles was 1,057 thousand units, indicating a share of 5.8%. While the China and Europe have been leading the global electric commercial vehicle market, the ending of subsidies promoting EVs decelerated the growth. Nonetheless, electric vehicles can serve as a great option for transportation companies aiming to reduce carbon emissions. If the challenges associated with the wide adoption of EVs can be addressed, sales will rise in the medium to long term, especially for Zero Emission Vehicles. (ZEVs: BEV & FCEV).

The challenges associated with the penetration of EVs as commercial vehicles include high sales price, low payload capacities, and short cruising range. Countermeasures are observed in many countries. For instance, Europe and the U.S have eased (or considering the ease of) payload limitations specifically for ZEVs, and discussions are underway in Japan as well; in 2023, about 5,500 battery-switchable heavy-duty trucks was introduced in China, while demonstration tests is ongoing in Japan, with the initiatives of automakers and energy providers. Moreover, various charging methods including dynamic wireless charging are under development to assure stable charging infrastructure for freight and passenger transportation.

Noteworthy Topics

Decarbonization Strategies of Freight & Passenger Transportation Companies

Enterprises are required to reduce or eliminate carbon emissions from their entire supply chain, including distribution. While disclosure of Scope 3 (greenhouse gas emissions of entire supply chain) is becoming a major trend in Europe, Japan, and in California in the U.S., some companies have set a goal of using only BEVs for their product delivery. A trend of shippers requesting transportation companies to carry their cargo on ZEVs is expected to become stronger. From transportation companies’ perspective, now is the time to offer an additional value, which may contribute to their shippers' decarbonization strategy. Going forward, the offering of “green logistics” using ZEV will be a crucial strategy for transportation companies to open up new business opportunities.

Meanwhile, passenger transportation companies are focusing on MaaS (Mobility as a Service, a concept of integrating various means of transportation, such as buses and trains, into a single transportation service) to increase their users. In China, participants in the ‘green MaaS (campaign)’ can receive carbon credits for their ‘green’ travel behavior, such as walking, cycling, and taking buses (instead of driving private cars). In Japan, there are moves to establish so-called regional economic blocs, by adopting cashless payment systems for public transportation. Combined with the energy data obtained through the introduction of ZEVs, integrated consumer data may be utilized for the development of new products and services, which may eventually increase passengers of transportation services. Such initiatives will increase strategic significance in the future for passenger transportation businesses.

As observed, carbon neutrality, corporate social responsibility, and data utilization are the major drivers for penetration of electric commercial vehicles. Under the circumstances, the sales volume of electric commercial vehicles is projected to rise, BEVs in particular.

Future Outlook

As decarbonization progresses globally, freight and passenger transportation companies will increase presence in the market as enablers of decarbonization, not only in terms of Scope 1 (direct GHG emissions by their own companies) and Scope 2 (indirect emissions from the use of electricity, heat, and steam supplied by other companies), but also in Scope 3 (GHG emissions by supply chain). With wider electric commercial vehicle options, ranging from light-duty commercial vehicles to heavy-duty trucks and buses, China and Europe will drive the global market with BEVs. Given the situation, the sales volume of electric commercial vehicles is forecasted to reach 9.56 million units by 2035, with the share at 43.3%.

Looking at trends by country, China sees growth in sales of electric commercial vehicles, especially NEVs (New Energy Vehicles: PHEVs, BEVs, and FCEVs). However, as the government cut the subsidies, the growth decelerated. Fuel consumption regulations encouraged the replacement of light-duty trucks with NEVs domestically, while tapping overseas market by exporting buses and knockdown kits (for using foreign factories as assembly plants for their EVs).

In Europe, although a shift to EVs has been progressing for light-duty commercial vehicles, the reduction of incentivizing subsidies slowed down the growth rate. On the other hand, major commercial vehicle OEMs (automobile manufacturers) in Europe have increased heavy-duty BEV trucks, while Alternative Fuels Infrastructure (AFI) Regulation propelled the installation of quick chargers and hydrogen stations. As governments are working together with OEMs to electrify heavy-duty trucks and create new system for achieving carbon neutrality in the transportation sector, we believe the sales volume of electric vehicles will increase.

On the other hand, since the cruising range and lower payload capacities remain challenging for BEVs, FC (fuel cell) trucks for high-utilization and long-distance transportation are expected to increase through the latter half of the 2020s. FCEVs and alternative fuel engines are likely to be used for long-distance transportation, while BEVs will be utilized for short-distance and last-mile logistics. The use of electric vehicles for transportation will not be solely driven by BEVs; it will also grow based on the specific needs of different applications.

Research Outline