Electric Construction Equipment Market

Electric Construction Equipment: The Future of Construction

The construction industry has come a long way from using manual tools to modern equipment, and it continues to evolve. With the increasing demand for sustainable practices, the use of electric construction equipment is gaining popularity. This type of equipment runs on electricity rather than fossil fuels, reducing carbon emissions and contributing to a greener environment. In this essay, we will explore the benefits of electric construction equipment, its current state, and its future prospects.

Benefits of Electric Construction Equipment

One of the most significant advantages of electric construction equipment is its eco-friendliness. Compared to traditional diesel-powered equipment, electric machinery has zero emissions, contributing to a cleaner environment. Besides, electric equipment is quieter than diesel engines, reducing noise pollution in construction sites.

Electric construction equipment is also more cost-effective in the long run. While the initial investment may be higher than diesel equipment, electric machinery's maintenance costs are lower. Electric equipment has fewer parts, which means fewer repairs and replacements, and it has a longer lifespan.

Electric construction equipment is also more efficient. Electric machinery can perform the same tasks as diesel equipment with less energy. Electric equipment has high torque at low speeds, which makes it ideal for heavy-duty tasks. It can also charge faster and operate for more extended periods, reducing downtime.

Current State of Electric Construction Equipment

Electric construction equipment is not new, and it has been around for some time. However, the technology has only recently gained traction due to the increasing demand for sustainable practices. Currently, electric construction equipment is being used for tasks such as excavation, demolition, and material handling. Some of the most popular electric equipment include excavators, bulldozers, and cranes. The use of electric construction equipment is not limited to developed countries. Developing countries such as India and China are also adopting electric machinery due to the need for cleaner air and lower carbon emissions.

Market Dynamics of Electric Construction Equipment Market

DRIVERS in Electric Construction Equipment Market

The demand for electric construction equipment is expected to increase due to the rising need for low-noise construction activities in residential areas. The increase in noise pollution in urban areas caused by construction activities has led to regulations and restrictions on noise levels in construction sites. Diesel-powered construction machines are the main culprits behind the noise generated on residential construction sites, leading to severe health issues. To address this concern, countries are implementing regulations to control noise levels generated by construction equipment.

The need for low-noise construction activities has resulted in initiatives and policies aimed at reducing noise levels in residential areas. The Oslo municipal corporation plans to operate all public construction sites using electric machinery during the forecast period, while the London and Paris city corporations are collaborating on ambitious plans to ban or reduce polluting vehicles in residential areas. Such initiatives have prompted construction companies to prefer electric construction vehicles and equipment. These machines have decibel levels that make them suitable for use within city limits without restrictions. Furthermore, electric equipment enables construction companies to work during the daytime, complete their work faster, and save costs.

Leading manufacturers are introducing compact electric equipment designed for city applications. These machines operate within restricted noise decibel levels and produce less noise. Manufacturers claim that some vehicle models produce less noise than traditional diesel-powered construction machines.

RESTRAINTS in Electric Construction Equipment Market

The extended charging time required for electric off-highway equipment is causing a loss of productivity. The batteries used in these vehicles have large capacities, which means they take a long time to charge fully. As a result, the equipment must remain stationary while charging, leading to a reduction in productivity. This is one of the major reasons why the adoption of electric off-highway equipment in mining and construction applications is slow. Another factor is that construction and mining companies are typically required to work long hours, leaving little time for the required charging of electric off-highway equipment. This extended charging time decreases productivity due to the time lost during recharging. However, some manufacturers offer electric equipment models with less charging time, such as JCB's 19C-1E mini electric excavator, which takes eight hours to charge completely using a 230V 16A supply or 12 hours using a 110V 16A supply.

In the case of residential lawnmowers, charging time is less of an issue as they are used for an average of half an hour per week. However, commercial users of lawnmowers require machines that can operate for 8-10 hours per day, six days a week, making it more practical for them to use gasoline-powered mowers instead of continually recharging batteries. Thus, the demand for electric off-highway equipment is currently limited. To address this issue, manufacturers are developing fast-charging technologies and swappable battery packs. However, the batteries used in these machines must be able to withstand quick charging without overheating. The introduction of fast chargers and swappable batteries is expected to overcome the loss of productivity caused by extended charging times.

OPPORTUNITIES in Electric Construction Equipment Market

The electric vehicle industry has seen a significant shift from lead-acid and nickel-metal hydride batteries to lithium-ion batteries due to their multiple benefits over the former. However, lithium-ion batteries are not without limitations that can affect their performance. They are susceptible to issues such as low robustness, limited power density, short lifespan, performance fluctuations with temperature changes, rigidity, and high cost. To overcome these limitations, solid-state batteries are being developed with stabilized solid electrolytes in lithium metal. Solid-state batteries offer up to 10 times more charging capacity than graphite-based lithium-ion batteries and a lifespan of up to 10 years, making them an attractive alternative to lithium-ion batteries. Despite their advantages, the development of solid-state batteries is challenging due to issues related to building materials, design safety, cost, and production techniques.

One of the biggest challenges faced by the construction and mining industries is the loss of productivity due to prolonged charging times. To address this issue, manufacturers are investing in the development of fast charging methods and chargers. DC fast chargers with a capacity of 350 kW can charge a 300-kWh battery in less than an hour. However, the availability of large electricity capacity is still a significant hurdle to the development of such chargers. To overcome this limitation, some manufacturers offer a series of battery packs that can be swapped when the vehicle's battery runs out of charge. The swapped battery can then be charged separately, while the vehicle can continue to operate with the newly installed battery pack. The battery packs must have more range than the time required for charging the vehicle fully. Once the vehicle's original battery is fully charged, the battery packs can be swapped again with the original battery in place. This technology can significantly reduce productivity losses, but the vehicle must be designed to make the swapping process easy, less time-consuming, and fool-proof.

The demand for electric construction equipment, including compact electric excavators, loaders, and dozers, has been significantly affected by stringent emission and noise regulations in urban or closed construction areas. In the mining industry, the use of electric equipment reduces expenses related to the ventilation of underground mines. Electric dump trucks and excavators drive the electric mining equipment market, while electric tractors and sprayers are key electric agriculture equipment categories that improve efficiency and productivity in the agriculture segment.

To facilitate the use of electric off-highway equipment across multiple brands and equipment types, battery packs can be designed for universal compatibilities, such as universal chargers. The adoption of universal chargers and battery packs can greatly facilitate the charging infrastructure at various locations within mining sites, reducing the return to grid time for charging and increasing productivity. Large mining operations with hundreds of vehicles and equipment deployed can benefit significantly from these developments, resulting in increased efficiency and strengthened product portfolios.

These developments offer promising growth opportunities for global players in the market. By investing in such innovations, manufacturers can improve the efficiency of electric off-highway equipment and cater to the growing demand for low-emission and low-noise construction and mining equipment.

The mining industry is anticipated to be the primary driver of growth in the electric construction equipment market during the forecast period. Currently, mining companies and governments are actively promoting the use of electric and hybrid-electric mining equipment due to their safety, environmental, and financial benefits, which has resulted in the mining application segment generating the most value globally. The mining segment is predicted to maintain its dominance, becoming the largest electric construction equipment market.

Europe is expected to have the largest electric construction equipment market during the forecast period, with a projected CAGR of 26%. This is due to the high demand for construction and mining equipment in developed countries with a strong trend towards electrification. The European region has stringent emission norms and many sustainability initiatives by the government, which are driving the adoption of zero-emission equipment. Cities such as Oslo, Helsinki, London, Copenhagen, Amsterdam, and Stockholm are witnessing a surge in infrastructure projects, resulting in the increasing adoption of electric excavators. The region is estimated to have a market value of USD 10 billion during the forecast period.

Germany is projected to lead the highway electric vehicles market in Europe. The demand for emission-free, noiseless, and eco-friendly construction and mining equipment that are cost-effective to operate is driving growth in the country. Additionally, many leading electric off-highway equipment manufacturers are located in Germany, and the government is actively promoting sustainable mobility, contributing to the country's dominance in the European market.

The Asia Pacific region is expected to witness rapid growth in the electric construction equipment market during the forecast period due to rapid infrastructure development and strict government norms related to environmental protection. The Chinese government has recently signed a free trade agreement, the Regional Comprehensive Economic Partnership (RCEP), with Asia Pacific countries, including Japan, South Korea, Australia, and other smaller Southeast Asian countries, aimed at developing transportation infrastructure without compromising environmental regulations.

Warehouse owners are increasingly turning to forklifts such as pallet jacks and stand-up riders due to their efficient design, which enables them to lift heavy weights and be flexible at greater heights. As warehouse owners seek to reduce operational costs and increase transparency within the warehouse, demand for compact electric construction equipment is expected to rise. Furthermore, renting construction equipment is becoming increasingly popular as customers prefer to hire construction equipment rather than bear the costs associated with procuring and maintaining the equipment. This trend has led to collaborations between construction equipment companies such as Komatsu Ltd, Mitsubishi Corporation, and Hyundai Construction Co., Ltd, and rental companies to introduce new products and gain a higher market share. The high demand for electric excavators, loaders, and forklifts from the rental industry is expected to drive the growth of the industry.

However, the global market growth may face challenges due to the fluctuating price of raw materials and the high cost of products. Nonetheless, rapid advancements in battery technology, coupled with high investment in charging infrastructure development, are expected to create new opportunities for players operating in the global compact electric construction equipment industry.

Dominating Companies in Electric Construction Equipment Market

• HITACHI CONSTRUCTION MACHINERY
• CATERPILLAR INC.
• KOMATSU
• JCB
• VOLVO CONSTRUCTION EQUIPMENT
• DEERE & COMPANY
• SANDVIK
• EPIROC
• LIEBHERR
• DOOSAN
• SOLETRAC INC.
• DANA LIMITED
• DEUTZ AG
• FENDT
• HUSQVARNA
• STIHL HOLDING AG AND CO. KG
• XUZHOU CONSTRUCTION MACHINERY GROUP (XCMG)
• SANY HEAVY INDUSTRIES
• KUBOTA CORPORATION
• KOBELCO CONSTRUCTION MACHINERY EUROPE B.V.
• BHARAT EARTH MOVERS LIMITED
• CRRC CORPORATION
• CNH
• WACKER NEUSON
• TAKEUCHI
• HYUNDAI HEAVY INDUSTRIES
• LUIGONG
• HAULOTTE GROUP
• Toyota Motor Corporation
• Hyster-Yale Group, Inc.
• Bobcat

Recent Developments in Electric Construction Equipment Market

Volvo Construction Equipment acquired the electric compact equipment manufacturer, Terex Corporation in 2020. The acquisition enabled Volvo to expand its electric construction equipment product line.

In 2020, Caterpillar Inc. announced its partnership with Arizona-based electric powertrain manufacturer, Fisker Inc. The collaboration aimed to develop a new line of zero-emissions construction equipment, such as electric compact loaders and excavators.

The Japanese construction equipment manufacturer, Komatsu Ltd, acquired Joy Global, an American mining equipment manufacturer in 2017. The acquisition strengthened Komatsu's electric mining equipment product line, including electric dump trucks and excavators.

In 2021, Hitachi Construction Machinery Co. Ltd announced its partnership with the electric vehicle manufacturer, ABB Ltd. The partnership aimed to develop an electric powertrain system for large-sized excavators, targeting the mining and construction industries.

In 2020, John Deere Construction & Forestry announced its acquisition of the Illinois-based electric construction equipment manufacturer, Norwood Sales Inc. The acquisition allowed John Deere to expand its product portfolio with electric construction equipment such as trenchers and vibratory plows.

In 2021, the German engineering and technology company, Siemens AG, announced its partnership with the Swiss mining equipment manufacturer, Epiroc AB. The collaboration aimed to develop an electric mine truck with a trolley system for overhead power supply, allowing for emissions-free and efficient transportation in underground mines.

In 2022, JCB, the British construction equipment manufacturer, announced its acquisition of the electric mini-excavator manufacturer, AUG, based in Austria. The acquisition allows JCB to expand its electric construction equipment product line and provides a foothold in the electric mini-excavator market.

Electric construction equipment is the future of construction. Its eco-friendliness, cost-effectiveness, and efficiency make it a compelling alternative to diesel-powered equipment. While electric machinery may have a higher initial cost, its long-term benefits outweigh the cost. As the demand for sustainable practices increases, we can expect to see more electric construction equipment on construction sites worldwide.