Market drivers for industrial and commercial EVs
Nov 03, 2011 Dr Peter Harrop
In understanding EV markets and trends it is absolutely vital to realise that their adoption is not usually for the popularly understood reasons such as saving the planet or getting a government subsidy. Most were successful without any government support and before saving the planet was an issue.
In fact, so far, electric vehicles are usually financially successful where are bought because they:
- Can be used indoors or under water
- - Make new things possible, such as record breaking pulling power from stationary, acceleration or silence.
- Save cost or hassle against alternative procedures - such as human effort replaced by a stair-climbing EV.
- Directly replace internal combustion engines on cost-over-life/pollution.
Frequently, the successes combine two or three of these attributes.
Pollution legislation or saving the planet have rarely been the primary reason why someone buys an EV but both are now becoming strong motivators with industrial and commercial vehicles.
The moral of the story is that those dedicated to reduction of pollution should design exciting, convenient, stylish and novel vehicles that replace human effort, make new things possible and save cost over alternative procedures. That way people will want to buy them and the pollution - reduction objective will be achieved. Examples in the industrial and commercial sector are shown below.
In understanding the market drivers for industrial and commercial EVs we must first understand trends for the different types of vehicle, whatever powertrain they employ, from buses to pedestrian operated lifters called "walkies" that are motor driven. Changes in demography, lifestyle and other factors are benefitting demand for industrial and commercial vehicles with the possible exception of pick-up trucks, which have been in decline overall in some advanced nations, reducing the potential increase in numbers of electric versions, which are on the increase.
Light industrial EVs typically replace human effort (and often associated non-vehicle aids) or make new things possible. Commercial EVs often directly replace internal combustion engines ICE. For example powered access platforms replace scaffolding and ladders with something safer and quicker to use indoors, usually where ICE was never an option, and usually save cost as well. Sometimes EVs in this sector replace ICE vehicles because of pollution laws or the desire of a company to be "green" or a local government wanting to stop its buses polluting. Frequently cost is saved as with postal deliveries in New York, where electric vans are much cheaper to own than ICE vans. However, that overall growth of sales of pick-up trucks is threatened in the same way as cars by the young having a different lifestyle and the increasing number of elderly that cannot or do not drive on-road vehicles. Nonetheless, the percentage of pick-up trucks that are electric will increase, so this phenomenon hits conventional engines first.
The fact that electric motors can be stopped and started very frequently without wearing out or failing is often a benefit. No idling is needed: that means a saving in power consumption, noise and pollution. It is difficult to generalise across a sector with the greatest fragmentation and largest variety of existing and new applications and reasons for adoption. However, most light industrial and commercial vehicles are used less intensively than buses, trucks and the heavy industrial vehicles discussed in the previous chapter. They rarely have the continuous two or three shift working of many heavy industrial vehicles with high power delivery and duty cycles.
Where long range is required, hybrid technology is used, notably with many commercial vehicles. This means that manufacturers of "light" vehicles do not usually match their income from sale of vehicles with income from (frequently needed) spare parts, maintenance and other services. Light industrial vehicles never need one set of batteries cooling down and another recharging while the third set is in use unlike forklifts.
Customisation is much more common in light industrial vs heavy industrial, though this is often carried to excess, with high costs and sub optimal reliability resulting.
On-road vehicles are moving to electric technology to save cost of ownership - particularly after purchase because maintenance and fuel costs may drop sharply. On road commercial vehicles, including those owned by government organisations, are often required to set an example in pollution control, even where the economics of doing this are not yet favourable. Some are subject to new pollution laws reducing noise and gaseous pollution, for example, in city centers. However, there is one thing in common with the smaller vehicles: they also have to cope with frequent stop and start.
Buses and trucks are either made by independent companies or by companies that also make military vehicles or cars. By contrast, light commercial on road vehicles tend to be made by companies that are small and independent. Here the shakeout has yet to come. Only a small number of mergers and acquisitions have taken place in this sub sector so far. Indeed, many airport ground support equipment GSE suppliers only serve that single market rather in the way that those making mobility aids for the disabled have been able to ignore the bigger picture. This will change.
Overall, there is an increase in the number of industrial and commercial vehicles, particularly in emerging nations where it is driven by increasing industrialisation this becoming more sophisticated. However, pick-up truck sales have been in sharp decline in the USA probably because they are often purchased as an alternative to a car or for use in small businesses and this is increasingly unaffordable in terms of cost of the vehicle and its fuel. In addition, small businesses are less likely to need to ship hardware in a pickup trucks because they increasingly sell services or supply hardware from a remote manufacturer using a trucking service. By contrast, other industrial and commercial vehicles are hugely benefitting from changes in society caused by ageing populations, increasingly congested roads, changing lifestyles and other factors.
For more, read the new IDTechEx report on Industrial and Commercial Electric Vehicles 2012-2022 . It explains how this is the largest sector by value of the electric vehicle business today and why it is set for continued rapid growth.
Also attend Electric Vehicles Land Sea Air USA 2012,where a large number of electric vehicle manufacturers not seen in conventional EV events will present including WheelTug aircraft electrification, MotoVolta, LLC motorbikes, SolTrac farm tractors, Monterey Bay Aquarium Research Institute Autonomous Underwater Vehicles AUVs and manufacturers of industrial, commercial, military, e-bike, cars and other EVs.