the off-highway vehicle market 2019...• interact analysis forecasts that the electrification...
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Confidential. © 2017 Interact Analysis. All Rights Reserved.
The Off-Highway Vehicle Market – 2019Includes Global Vehicle Powertrain Forecast
Publishing June 2019
Jan Zhang
Research Director, China
+86 (21) 2050 1835
Alastair Hayfield
Research Director, UK
+44 (0) 1604 936 204
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Contents
The Global Off-highway Vehicle Market / June 2019
3
Global Off-highway Vehicle Market Summary
2018 Market Volume and Growth Forecast
Regional Share and Sales Forecast by Region
Electrification and Powertrain Technology
Electrified Off-highway Vehicle Market Sales Forecast
Electrification Drivers and Challenges
Drivers and Challenges for Off-highway Vehicle Electrification
Forecast Model
Emission Standard
Active and Planned Emission Zones Globally
Active and Planned Emission Zones in Europe
Diesel Bans and Zero Emission Construction
Low Emission Zones: active and proposed
Top 1000 cities with highest levels of PM10.0 air pollution
Global GDP per capita
Which cities might enact low emission zones?
Off-highway Vehicle Type and Its Impact on Electrification
Market Dynamics Overview
Full Electric - Lead Acid vs. Lithium-Ion
Lithium-Ion Battery Technology Analysis - Drivers and Barriers
Comparison of Mainstream Battery Chemistry and Package Type Characteristics
The Declining Cost of Lithium-ion Batteries
Hydrogen
Charging Infrastructure
Oil Price Forecast
Vehicle Analysis
Excavators
Loaders
Aerial Work Platforms
Lift Trucks
Underground LHD
Off-highway Trucks
Regional Analysis
North America Off-highway Vehicle Market
Europe Off-highway Vehicle Market
China Off-highway Vehicle Market
Competitive Landscape Analysis
Excavator Market Overview
Market Share Change for China Excavator Market - 2010 vs. 2018
Material Handling Equipment Market Overview – Aerial Work Platforms
Material Handling Equipment Market Overview – Lift Trucks
Companies Developing Electric Solutions for Off-highway Market
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Contents
The Global Off-highway Vehicle Market / June 2019
4
Methodology
Methodology
Methodology: Primary Research
Methodology: Secondary Research
Methodology: forecasting model
Definitions
Definitions: Off-highway Vehicles
Definitions: Powertrains
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Global Off-highway Vehicle Market Summary
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546,799
101,594
1,497
107,127
194,749
21,999
179,535
1,665,089
3,616 1,406
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2018
Excavator Backhoe Loader Crawler Loader
Skid-steer Loader Wheeled Loader Bulldozer
Aerial Work Platform (AWP) Lift Truck Off-highway Truck
Underground LHD
Global Off-highway Vehicle Sales Units - 2018
Source: Interact Analysis © 2019 Interact Analysis
-5%
0%
5%
10%
15%
20%
25%
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Excavator LoaderBulldozer Aerial Work Platform (AWP)Lift Truck Off-highway TruckUnderground LHD
Global Off-highway Vehicle Sales Forecast (2017 - 2028)
Source: Interact Analysis © 2019 Interact Analysis
• For the global off-highway vehicle market, noticeable growth started in 2017
and lead to a strong 2018, with overall market unit shipments growing by
14%. This growth is forecast to slow down in 2019 for all segments.
• Lift truck is the largest segment in terms of units shipped, AWP is forecast to
see the highest CAGR during the forecast period of 9.3%.
• Material handling equipment is predicted to have stronger growth than
earth moving equipment. Light/compact equipment is forecast to see
stronger growth than heavy equipment.
The Global Off-highway Vehicle Market / June 2019
6
Global Off-highway Vehicle Market2018 Market Volume and Growth Forecast
Excavator
Backhoe
LoaderCrawler
Loader
Skid-steer
Loader
Wheeled
Loader
Bulldozer
Aerial
Work
Platform
(AWP)
Lift Truck
Off-highway
Truck
Underground
LHD
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0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
2017 2018 2023 2028
China India Japan South Korea
Rest of Asia Oceania North America Latin America
Europe Middle East & Africa
Off-highway Vehicle Sales Forecast - by Region
Source: Interact Analysis © 2019 Interact Analysis
0% 20% 40% 60% 80% 100%
Excavator
Loader
Bulldozer
AWP
Lift Truck
Off-highway Truck
Underground LHD
China India Japan Oceania South Korea Rest of Asia North America Latin America Europe Middle East & Africa
Global Off-highway Vehicle Market by Region - 2018
Source: Interact Analysis © 2019 Interact Analysis
• China is the largest market for off-highway vehicles and will continue to be
the largest regional market during the forecast period.
• Among all the regions/countries analyzed in this report, India and China are
forecast to be the two fastest growing regional markets, with CAGR between
2017 and 2028 being 7.9% and 7.6% respectively.
• North America is the largest regional market for AWPs, loaders and
underground LHDs in 2018. China is the largest regional market for
excavators, bulldozers and lift trucks in 2018.
The Global Off-highway Vehicle Market / June 2019
7
Global Off-highway Vehicle MarketRegional Share and Sales Forecast by Region
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The Global Off-highway Vehicle Market / June 2019
8
Global Off-highway Vehicle MarketElectrification and Powertrain Technology
0%
20%
40%
60%
80%
100%
2017 2018 2023 2028
Mini Excavator Small Excavator Medium Excavator Large Excavator
Backhoe Loader Crawler Loader Skid-steer Loader Wheeled Loader
Bulldozer Boom Lift Scissor Lift Telehandler
Lift Truck Off-highway Truck Underground LHD
Off-highway Vehicle Electrification Penetration Rate - by Vehicle Type
Source: Interact Analysis © 2019 Interact Analysis
• Interact Analysis forecasts that the electrification penetration rate for global
off-highway vehicles will increase from 38.7% in 2017 to 55% in 2028.
• Material handling equipment is far ahead of construction equipment in
electrification, with scissor lift leading the trend, followed by lift trucks. For
most construction equipment, the electrification penetration rate is less
than 2% currently. More clear movement towards electrification won’t start
until around 2023, under the pressure of stringent emission standards and
advances in technology development in batteries.
• Most heavy equipment will be slow in moving towards electrification except
for underground mining LHDs.
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
The Global Off-highway Vehicle Market by Powertrain
Source: Interact Analysis © 2019 Interact Analysis
Confidential. © 2019 Interact Analysis. All Rights Reserved.
The Global Off-highway Vehicle Market / June 2019
9
Global Off-highway Vehicle MarketElectrified Off-highway Vehicle Market Sales Forecast
0%
10%
20%
30%
40%
50%
60%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2,017 2,018 2,023 2,028
Un
it S
ale
s G
row
th R
ate
Un
it S
hip
me
nts
Mini Excavator Small ExcavatorMedium Excavator Large ExcavatorSkid-steer Loader Backhoe LoaderWheel Loader Crawler LoaderBulldozer Off-highway TruckUnderground LHD Boom LiftScissor Lift TelehandlerLift Truck Electrified Vehicles Sales Growth Rate
Electrified Off-highway Vehicle Market Sales Forecast - Global
Source: Interact Analysis © 2019 Interact Analysis
0%
200%
400%
600%
800%
0
20,000
40,000
60,000
80,000
100,000
120,000
2,017 2,018 2,023 2,028
Un
it S
ale
s G
row
th F
ore
ca
st
Un
it S
hip
me
nts
Mini Excavator Small Excavator Medium Excavator Large Excavator
Skid-steer Loader Backhoe Loader Wheel Loader Crawler Loader
Bulldozer Unit Sales Growth Rate
Electrified Construction Equipment Sales Forecast - Global
Source: Interact Analysis © 2019 Interact Analysis
0%
20%
40%
60%
80%
100%
120%
140%
160%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2,017 2,018 2,023 2,028
Un
it S
ale
s G
row
th R
ate
Un
it S
hip
me
nts
Boom Lift Scissor Lift Telehandler Lift Truck Unit Sales Growth Rate
Electrified Material Handling Equipment Sales Forecast - Global
Source: Interact Analysis © 2019 Interact Analysis
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Electrification Drivers and Challenges
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Drivers and Challenges for Off-highway Vehicle Electrification
The Global Off-highway Vehicle Market / June 2019
11
•Off-highway engine emission standards
•Active and planned emission zones
•Size of the machine
Emission Standards
•Places where the vehicles are used
•Applications require zero emissions?
•Applications require zero noise?
Industry / Application Requirement
•Overall cost down
•Versatility offered by the technology
Economic Viability (TCO)
•Willingness to invest in electrification technology
•Political sentiment
OEM
•Up-front cost
•Total cost of ownership
•Reliability, safety
End-user
•Maturity of available technologies
•Engineering design/packaging
Duty-cycle Integration
•Regional trend
•Existing technology and its acceptance
Infrastructure Availability
• ICE (Diesel, Bio-fuel)
• Mild Hybrid
• Full Hybrid
• Full Electric
• Hydrogen
• Others
Powertrain Technologies
Drivers Challenges
• Emission legislation and standards set the framework for electrification. The timing of new stricter emission norms indicate
which regions are more likely to move faster with regard vehicle electrification. However, there is no one-solution-fits all
approach to electrification, and the corresponding approach for each vehicle type is determined by the needs of the
application first.
• For the moment, TCO seems to be barrier towards electrification. Apart from Japan who give subsidies to compensate the
increase initial cost, places where no subsidies given on electrified machines, such as US/Europe, there is limited motivation
in adopting electrification for new application. TCO will become a driver only when the technology route and component cost
comes down to a level that can compete with the cost of ICE system.
• There are many challenges, but the most manageable challenges are the technical ones. Much vehicle technologies are
available off the shelf, all that needed is to do the whole system integration and packaging them together. What is less
mature and less manageable are the sales, marketing, aftermarket, and customer-acceptance dimensions. For quite a few
market that got none of these technologies ready, this seems to be a big shift to take.
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Forecast Model (1)
The Global Off-highway Vehicle Market / June 2019
12
Where / When Electrification might take place?Emission Standards
Off-highway Vehicle Type
Size
Application
Duty Cycle
Economic Viability (TCO)
Technology
Infrastructure
Battery
Hydrogen
How does electrification trend vary by different vehicle type?
• Size (small – large) + Application ( rural – urban)
• Duty cycle (low – high productivity)
Different vehicle portfolio
and application by region
What technology is available ?
What does the development of these technologies look like?
What is the availability of charging infrastructure?
Regional readiness to new
technology will impact
supply, pricing,
technology, infrastructure,
and ultimately impact TCO
Region
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Forecast Model (1)
The Global Off-highway Vehicle Market / June 2019
13
• During interviews, Interact Analysis has identified emission standards, industry/application requirements and TCO as the main factors that impact the electrification
penetration rate for each vehicle type and country/region.
• Emission standards have a direct impact on electrification transition across all regions and vehicle types discussed in the report, determining when and where the trend
might start to take place.
• Following the emission standard analysis, models are created for each vehicle type based on their size/application/duty cycle, to quantify the drivers for each off-highway
vehicle type and use a combination weightings to help forecast their electrification penetration rate, which is a percentage of electrified off-highway vehicles out of the
total number of vehicles within a particular segment delivered annually.
• TCO estimates by different powertrains is a variable factor that will change during the forecast period, depending on the development of battery technology, hydrogen
technology and powertrain technology.
• The penetration rate is then applied to the underlying sales forecast to determine the absolute number of electric vehicles delivered annually for a particular segment.
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Forecast Model (2)
The Global Off-highway Vehicle Market / June 2019
14
2018 2020 2022 2024 2026 20282017
North America
EuropeJapan
China
India
South Korea
South America
Oceania
Rest of Asia
Middle East & Africa ❶ ❷
❸How emission standards and the application that these
vehicle types are involved in is going to impact the
electrification penetration rate for each vehicle type.
From a customer request perspective
1. What are the important factors to take into
consideration when making a strategic decision
towards electrification (projected by weighting)
2. For different powertrain technologies, what are their
advantages and disadvantages respectively, and
which powertrain is more likely to dominate
(projected by final score)
In which region and when, electrification might take place
Lift Trucks WeightingICE (Diesel,
Bio-fuel)
Mild
HybridFull Hybrid Full Electric Hydrogen Others
Initial Cost 14 1 0 0 2 -1 0
Lifetime Cost (TCO) 15 1 1 1 2 2 1
Performance and Productivity 10 1 1 1 1 1 1
Energy Density 9 1 1 1 2 2 1
Charging Efficiency 10 1 1 1 2 2 1
Engineering Design / Packaging Impact 2 1 0 0 2 2 1
Reliability 9 1 0 0 2 2 1
Maintenance 9 1 0 0 2 2 0
Safety 5 1 1 1 1 1 1
Infrastructure / technology availability 6 1 1 1 2 1 1
Environmental Impact 11 1 2 2 3 3 2
Total 100 100 77 77 196 148 88
Emission
StandardApplication
Mini Excavator (<6t) 5 4 9
Small Excavator (6-13t) 4 4 8
Medium Excavator (13-30t) 3 2 5
Large Excavator (>30t) 2 2 4
Wheeled Loaders 3 3 6
Backhoe Loaders 3 2 5
Crawler Loaders 3 2 5
Skid-Steer Loaders 3 2 5
Bulldozers 2 2 4
Off-highway Trucks 1 1 2
Underground LHD 1 5 6
Boom Lifts 4 5 9
Scissor Lifts 5 5 10
Tele-handlers 3 4 7
Lift Trucks 5 5 10
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Emission Standard (1)
• The Tier 4 final emissions regulations in the US and Stages IV in Europe are currently the strictest emission standards worldwide. This does not only
impact the engine design and development in these two regions, but also becomes a driving factor in electrification. Older and generally less
stringent emission regulations are in force in other markets. With other markets looking to introduce similar emissions controls in the future, those
manufacturers who developing strategies and products to meet the strictest standards will benefit economically in the long fun from developing
these sophisticated technologies.
• Regulatory authorities in Europe, USA, and Japan have been under pressure from engine and equipment manufacturers to align worldwide emission
standards, to streamline engine development and emission type approval/certification for different markets. European Stage I/II limits were in part
harmonized with US regulations. Stage III/IV requirements were harmonized to a large degree with the US Tier 3/4 standards. However, Stage V lost
some harmonization, with the Stage V PN limits requiring diesel particulate filters (DPF) on all affected engines, while the US Tier 4 standards can
be met without filters.
• Owing to the very strong influence of the government on policy, China will go to a similar level in emission norms aligned with Tier 4 and Stage IIIB
when China Phase IV starts to be implemented. The tentative implementation date of the Phase IV is January 2020. However, some uncertainty
exists over the exact implementation date. And with the current economic slow-down in China and trade war impact, the implementation time is
very likely to be delayed until 2021.
• With the extended service intervals and lower fuel consumption of compliant machines, end-users will start to see the economic benefits from
buying low emission equipment over the mid-long term. This, together with other markets looking to introduce similar emission controls in the near
future, means other developing regions will follow quickly on the electrification trends that are set by Europe/US. Over the years, there will be less
difference in the level of electrification among all major regions.
The Global Off-highway Vehicle Market / June 2019
15
Off-highway engine emission standards
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Emission Standard (2)
The Global Off-highway Vehicle Market / June 2019
16
Off-highway engine emission standards
EU
US
Japan
China
EU
US
Japan
China
EU
US
Japan
China
EU
US
Japan
China
EU
US
Japan
China
2014 Regulation2011 Regulation2006 Regulation
19-37kW
37-56kW
56-75kW
75-130kW
130-560kW
Stage IIIB Stage IV
Stage IIIA
2007 Regulation 2013 Regulation
2008 Regulation 2013 Regulation
2012 Regulation 2015 Regulation2008 Regulation
Interim Tier 4 Tier 4
Stage V
Interim Tier 4 Tier 4
2020
Phase I Phase II Phase III Phase IV
2014 2015 2016 2017 2018 20192009 2010 2011 2012 2013
Phase I Phase II Phase III Phase IV
Phase I Phase II Phase III Phase IV
Phase I Phase II Phase III
Interim Tier 4Teir 3 Tier 4
Tier 3 Interim Tier 4
Stage IIIA Stage V
Phase I Phase II Phase III Phase IV
Stage IIIB Stage IV
Tier 3 Interim Tier 4 Tier 4
Tier 4
Stage IIIA Stage III B
Phase IV
Stage VStage IV
2015 Regulation2012 Regulation2007 Regulation
Stage IIIA Stage V
Stage IIIA Stage IIIB Stage V
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Active and Planned Emission Zones Globally
The Global Off-highway Vehicle Market / June 2019
17
Active and Planned Emission Zones Globally - Europe has taken a lead with city level regulations and bans
Globally, the
overwhelming majority of
low emission zones are in
Europe. However, as will
be seen on the following
slide, this represents a
real mix of standards,
with some cities opting
for or proposing near total
bans on diesel and petrol;
vehicles, with others
enforcing low
requirements.
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Active and Planned Emission Zones in Europe
The Global Off-highway Vehicle Market / June 2019
18
Germany has the most zones, but most are only have a very low standard
Europe has the most low emission zones, with some having been
in place since before the millennium. London and Paris probably
have the most ambitious plans and schemes – looking to ban or
significantly reduce all polluting vehicles. Germany has the most
zones, but these typically have a low minimum standard – Euro 1
for petrol or Euro 4 for diesel. In essence many older, heavily
polluting vehicles can still be driven and it is debatable how much
impact these zones actually have.
However, proposed zones have much stricter standard – Euro 5 or
6, and London is proposing a specific focus on non-road mobile
machinery. As London is typically the lead, it is expected that other
major cities will enact zero or ultra-low emission zones in Europe.
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Diesel Bans and Zero Emission Construction
The Global Off-highway Vehicle Market / June 2019
19
Multiple countries proposing petrol and diesel car bans. Construction and mining initiatives for zero emission
Oslo to trial
construction of
buildings with
zero emissions
from construction
equipment
London to trial
NRMM projects
that limit
emissions from
construction
equipment
Volvo CE actively
running a zero
emission mining
site
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0
20
40
60
80
100
120
140
160
Euro 1 Euro 2 Euro 3 Euro 4 Euro 5 Euro 6
Nu
mb
er
of
LE
Z
Emission Standard
Active Low Emission Zones
Both Diesel Petrol
0
2
4
6
8
10
12
14
16
18
Euro 1 Euro 2 Euro 3 Euro 4 Euro 5 Euro 6
Nu
mb
er
of
LE
Z
Emission Standard
Proposed Low Emission Zones
Both Diesel Petrol
Low Emission Zones: active and proposed
For proposed emission zones, there is a significant increase in the ‘minimum’ standard versus existing zones. This is a positive,
but still means many zones in Europe only ban the oldest vehicles, leaving many cities still relatively heavily polluted.
The Global Off-highway Vehicle Market / June 2019
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Top 1000 cities with highest levels of PM10.0 air pollution
The Global Off-highway Vehicle Market / June 2019
21
Based on data collected by the World Health Organization (WHO), it is possible to establish those countries with the most polluted cities
Those countries with the
worst air pollution
(particulate matter
scores) in cities are China
and India. Other emerging
economies also perform
badly. These countries do
not have active low
emission zones. If China
or India, or individual
cities within those
countries, were to restrict
emissions, this could act
as an important drive
toward electrified off-
highway equipment
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Global GDP per capita
The Global Off-highway Vehicle Market / June 2019
22
Those regions with low PM10.0 emissions and emission zones have highest GDP per capita
Current and planned
emission zones are,
almost exclusively,
located in regions of the
world with high GDP per
capita and relatively good
air quality scores.
Ironically, the areas that
need them most are least
able to afford a transition
to newer technology. This
may well act as a drag on
the market for electrified
off-highway equipment.
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41%
59%
Of leading Mercer cities,
does city already have
existing or planned low
emission zone?
Y N
15%
85%
Of leading Mercer cities without
existing or planned emission
zones, do other cities in the
same country have emission
zones?
Y N
• Tokyo
• Chicago
• San Francisco
• Philadelphia
• Boston
• Singapore
• Seattle
• Toronto
• Sydney
• Melbourne
• Montreal
• Dublin
• Brisbane
• Perth
• Vancouver
• Zürich
• Calgary
• Honolulu
• Adelaide
• Ottawa
• Auckland
• Geneva
The Global Off-highway Vehicle Market / June 2019
23
Which cities might enact low emission zones?The Mercer Quality of Living Survey ranks cities on their quality of life. This is a primary driver in the ‘political
Using the distribution of harmful particulate emissions, the Mercer survey, city GDP
and the presence of existing emission zones, it is possible to locate other cities
which may look to adopt emission standards for political/social reasons in the next
5-7 years.
Cities that may enact low emission zone
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Off-highway Vehicle Type and Its Impact on Electrification
The Global Off-highway Vehicle Market / June 2019
24
Machine Size and Its Application
Now 2-5 years 6-10 year horizon
Small and
compact
equipment
Medium-size
equipment
Large-size
equipment
<37kW
37-55kW
55-130kW
130-225kW
225-560kW
>560kW
Specialized Underground Mining
Equipment – Underground LHD
• Compact equipment & material handling <37kW
• Lift trucks, scissor type AWP, mini excavator and
wheeled loader, etc.)
• used indoors or requiring zero fume / zero noise
• Starts & selective replacement of attachments
• Diesel downsizing for small equipment <56kW
(boom type AWP, telehandlers, Mini & Small
excavator etc.)
• Full replacement of mechanical attachments
• Diesel downsizing for larger equipment >56kW
• Diesel downsizing for larger equipment >160kW
• Small construction & residential equipment <56kW
• Material handling equipment – boom type AWP,
compact Telehandler
• Construction equipment – wheeled loader, Skid-
steer loader, Small and medium excavator used in
urban cities
• Small construction & agricultural equipment >56kW
• Telehandler, small tractors, small excavators,
wheeled loaders used in low emission zone
Full Electric Hybrid
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Off-highway Vehicle Type and Its Impact on Electrification
• Although emission legislation has been one of the key drivers for off-highway vehicle electrification, when examining vehicles used for different industrial
applications, there are also requirements for electrification for reasons beyond emission reduction.
• Indoor applications - as the construction process advances a building becomes more closed, even sealed completely from the outside environment, the use of
battery powered electric machines gain a huge advantage as these machines provide a clean, quiet power source for such conditions. And lower cost than
using different machines for outside and inside.
• Safety – underground mining has extremely high requirements for safety, sustainability and zero harm to workers. Electrified vehicles can help to create
emission free mining environment and also cut down the cost of ventilation related to higher temperatures at greater depths and the use of diesel equipment,
to improve employee health.
• Digitalization and intelligence – there has been an increasing emphasize on digitalization and intelligence of solutions for many of the off-highway vehicles.
Although it’s not essential to have fully electric machine to enable digitalization and intelligence (many autonomous mining truck today already have well
developed autonomous solution whilst they’re propelled by diesel engine), a fully electric equipment will make the design more integrated, and can easily
monitor the status of all electric components such as motors, actuators. In addition, from a marketing perspective, fully electric solution will make the brand
and design more futuristic.
The Global Off-highway Vehicle Market / June 2019
25
Industry / Application Requirement
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The Global Off-highway Vehicle Market / June 2019
26
Market Dynamics Overview (1)Challenges – Duty-cycle Integration
Low Duty Cycle / Energy Demand High
Static
Factory Site
Motor Way
Construction Site
Op
era
tin
g R
an
ge
/ In
fra
str
uctu
re A
va
ila
bilit
y
Full Electric
Combustion
Engine
Aerial Work
Platform (Scissor)
Lift Truck
Class 1 – Class 3
Aerial Work Platform
Lift Truck
Class 4&5
Mini Excavator
Small Excavator
Medium Excavator
Large Excavator
Bulldozer
Wheeled LoaderTelehandler
Wheeled Loader
Wheeled Loader
Backhoe Loader
Skid-Steer Loader
5 5 - 1 3 0 k W & 1 3 0- 2 2 5 k W 2 2 5 - 5 6 0 k W & > 5 6 0 k W< 3 7 k W & 3 7 - 5 5 k W
Skid-Steer Loader
Low Duty Cycle / Energy Demand High
Static
Factory Site
Motor Way
Construction Site
Op
era
tin
g R
an
ge
/ In
fra
str
uctu
re A
va
ila
bilit
y
Full Electric
Vehicle Weight – Small / Compact
Power needed – Low to medium
Productivity – Low to medium
Duty cycle - Low
Powertrain – full electric, hybrid
Infrastructure Availability –
Recuperation and good charging
potential
Vehicle Weight – Medium to heavy
Power Needed – Medium to high
Productivity – Medium
Duty cycle – Low to Medium
Powertrain – full electric, hybrid,
tethered
Infrastructure Availability –
Remote use but infrequent charging
demand
Vehicle Weight – Medium to Heavy
Power – High
Productivity – Medium to high
Duty cycle – Medium to high
Powertrain – full electric, hybrid,
tethered
Infrastructure Availability –
High load and availability
Vehicle Weight - Compact
Power – Medium
Productivity – Medium
Duty cycle - Medium
Powertrain – full electric, hybrid
Infrastructure Availability –
High load and plannable shift
Combustion
Engine
Off-highway TruckUnderground LHD
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Market Dynamics Overview (1)
The Global Off-highway Vehicle Market / June 2019
27
Challenges – Duty-cycle Integration
• The challenges are
1. the energy storage method
2. limiting machine consumption of that stored energy
3. the ability to quickly generate or replace that energy again
• The major challenge comes down to the primary function of the machine’s power plant: is the primary function to propel or is it to provide cylinder movements?
Is the machine set up so that the machine is always moving with implement-type motion or to position the machine and then to work such as lift and lower or
extend/retract, then move again and repeat? The answers to these questions will shape how companies in this industry react in the next years.
• One must also ask whether there will be electric actuators that can replace the power density of the hydraulics. For moving the vehicle, there seem to be trends
towards electrics based on success in automotive and on-highway applications but the use and power consumption rate for off-highway/construction
equipment has to be evaluated. For actuators, this remains an open topic.
• Some machines are already quite static and become even more static if there are changes at the site. This opens the possibility of powering them by cables
hooked into the grid. Or sites might develop their own local electric grid with storage, and this could include renewable energy such as wind and solar at the
site.
• As technology advances, there will be successes in the on-highway sector regarding the ability to “power” vehicles such as Class 8 trucks, perhaps with
hydrogen fuel cells. There will also be improvements in reliability and safety. It is expected that technology transfer into the off-highway sector from trucks and
buses in the categories of medium and larger construction vehicles will happen. There are certainly hybrid technologies such as diesel or gasoline and electric
that are already being used, but switching over to a hydrogen-based energy economy requires new infrastructure to produce and distribute the fuel to power
these machines.
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Market Dynamics Overview (2)
• The total cost of ownership (TCO) plays a pivotal role in the trend towards electrification. Given the B2B nature of the industry, some customers are typically less
concerned with the up-front cost; focusing instead on the overall cost throughout the ownership of the vehicle.
• Today, only a few material handling equipment types which are used mainly indoors or in urban city areas, have shown that the TCO of the battery electric off-
highway vehicle is cheaper than its diesel counterpart over the lifetime. For the majority of off-highway vehicles, there is no obvious cost benefits in developing
electrified equipment, as well as the opportunity cost of potentially investing in a technology which will cost far less in the future. The total cost of ownership
has to be proven for large market share increases beyond niche application for electric power machines.
• Once the total cost (upfront + operating costs) over a four to six year period for a battery electric commercial vehicle reaches parity with an equivalent diesel
model, most operators will likely choose the battery electric option resulting in mass adoption. In scenarios where the pay back time is longer than six years,
the demand will primarily come from early adopters resulting in low overall market volumes.
• As with any new technology, the total cost is initially high. But with continued advancements in charging infrastructure, battery technology, and fast charging-
technology that will overcome the major engineering challenges. In addition, as electrification takes hold across many markets, the component costs will
decrease. Off-highway vehicles will also benefit from advances in adjacent markets such as transit buses and Class 6,7 and 8 trucks.
• Electric power will make vehicles more productive by using more efficient subsystems sized to do the work, including high-efficiency electric motors and
generators, and combined electrohydraulic actuators. Electric motors do not require the service attention of engines, such as oil changes, filter changes, or hot
and cold temperature fluid requirements. Higher levels of component integration into sub-systems will further drive down costs and further reduce vehicle
weight and size.
The Global Off-highway Vehicle Market / June 2019
28
Challenges – Economic Viability (TCO)
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Market Dynamics Overview (2)
The Global Off-highway Vehicle Market / June 2019
29
TCO Model, simplistic (doesn’t include cost of credit, amortization, etc.)
Machine Cost
Annual Maintenance Cost
Annual Fuel Cost
Diesel ModelMachine Cost +20%
Annual Maintenance Cost
Annual Fuel Cost
-10% to -20%
Hybrid ModelMachine Cost +50%
Annual Maintenance Cost
20% to -50%
Annual Fuel Cost
Battery price per kw price
Annual Electricity cost in the county
Battery ModelMachine Cost +50%
Annual Maintenance Cost
Annual Fuel Cost
Hydrogen Model
• With the exception of underground mines, mining facilities will be slow to adopt all but the smallest of fully electric machines. Likely see hybrids for these applications
in the mid-term where there is a strong TCO. If no TCO, remain diesel
• Urban machines will be fully electric in 10 years UNLESS the machine must operate a long way from charging and/or charging access is limited i.e. excavator working
along trainline or motorway. Local emission standards supersede this – machines will remain diesel if no legislation to push it
• Machines used remote to urban areas i.e. small towns, cities or where they are only there for temporary time (i.e. one- or two-day’s rental), will be slower to fully
electrify.
Diesel or, within 3 years
some hybridization
depending upon
country and regional
emission norm.
Where TCO benefit, some move to hybrid or electric ahead of the emission standard or move to low emission
zones. Depends upon battery size, fuel price, duty cycle, etc.
Electric for all machine
types, size and duty
cycle. May need
hydrogen as fuel to
achieve this for larger
machines. Zero
emission zone
supercedes use of
technology based on
size or duty cycle
Confidential. © 2019 Interact Analysis. All Rights Reserved.
Market Dynamics Overview (3)
• ICE - Combustion engines will remain important for many years to come as they are designed to be more and more efficient.
• Hybrid solutions - Hybrids will play a role in the journey toward full electric. The versatility offered by the hybrid powertrain makes it a lower-cost solution to
stringent emissions regulation because it can be used both indoors and out. That means hybrid solutions will save on transportation costs and minimize time
inefficiencies associated with waiting for machines to be delivered.
• Full battery solutions – whilst weight, charge times for batteries and run times have improved, massive adoption of battery-powered light equipment over
traditional gas or diesel-driven machines has yet to materialize. Prices for batteries and hybrid systems are coming down but not to the point where they are
mainstream. They need to be durable and reliable. However, with battery technology now being used in passenger vehicles and on-highway vehicles, mass
production of battery will help to lower the price while improving battery capacity and performance to the point where they can be more widely adopted with
confidence.
• Hydrogen solutions - Hydrogen will be an important parallel approach to electrification. However, the current technology is still immature and expensive for
heavy duty applications and there is a limited supplier base. All of this combines to make hydrogen the least viable technology route at the moment.
The Global Off-highway Vehicle Market / June 2019
30
Technology Route
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The Global Off-highway Vehicle Market / June 2019
31
Full ElectricLead Acid vs. Lithium-Ion
Lead Acid Lithium-Ion
Charging Time 8-10 hours 0.5-3 hours
Cost Initial
Cost
one of the cheapest batteries
available on the market, both in its
initial cost as well as cost per kWh
initial cost of lithium-ion
batteries is about 50% higher
than lead acid batteries but its
cost per mile is lower than
lead acid.
Lifecycle
Cost
Resilience irreversibly damaged if discharged too
quickly or deeply.
Will lose potential cycles if they’re
discharged below 50% of their state of
charge
can be discharged to about
80% of their state of charge
Cycle Lifetime 400-1500 (average) 2000-3000 (average, if used
properly)
Weight, Size &
Storage
Lead Acid battery is heavier than Lithium-Ion one. Therefore, using
lithium ion batteries allows space for other important payloads
Energy Density 50-90 Wh/L 125-600+ Wh/L
Charging Method When charging, need to take the
battery out from the lift truck and
place in charging base
Vehicles can be plugged
directly to the wall for charging
without taking battery out
Reliability Mature supply chain and reliable
performance
The supply is not fully secured
yet during this early stage, and
reliability needs to be proved
• Full electric powertrains are already widely used in material handling
equipment, e.g. lift trucks and aerial work platforms, and for which, lead-
acid batteries have been the main source of power for quite a few years
already. Lead acid is a popular, cost-effective battery chemistry, available in
large quantities with little worries relating to security of the supply and in a
variety of off the shelf pack sizes.
• Lithium-ion batteries have become the “full electric” option for passenger
vehicles and on-highway buses and trucks and are now moved to off-
highway vehicle market.
• The figure on the left side compares some of the key parameters of lead
acid and lithium-ion battery. Although lithium-ion batteries have advantages
over lead acid batteries in quite a few criteria, cost/security of
supply/reliability and safety will remain the main concerns for customers.
•
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Lithium-Ion Battery Technology Analysis - Drivers and Barriers
Drivers:Political
Sentiment
Economic Viability
(TCO)
Environmental
Policy
Passenger Vehicle 4 3 4
Bus 5 3.5 3
Truck 3 4 5
Off-Highway Vehicle 5 5 5
Two-Wheeler/Trike 4.5 3 4
ESS 3 2 3
CE 2 1 1
Political
Sentiment
Economic Viability
(TCO)
Environmental
Policy
China 5 3 5
Japan 4 4 4
South Korea 3 4 3
Rest of APAC 3 2 3
Austria 3 3 3
Czech Republic 3 3 3
France 4 3 4
Germany 4 4 4
Hungary 3 3 3
Poland 3 3 3
Sweden 3 4 5
The United Kingdom 4 4 4
Rest of EMEA 3 3 4
Canada 3 3 3
USA 3 3 3
Rest of Americas 3 2 2
Barriers:
Up-Front Cost Consumer
AcceptanceInfrastructure
Technical
bottleneck
Passenger Vehicle 4 5 5 5
Bus 3 3 4 3
Truck 4.5 5 5 4
Off-Highway Vehicle 5 5 4 4
Two-Wheeler/Trike 3 4 3 2
ESS 2 2 2 3
CE 1 2 1 2
Up-Front Cost Consumer
AcceptanceInfrastructure
Technical
bottleneck
China 5 4 4 2.5
Japan 3 2 2 2
South Korea 3 2 3 2
Rest of APAC 4 4 4 4
Austria 3 3 3 3.5
Czech Republic 3 3 3 3.5
France 3 3 3 3
Germany 3 3 2 3
Hungary 3 3 4 3.5
Poland 3 3 4 3.5
Sweden 2 2 3 3
The United Kingdom 3 3 3 3
Rest of EMEA 3 2 3 3.5
Canada 3 3 3 3
USA 3 3 3 2
Rest of Americas 3 3 3 4
• Political Sentiment:Including industrial policies
and plans of governments other than
environmental protection/emissions, such as
energy structure, etc.
• Economic Viability (TCO):Including the first
purchase cost, oil and electricity price difference,
maintenance costs and so on.
The Global Off-highway Vehicle Market / June 2019
32
Development in different regions and applications – costs, emissions policies, technological breakthroughs and supporting facilities
Source: Interact Analysis © 2019 Interact Analysis Source: Interact Analysis © 2019 Interact Analysis
Return to ToC
Confidential. © 2019 Interact Analysis. All Rights Reserved.
Comparison of Mainstream Battery Chemistry and Package Type Characteristics
Energy Density
C-Rate
Safety
CostPower Density
Life
Standardization
Chart Title
Passenger Vehicle
Bus
Truck
Off-Highway Vehicle
Two-Wheeler/Trike
Energy Storage System
Consumer Electronics
Importance of Battery Characteristics in Different Applications
Source: Interact Analysis © 2019 Interact Analysis
Energy
Density
C-Rate
Safety
CostPower
Density
Life
Standardiza
tion
Chart Title
LFP
NMC/NCA
LCO
LMO
Comparison of Technical Indicators of Different Battery Chemistry
Source: Interact Analysis © 2019 Interact Analysis
Energy Density
C-Rate
Safety
CostPower
Life
Standardization
Chart Title
Cylindrical
Prismatic
Pouch/Polymer
Comparison of Technical Indicators of Different Package Type
Source: Interact Analysis © 2019 Interact Analysis
The Global Off-highway Vehicle Market / June 2019
33
Choice of battery technology route – no best option, only the most suitable
Return to ToC
Confidential. © 2019 Interact Analysis. All Rights Reserved.
0
100
200
300
400
500
600
700
800
900
1,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Production Capacity(GWh) Capacity Utilisation Rate (%) Average Battery Price (USD/kWh)
Average LIB Price vs. Production Capacity vs. Capacity Ultilization Rate (2013 - 2023E)
Source: Interact Analysis © 2019 Interact Analysis
Key Factors Driving Cost Reduction And Performance Improvement For Lithium-ion Batteries
The Declining Cost of Lithium-ion Batteries
• As can be seen from the bottom left figure, global capacity utilization of lithium-ion
batteries continues to locate below 70% from 2018 to 2023, which is a direct
signal for the further decline of Li-ion battery price.
• At present, the raw material cost (including cathode material, anode material,
separator and electrolyte) still leave enough room for further price reduction of Li-
ion batteries. According to the data released by CATL, in 2018, the cost of raw
materials for its prismatic LFP cell and NCM 523 cell are 40.58 USD/kWh and
63.77 USD/kWh, while the price excluding tax were 149.27 USD/kWh and 162.31
USD/kWh, respectively. Even considering the cost of labor, plant and equipment
depreciation, the margin for cell price decline is still greater than 30%.
• The long-term reduction of battery cost must depend on the improvement of
battery energy density and production efficiency:
1. By increasing the compaction density of electrodes, thinning separators, and
increasing the nickelization of cathode electrodes. This increases the energy density
of batteries and decreases the cost of materials per unit energy.
2. By improving the level of automation in production lines and introducing whole-line
manufacturing equipment to increase production efficiency.
• As the most sensitive application area for battery costs, the electrification process
of electric truck and off-highway vehicles is largely limited by battery price.
According to multiple interviews conducted by Interact Analysis, if the average
battery price drops below 100 USD/kWh, the penetration rate of electrification will
increase rapidly under the premise of policy stimulus and environmental
intervention.
Li-ion Battery Pack Cost
Battery Cell
Material Cost
Production Scale
Average Battery
Capacity
Battery Management
System
Cell Size
Structural Design
Production Equipment
Automation Efficiency
Procurement Mode
The Global Off-highway Vehicle Market / June 2019
34
The average battery price will drop another 30% by 2023, so the penetration rate in price-sensitive applications may soar
Return to ToC
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Hydrogen
The largest or most power intensive off-highway machinery – large excavators, combines, large tractors, etc. – are unlikely to be suitable for electrification using a
battery given the power requirements and length of charging. However, in regions or locations that require machines to be low or zero emission, electrification may
be the only option. To achieve this, hydrogen fuel cells are one obvious choice – they can be refuelled more easily/quickly and provide potentially greater power
density. Volvo and SINTEF have developed prototype machines that use hydrogen.
Serious research and product development is happening in the on-highway and marine markets with regard hydrogen fuel cells. Several truck and bus
manufacturers have developed hydrogen fuel cell vehicles and, in the marine market, trials of very large hydrogen fuel stacks are being conducted to test the
viability for use in large vessels. China is also actively supporting the development of a hydrogen economy, seeing it as a route to advance its ‘made in China’
initiative and also electrify vehicle applications which aren’t suitable for battery electric vehicles.
Opportunities
• Currently, there is a small pool of companies focusing on hydrogen fuel cell development, particularly for the off-highway market. There is an opportunity for
new vendors to enter the market.
• If hydrogen is to be used in off-highway applications, transporting and storing at remote locations needs to be considered. This may require equipment that is
mobile (it can relocated) and hydrogen transport vehicles that can handle difficult terrain. Again, there is an opportunity for companies that can solve this
problem. One solution may be to develop local hydrogen generation (from renewables), but this is expensive and may not be suitable for sites that are
temporary in nature.
The Global Off-highway Vehicle Market / June 2019
35
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Charging Infrastructure (1)
One of the major challenges associated with on-highway electric vehicles – both passenger and commercial – is the provision of adequate charging facilities and
the capacity of both the local and national electrical grid infrastructure to cope with large numbers of vehicles charging at the same time. The off-highway market
is no different; however, it faces the additional challenge that vehicles are often used in locations that are remote and not connected to the grid. Furthermore, in
certain applications – for example, construction – sites may only be temporary.
In the commercial vehicle market, particularly the bus market, vendors of electric buses have found that they need to a sell a ‘solution’ that not only delivers the
buses, but also includes charging infrastructure, grid connection, grid stabilisation and route planning/consultation. This has changed the sales process – and
business model – for these vendors and indicates an opportunity for a vendor to do the same in the off-highway market. Currently, very few off-highway machine
builders or suppliers are focusing on an infrastructure solution, particularly one that caters to the specific needs of off-highway.
• For construction sites, particularly those that may be in place temporarily, the provision of on-site charging is challenging. If the site is remote, hydrogen fuel cell
generators may be required. If the site is in an urban area, the grid connection/stabilisation and charging equipment may need to be ‘mobile’, with the ability to
be ‘lifted out’ and used at another location.
• For larger operators looking to switch to electric machinery, they may require significant support, particularly with operational issues i.e. how to plan charging,
machine use, etc. There is a role for a company to help facilitate the move to electric machinery.
• In remote locations – such as mines – power may need to be provided from a number of sources, potentially all renewable. Provision of these renewables and
of the micro-grid is an opportunity.
The Global Off-highway Vehicle Market / June 2019
36
Confidential. © 2019 Interact Analysis. All Rights Reserved.
Charging Infrastructure (2)
Hydrogen Suppliers & Fuel Cell Electric Vehicle (FCEV) Automakers, Air Liquide, Hyundai, NEL, Nikola Motor, Shell and Toyota have signed a Memorandum of
Understanding (MOU) for hydrogen fuelling components, for the purpose of testing state of the art heavy duty (HD) hydrogen fuelling hardware to assist in
standardization and speed to market for fuel cell electric trucks.
This cross-industry group of both vehicle and infrastructure companies has signed an MOU with the purpose to test pre-commercial 70MPa hydrogen heavy duty
vehicle high flow (H70HF) fuelling hardware for future Class 8 (40 Ton) trucks. The industry group has created specifications for the fuelling nozzle, vehicle
receptacle, dispenser hose and breakaway device components for this HD application for the purpose of developing Request for Proposals to suppliers.
This industry group is requesting notification of suppliers’ intent to participate in a pre-commercial development and test program designed specifically for this
fuelling hardware. The fuelling hardware samples will undergo performance tests in accordance with the appropriate SAE/ISO/CSA industry standards along with
additional aspects for this emerging market.
Amongst all the challenges faced by the nascent hydrogen fuel cell commercial vehicle market, standardisation is an important and often over-looked one. To
facilitate the roll-out of hydrogen fuel cell vehicles it will be necessary to standardise the fuelling infrastructure so that different brands and operators can rely on
the same basic infrastructure.
The benefit for off-highway is that much of the work will be ‘done already’ by the on-highway market and there won’t be need to duplicate effort when it comes to
fuelling infrastructure. That said, it may be beneficial for an off-highway vendor or supplier to join this industry group so that the particular needs of the off-
highway market are heard.
xxxx
37
Industry Group Signs MOU To Develop and Test Hydrogen Fuelling Hardware for Heavy Duty Vehicles
Confidential. © 2019 Interact Analysis. All Rights Reserved.
Charging Infrastructure (3)
AFC Energy, an industrial fuel cell power company, recently announced the successful deployment of CH2ARGETM, the world’s first electric vehicle charger based
on hydrogen fuel-cell technology.
CH2ARGE includes AFC Energy’s small-scale fuel cell connected to an inverter similar to those used by Toyota at its electric vehicle research centre. The inverter
transfers energy created by the fuel cell to a charger. The system is supported by a 48V battery pack to assist with peak power demands. The solution can also be
tailored for both on and off grid applications and scale up as required. The demonstration CH2ARGE system was sized to provide sufficient power to charge two
EVs concurrently at recharging levels 1,2 or 3. The system’s inverters are controlled via AFC Energy’s fuel cell control system which ensures the safe and precise
control of the complete setup. Being integrated into AFC Energy’s control system means that product solutions can be implemented with Smart Charging
capabilities.
xxxx
38
Ability to provide electricity at remote sites of primary interest to off-highway machinery vendors
One of the largest challenges for electrification of the off-highway market is the provision of
charging facilities in remote locations or at temporary sites. Many mines or construction sites
will be located away from grid connections or, particularly for construction sites, only of a
temporary nature. Operating electric machinery in these locations will be challenging without
on-site power generation. The solution from AFC Energy may be a model for future electricity
generation at remote sites.
It’s also worth noting that in late 2018 Taylor Construction Plant (TCP) partnered with
Intelligent Energy to develop a hydrogen fuel cell power generator for on-site power generation
at construction sites. It’s capable of supplying 1000W DC or 5kW with an inverter.
Confidential. © 2019 Interact Analysis. All Rights Reserved.
0
2
4
6
8
10
12
50
55
60
65
70
75
80
2018 2019 2020 2021 2022 2023 2024 2025 2030
Na
tura
l ga
s p
rice
($
/m
mb
tu)
Cru
de
oil p
rice
($
/b
bl)
World Bank Commodity Forecasts, Energy (nominal US dollars)
Crude oil, average ($/bbl)
Natural gas, Europe ($/mmbtu)
Natural gas, US ($/mmbtu)
Natural gas LNG, Japan ($/mmbtu)
• Following the dramatic decline in oil price seen through the 2007-9 financial
crisis, prices have steadily risen but still have exceeded $100/bbl. The
World Bank is forecasting that crude oil prices (and natural gas prices) will,
outside of a significant economic shock, remain relatively constant out to
2030.
• The re-emergence of the US as a major energy producer in the last 10 years
has undoubtedly expanded production capacity and helped to keep energy
prices low.
• If oil prices remain fairly consistent, hybrid and electric technologies are
likely to become more favourable as the cost of batteries and scaled
production fall over the next 5-7 years.
• Overall fuel consumption in automotive is likely to increase as emerging
markets look to purchase new, petrol/diesel cars. However, emission rules
and the growth of hybrid and electric vehicles may dampen demand in
mature markets, lessening the overall impact. This may also help to keep
fuel prices in a ‘steady state’.
XXXX
39
Oil Price ForecastWorld Bank forecasts ‘steady state’ for energy prices out to 2030
Confidential. © 2019 Interact Analysis. All Rights Reserved.
Vehicle Analysis
Confidential. © 2019 Interact Analysis. All Rights Reserved. 41
Excavators (1)Global Excavator Market Overview
The Global Off-highway Vehicle Market / June 2019
• Mini excavator is the largest vehicle segment of the global excavator market, and
its share is forecast to continue increase from 36.6% in 2018 to 40% in 2028, in
unit terms.
• China accounted for 39% of the global excavator market in 2018 in unit terms,
followed by Europe with a share of 22%, and North America 15%.
• China and India saw solid growth in excavator market in the past two years, with
unit shipments increased by nearly 45% and 29% respectively in 2018 over 2017.
Advanced markets like Europe and North America also saw positive demand
growth and unit sales grew by nearly 10% in 2018. However, most regions are
forecast to see a slow down in growth from 2019.
-5%
0%
5%
10%
15%
20%
25%
30%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
CA
GR
Un
it S
hip
me
nt
Mini Excavator (<6t) Small Excavator (6-13t) Medium Excavator (13-30t)
Large Excavator (>30t) Growth Rate
Global Excavator Market (2017-2028)
Source: Interact Analysis © 2019 Interact Analysis
China 39%
Europe
22%
North America
15%
Japan 10%
Rest of Asia 7%
Latin
America 2%
Oceania 1%Middle East & Africa
1%
South Korea 3%Others 14%
Global Excavator Market - Regional Market Share 2018
Source: Interact Analysis © 2019 Interact Analysis
Confidential. © 2019 Interact Analysis. All Rights Reserved.
• Interact Analysis forecasts that electrified excavators will only achieve a
penetration rate of 13% in 2028 of the global excavator market.
• Mini excavators, which operate in urban workplaces close to residential areas, will
be a prime candidate to electrify to meet zero-emission and low noise
requirements in the near future. This category is forecast to have the highest
penetration rate of 17% in 2028. Whilst large excavator is forecast to have the
lowest penetration rate of 8.6% in 2028.
• As excavators have been used in many different applications and environments,
covering a broad range of power ratings, from less than 37kW, to over 225kW, this
category has experimented with various electrification options.
• Due to the zero-emission requirement in cities, mini excavators took the battery
electric route already.
• Medium excavator have used hybrid solutions for many years, strongly driven by
Japanese suppliers like Hitachi / Komatsu / Kobelco; however, it takes over 6 years to
pay back the extra initial cost on hybrid machines. A low TCO benefit plus more
complicated maintenance work has limited acceptance with end-users and, unless an
incentive is given, take up on new equipment is low.
• Large excavators are, typically, used in places where less strict emission standards are
in place, so there is the least motivation to change to electrified vehicles. As an
electric machine tend to be more efficient than their ICE counterparts. In the short
term, tethered is the best solution to get better TCO which has already been adopted
and proven by underground mining machine. This is a cheaper and more reliable
solution than battery solution and might be applied to large excavators which are used
in a relatively static application and have good access to power supply. In the long
wrong, whether full battery solution will enable a lower TCO depends on the
development of battery technology.
42
Excavators (2)Electrification Trend
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Electrified Non-electrified
Global Electrified Excavator Market Penetration
Source: Interact Analysis © 2019 Interact Analysis
Excavators WeightingICE (Diesel,
Bio-fuel)
Mild
Hybrid
Full
Hybrid
Full Battery
Electric
Hydrogen
(Fuel Cell)Others
Initial Cost 14 1 0 0 -1 -2 0
Lifetime Cost (TCO) 14 1 2 2 3 1 3
Performance and Productivity 11 1 1 1 1 1 0
Energy Density 9 1 1 1 -1 0 1
Charging Efficiency 6 1 1 1 0 1 1
Engineering Design / Packaging Impact 6 1 1 1 2 2 1
Reliability 9 1 0 0 2 0 0
Maintenance 9 1 0 0 2 0 0
Safety 5 1 1 1 1 1 1
Infrastructure / technology availability 9 1 1 1 0 -1 1
Environmental Impact 8 1 2 2 3 3 3
Total 100 100 90 90 107 35 101
Confidential. © 2019 Interact Analysis. All Rights Reserved. 43
Excavators (3)Electrification Penetration Rate by Vehicle Type
0%
10%
20%
30%
40%
50%
050,000
100,000150,000200,000250,000300,000350,000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Mini Excavators (<6t)
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
0%
10%
20%
30%
40%
50%
0
50,000
100,000
150,000
200,000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Small Excavators (6-13t)
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
0%
10%
20%
30%
40%
50%
0
50,000
100,000
150,000
200,000
250,000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Medium Excavators (13-30t)
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
0%
10%
20%
30%
40%
50%
15,000
25,000
35,000
45,000
55,000
65,000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Large Excavators (>30t)
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
Electrification Penetration Rate Electrification Penetration Rate
Electrification Penetration RateElectrification Penetration Rate
Confidential. © 2019 Interact Analysis. All Rights Reserved. 44
Loaders (1)Global Loader Market Overview
The Global Off-highway Vehicle Market / June 2019
• Wheeled loader is the largest vehicle segment of the global loader market,
as this vehicle type is more widely used across all regions. China is the
largest regional market for wheeled loader in 2018, accounting for over 50%
of the market.
• North America accounted for over 80% of the global skid-steer loader
market. For backhoe loaders, North America and India are the two largest
regional market, with a market share over 80% when combined.
• Crawler loader is the most niche vehicle segment and has very limited use
in North America and Europe only.
-5%
0%
5%
10%
15%
20%
25%
30%
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
CA
GR
Un
it S
hip
me
nt
Wheeled Loaders Backhoe Loaders Crawler Loaders
Skid-Steer Loaders Growth Rate
Global Loader Market (2017-2028)
Source: Interact Analysis © 2019 Interact Analysis
Wheeled
Loaders
Backhoe
Loaders
Skid-Steer
Loaders
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
China North America Europe Japan South America
India Middle East & Africa Oceania South Korea Rest of Asia
Global Loader Market - Regional Market Share 2018
Source: Interact Analysis © 2019 Interact Analysis
Confidential. © 2019 Interact Analysis. All Rights Reserved.
• Interact Analysis forecasts that electrified loader will only achieve a penetration
rate of 8% in 2028 of the global loader market. Wheeled loaders will be the
earliest to adopt electrification and also the most widely adopted.
• Reducing noise and emissions are two major drivers for the development of
electric wheeled loaders, especially those compact ones that are used in zero-
emission areas or indoors in the U.S. and Europe.
• For compact wheeled loaders, the electrified powertrain technology including
hybrid and full electric is likely to be based on that used in some of the material
handling equipment, such as lift trucks. Similarity between these two vehicle types
includes:
• Might be used in closed or semi-closed environment
• Be used in high-demand application
• Need for system to have less maintenance work
• For other types of loaders with bigger power requirements, although being
used less in city areas with less need for lower emissions and noise, the
push to electrification will be also be driven from the request to improve
efficiency. “Go electric” will lead to a more compact design and a reduction
on the number of hydraulic components used in the system to enable less
power loss, as a result less maintenance work will be required. Lifetime Cost
and Productivity can thus be a key drive for electrification for these
machines.
45
Loaders (2)Electrification Trend
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Electrified Non-electrified
Global Electrified Loader Market Penetration
Source: Interact Analysis © 2019 Interact Analysis
Loaders WeightingICE (Diesel,
Bio-fuel)
Mild
HybridFull Hybrid Full Electric Hydrogen Others
Initial Cost 14 1 0 0 -1 -2 0
Lifetime Cost (TCO) 14 1 2 2 3 1 3
Performance and Productivity 11 1 1 1 1 1 0
Energy Density 9 1 1 1 -1 0 1
Charging Efficiency 6 1 1 1 0 1 1
Engineering Design / Packaging Impact 6 1 1 1 2 2 1
Reliability 9 1 0 0 2 0 0
Maintenance 9 1 0 0 2 0 0
Safety 5 1 1 1 1 1 1
Infrastructure / technology availability 9 1 1 1 0 -1 1
Environmental Impact 8 1 2 2 3 3 3
Total 100 100 90 90 107 35 101
Confidential. © 2019 Interact Analysis. All Rights Reserved. 46
Loaders (3)Electrification Penetration Rate by Vehicle Type
Electrification Penetration Rate Electrification Penetration Rate
Electrification Penetration RateElectrification Penetration Rate
0%
10%
20%
30%
40%
50%
0
50,000
100,000
150,000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Backhoe Loaders
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
0%
10%
20%
30%
40%
50%
0
50,000
100,000
150,000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Skid-steer Loaders
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
0%
10%
20%
30%
40%
50%
0
500
1,000
1,500
2,000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Crawler Loaders
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
0%
10%
20%
30%
40%
50%
80,000
110,000
140,000
170,000
200,000
230,000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Wheeled Loaders
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
Confidential. © 2019 Interact Analysis. All Rights Reserved. 47
Aerial Work Platforms (1)Global Aerial Work Platform Market Overview
The Global Off-highway Vehicle Market / June 2019
• Due to increasing construction spending and solid growth in global adoption
of aerial work platform especially in emerging region like China, the global
AWP market experienced very strong growth in 2018, with unit shipments
growing 22.6% over 2017.
• North America accounted for 55% of the global AWP market in 2018 in unit
terms. Followed by Europe with a share of 24%.
• China saw the strongest growth among all regions analyzed in the report,
AWP units shipped grew by 65.5% in 2018.
Boom Lifts
Scissor Lifts
Tele-
handlers
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
China North America Europe Japan South AmericaIndia Middle East & Africa Oceania South Korea Rest of Asia
Global Aerial Work Platform Market - Regional Market Share 2018
Source: Interact Analysis © 2019 Interact Analysis
0%
5%
10%
15%
20%
25%
30%
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
CA
GR
Un
it S
hip
me
nt
Boom Lifts Scissor Lifts Tele-handlers Growth Rate
Global Aerial Work Platform Market (2017-2028)
Source: Interact Analysis © 2019 Interact Analysis
Confidential. © 2019 Interact Analysis. All Rights Reserved.
• Aerial work platform has had mature electrification solution for many years
already. Electric and hybrid equipment will gain shares in all three categories
continuously.
• Scissor type AWP has the highest electrification penetration rate, 85% in 2018 of
the global Scissor Lift market, and the rate is forecast to increase to 96% towards
the end of the forecast period. The telehandlers category moves the most slowly
towards electrification.
• Although equipment that comply to the latest emission standard naturally being
more expensive, because of the high rental rate, strong replacement demand over
the next few years and proven TCO benefits from the past, part of the “premium
initial cost” can be accepted by rental company because they can take back these
cost in a relatively short period.
• Increase in non-construction application has also driven the growth of electrified
AWPs.
• Hybrid technology is more widely accepted in the AWP market. In contrast to other
construction equipment, AWPs are the most “productive” when stationary, i.e.
allowing construction specialists to complete tasks, resulting in relatively short
periods of activity followed by longer periods of being idle and relatively rare usage
of full installed power during the most challenging terrain conditions. This is the
ideal duty cycle for hybrids, allowing time to recover and recharge the batteries.
48
Aerial Work Platforms (2)Electrification Trend
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Electrified Non-electrified
Global Electrified Aerial Work Platform Market Penetration
Source: Interact Analysis © 2019 Interact Analysis
AWP WeightingICE (Diesel,
Bio-fuel)
Mild
HybridFull Hybrid Full Electric Hydrogen Others
Initial Cost 12 1 2 2 2 -1 0
Lifetime Cost (TCO) 11 1 2 2 2 0 1
Performance and Productivity 12 1 1 1 1 1 1
Energy Density 10 1 1 1 0 1 1
Charging Efficiency 7 1 2 2 2 1 1
Engineering Design / Packaging Impact 6 1 1 1 2 0 1
Reliability 9 1 1 1 1 1 1
Maintenance 9 1 2 2 2 2 0
Safety 5 1 1 1 1 1 1
Infrastructure / technology availability 9 1 1 1 1 -1 1
Environmental Impact 10 1 2 2 3 3 3
Total 100 100 149 149 155 70 99
Confidential. © 2019 Interact Analysis. All Rights Reserved. 49
Aerial Work Platforms (3)Electrification Penetration Rate by Vehicle Type
0%
20%
40%
60%
80%
100%
0
50,000
100,000
150,000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Boom Lifts
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
Electrification Penetration Rate Electrification Penetration Rate
Electrification Penetration Rate
75%
80%
85%
90%
95%
100%
0
50,000
100,000
150,000
200,000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Scissor Lifts
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
0%
20%
40%
60%
80%
100%
0
10,000
20,000
30,000
40,000
50,000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Telehandlers
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
Confidential. © 2019 Interact Analysis. All Rights Reserved.
0%
5%
10%
15%
20%
25%
30%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
CA
GR
Un
it S
hip
me
nts
Class 1 Class 2 Class 3 Class 4&5 Growth Rate
Global Lift Truck Market (2017-2028)
Source: Interact Analysis © 2019 Interact Analysis
The Global Off-highway Vehicle Market / June 2019
50
Lift TrucksGlobal Lift Truck Market Overview
• Driven by e-commerce, warehouses automation and mobile automation, the
global lift truck market have been seeing strong growth over the last few
years. Unit shipments for the global market grew by 14% in 2018, but a slow
down in growth rate since 2019 and will come back to a more normal
growth rates between 4%-5%, especially considering the current global
economic context and uncertainties.
• Class 1, Class 2 and Class 3 lift trucks that are used mainly in warehouse
are forecast to experience faster growth during the forecast period (9.3%,
5.6%, 7.9% respectively), whilst Class 4&5 market will only see a 2% CAGR.
• China accounted for 36% of the global lift truck market in 2018 in unit
terms. Followed by Europe with a share of 31%, and North America 18%.
China
36%
Europe
31%
North America
18%Japan 5%
Rest of Asia 3%
Latin America 3%
Oceania 2%
Middle East & Africa
1%South Korea 1%India 0%
Others 7%
Global Lift Truck Market - Regional Market Share 2018
Source: Interact Analysis © 2019 Interact Analysis
Confidential. © 2019 Interact Analysis. All Rights Reserved.
• Lift trucks are widely used in logistics where the working environments are
often semi-closed or fully-closed spaces. And, because of its high efficiency,
low noise and zero emission characteristics, electrified lift trucks have been
getting increasing popularity, and have the highest electrification rate
among all vehicle types analyzed in this research. The penetration rate was
around 60% in 2017 and is forecast to increase to nearly 75% in 2028.
• From a cost perspective, the vast majority of electric lift trucks now use
lead-acid batteries, although some lift trucks started using lithium-ion
batteries or hydrogen technology. Although lead acid is considered as a cost-
effective battery chemistry that has been used in lift trucks for a long time,
and has almost no worries relating to reliability of the technology and
security of the supply, Lithium-ion do have advantage over lead acid in a
couple of ways including shorter charge time, better power range, higher
energy density etc. With the fast development of lithium-ion battery
technology and fast expansion in production, it is expected that lithium-ion
will take the share of lead acid battery in lift truck area in the coming years.
There will also be new entrants come into this market, such as BYD,
originally a Chinese battery manufacturer, who started to build full electric
lift trucks and already manufactured over 10,000 lift trucks with lithium-ion
batteries in 2018.
• The use of electrified lift trucks will be amplified by the emergence of
autonomous mobile robots from the early 2020s. Detailed annual analysis
and forecasts for the mobile robot industry can be found in our Mobile
Robot Market Report.
51
Electrified Lift Truck Market (1)Electrification Trend
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Electrified Non-electrified
Global Electrified Lift Truck Market Penetration
Source: Interact Analysis © 2019 Interact Analysis
Lift Trucks WeightingICE (Diesel,
Bio-fuel)
Mild
HybridFull Hybrid Full Electric Hydrogen Others
Initial Cost 14 1 0 0 2 -1 0
Lifetime Cost (TCO) 15 1 1 1 2 2 1
Performance and Productivity 10 1 1 1 1 1 1
Energy Density 9 1 1 1 2 2 1
Charging Efficiency 10 1 1 1 2 2 1
Engineering Design / Packaging Impact 2 1 0 0 2 2 1
Reliability 9 1 0 0 2 2 1
Maintenance 9 1 0 0 2 2 0
Safety 5 1 1 1 1 1 1
Infrastructure / technology availability 6 1 1 1 2 1 1
Environmental Impact 11 1 2 2 3 3 2
Total 100 100 77 77 196 148 88
Confidential. © 2019 Interact Analysis. All Rights Reserved.
• Fuel cell technology has also been developed and promoted within this
category. Industrial trucks with fuel cells have seven key advantages:
productivity, low cost, high-performance availability, safe handling, clean
operation, sustainability and low space requirements.
• The reason for the high productivity is that the vehicle can be hydrogenated
in just one to three minutes - compared to the electric competitor's battery
replacement time of 10 to 20 minutes.
• But for now, the limited adoption of fuel cell technology and hydrogen
infrastructure keeps the production cost and transportation cost for
hydrogen extremely high and difficult to be adopted in a large scale. Before
the overall cost of hydrogen system can come down, full electric will be the
main powertrain technology used in lift trucks.
• In Europe, more than 85% of the shipped lift trucks are electrified.
Electrified lift truck occupy more than 60% of the shipped units in North
America and Japan in 2017. Although the electrification penetration rate for
lift trucks in China is lower than the other 3 regions, this market will be
seeing the strongest growth towards electrification.
52
Electrified Lift Truck Market (2)Electrification Trend
585255 645058 707674 710884 725688
8762041016150
12605531492444
19967345435
38805326
12848
62723
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2017 2018 2020 2023 2028
ICE (Diesel, Bio-fuel) Full Electric Hydrogen
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2017 2028 2017 2028 2017 2028 2017 2028
ICE (Diesel, Bio-fuel) Electrified
Regional Lift Truck Market Electrification Trend 2017 vs. 2028
Source: Interact Analysis © 2019 Interact Analysis
North America Europe China Japan
65% - 73%
85% - 87%
41% - 72%
62% - 68%
Confidential. © 2019 Interact Analysis. All Rights Reserved.
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
1,300
1,320
1,340
1,360
1,380
1,400
1,420
1,440
1,460
1,480
1,500
CA
GR
Un
it S
hip
me
nt
Underground LHD Growth Rate
Global Underground LHD Market (2017-2028)
Source: Interact Analysis © 2019 Interact Analysis
The Global Off-highway Vehicle Market / June 2019
53
Underground LHDGlobal Underground LHD Market Overview
• The global mining industry has seen positive growth in the past two years,
which resulted in steady demand growth for mining equipment. And the
share of underground mining is growing faster in terms of material moved
and equipment Capex, than that of surface mining.
• All regions have seen steady growth, whilst demand increase more strongly
in Oceania, South America, Middle East and Africa.
• Growth in equipment demand and unit shipments has been slowing down
since 2nd half 2018, growth forecast for 2019 will be tempered considering
global economic growth uncertainties and its potential impact on mining
demand and CaPEX.
China 18%
Europe
21%
North America
13%Japan 3%
Rest of Asia 9%
Latin America 2%
Oceania 17%
Middle East & Africa
13%
India 4%
Global Underground LHD Market - Regional Market Share 2018
Source: Interact Analysis © 2019 Interact Analysis
Confidential. © 2019 Interact Analysis. All Rights Reserved.
• Zero emissions underground, cleaner air, less noise and less heat are obvious
benefits of switching to electrified vehicles. All this can improve worker morale as
well as productivity.
• The International Council on Mining and Metals plans to minimize the impact of
underground diesel exhaust by 2025, this will push for electrified mining.
• Reducing the use of diesel fuel has obvious cost benefits. About 40% of an
underground mine’s energy outlay is spent on powering gigantic ventilation
systems to remove pollutants from tunnels.
• The two Nordic companies (Sandvik AB and Epiroc AB) who dominate the global
underground mining equipment market are both pushing aggressively to electrify
their underground machines, with Epiroc AB aiming to electrify all its underground
machines within five years. This will accelerate the progress of electrification for
underground LHD.
• The development of underground equipment is becoming more and more digital
and unmanned, due to the rising labor cost, security issue. With the vigorous
development of mining industry, more and more underground mines are gradually
going deeper which is not suitable for personnel. Electrified vehicle will further
improve the level of vehicle digitization and intelligence.
• The way of overhead power supply or towing cable solves the problem of exhaust
gas, but also limits the flexibility of equipment. At the same time, the maintenance
cost of power supply system will increase. Whilst the upfront cost of battery
electric vehicle would be about twice the price of a conventional one, lower fuel
and energy costs will compensate the initial pain.
54
Electrified Underground LHD MarketElectrification Trend
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Electrified Non-electrified
Global Electrified Underground LHD Market Penetration
Source: Interact Analysis © 2019 Interact Analysis
Underground LHD WeightingICE (Diesel,
Bio-fuel)
Mild
HybridFull Hybrid Full Electric Hydrogen Others
Initial Cost 7 1 0 0 -1 -2 0
Lifetime Cost (TCO) 8 1 2 2 3 1 3
Performance and Productivity 10 1 1 1 1 1 0
Energy Density 7 1 1 1 -1 0 1
Charging Efficiency 5 1 1 1 0 1 1
Engineering Design / Packaging Impact 10 1 1 1 2 2 1
Reliability 8 1 0 0 2 0 0
Maintenance 8 1 0 0 2 0 0
Safety 15 1 1 1 1 -1 1
Infrastructure / technology availability 7 1 1 1 1 -1 1
Environmental Impact 15 1 2 2 3 3 3
Total 100 100 100 100 139 52 113
Confidential. © 2019 Interact Analysis. All Rights Reserved.
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
3,100
3,200
3,300
3,400
3,500
3,600
3,700
3,800
3,900
4,000
Off-highway Truck Growth Rate
Global Off-highway Truck Market (2017-2028)
Source: Interact Analysis © 2019 Interact Analysis
Un
it S
hip
men
ts
The Global Off-highway Vehicle Market / June 2019
55
Off-highway TrucksGlobal Off-highway Truck Market Overview
• Demand for mining equipment in 2018 was strong, represented by 6%
growth in Off-highway truck unit shipments. Demand increase is mainly
driven by Oceania, South America, Middle East and Africa.
• Growth in equipment demand and unit shipments has been slowing down
since 2nd half 2018, growth forecast for 2019 will be tempered considering
global economic growth uncertainties and its potential impact on mining
demand and CaPEX.
China 8%
Europe
14%
North America
24%
Rest of Asia 15%
Latin America 3%
Oceania 17%
Middle East & Africa
13%
India 6%
Global Off-highway Truck Market - Regional Market Share 2018
Source: Interact Analysis © 2019 Interact Analysis
Confidential. © 2019 Interact Analysis. All Rights Reserved.
• In contrast to how fast electrification has been progressed with underground
mining, the electrification penetration rate for surface mining is much lower.
Even towards the end of the forecast period, the penetration rate will be less
than 7%.
• The International Council on Mining and Metals also aims to achieve
greenhouse gas-free vehicles for surface mining by 2040. Yet the transition
to electric vehicles still has some way to go.
• Considering the sites where off-highway trucks are typically used, such as
mines far away from the urban area, there is less emission control, and
quite often lack of developed infrastructure to supply electric power. In
addition, both the power density and energy density required from the
vehicle is very high.
• As technology advances, there will be successes in the on-highway sector
regarding the ability to “power” vehicles such as Class 8 trucks, perhaps
with hydrogen fuel cells. There will also be improvements in the reliability
and safety for medium and larger construction vehicles’ electrification. It is
expected to see these technology transfer into the off-highway truck sector.
56
Electrified Off-highway Truck MarketElectrification Trend
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Electrified Non-electrified
Global Electrified Off-highway Truck Market Penetration
Source: Interact Analysis © 2019 Interact Analysis
Off-highway Trucks WeightingICE (Diesel,
Bio-fuel)
Mild
HybridFull Hybrid Full Electric Hydrogen Others
Initial Cost 15 1 0 0 -1 -2 0
Lifetime Cost (TCO) 18 1 2 2 3 3 3
Performance and Productivity 8 1 1 1 1 1 0
Energy Density 7 1 1 1 0 1 1
Charging Efficiency 5 1 1 1 0 1 1
Engineering Design / Packaging Impact 10 1 1 1 2 2 1
Reliability 8 1 0 0 2 1 0
Maintenance 8 1 0 0 2 1 0
Safety 5 1 1 1 1 1 1
Infrastructure / technology availability 8 1 1 1 0 -1 1
Environmental Impact 8 1 2 2 3 3 3
Total 100 100 90 90 116 90 101
Confidential. © 2019 Interact Analysis. All Rights Reserved.
Regional Analysis
Confidential. © 2019 Interact Analysis. All Rights Reserved.
69,547 75,283 76,080 90,262
88,822 90,636 91,275
103,340
97,121
112,339 129,125
127,696
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2017 2018 2023 2028
Excavator Skid-steer Loader Backhoe Loader Crawler Loader
Wheel Loader Bulldozer Off-highway Truck Underground LHD
Boom Lift Scissor Lift Telehandler Lift Truck
Off-highway Vehicle Demand - North Americas
Source: Interact Analysis © 2019 Interact Analysis
The Global Off-highway Vehicle Market / June 2019
58
North America Off-highway Vehicle MarketSales Forecast by Vehicle Type
• North America has the most diversified off-highway vehicle profile, covering
all kinds of light/compact product to heavy product. Lift truck, skid-steer
loader and excavator are the 3 largest segments.
• North American market is the world’s largest market for skid steer loader.
Last year the region accounted for more than 84% of global sales of this
type of machine. It’s also the world’s largest market for backhoe loader,
together with India, these two regions accounted for nearly 82% of global
sales.
• Although being a developed region in off-highway vehicle market, large-scale
earthmoving equipment still sells well and are forecast to remain stable
growth as economy in this region continue to grow at a good pace, keeping
driving new infrastructure projects and high level of construction investment.
• Lift truck is forecast to see the highest CAGR during the forecast period,
growing around 5% annually between 2017 and 2028. Boom lift type of
AWP is also expected to see a similar level of annual growth.
Confidential. © 2019 Interact Analysis. All Rights Reserved.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
North America, 2018, Powertrain
Penetration Rate
ICE (Diesel, Bio-fuel) Mild Hybrid
Full Hybrid Full Electric
Hydrogen Others
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
North America, 2023, Powertrain
Penetration Rate
ICE (Diesel, Bio-fuel) Mild Hybrid
Full Hybrid Full Electric
Hydrogen Others
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
North America, 2028, Powertrain
Penetration Rate
ICE (Diesel, Bio-fuel) Mild Hybrid
Full Hybrid Full Electric
Hydrogen Others
The Global Off-highway Vehicle Market / June 2019
59
North America Powertrain Penetration Rate by Vehicle Application
Confidential. © 2019 Interact Analysis. All Rights Reserved.
• When compared to Europe and China, Interact Analysis predicts the rate at
which battery electric off-highway penetrate the North America market will
be relatively slow. This is partly because of the low diesel prices in this
market which makes battery electric powertrain relatively less attractive in
terms of total cost of ownership compared to diesel counterparts.
• Hybrid penetration rate is higher than that of Europe and China, given the
low diesel prices and the relatively slow shift towards battery electric
technologies, as they help bridge the gap between diesel and battery
electric equipment. However, its further growth will be limited after 2023
when battery electric technology start to get more adoption.
The Global Off-highway Vehicle Market / June 2019
60
North America Off-highway Vehicle MarketElectrification Penetration Rate by Powertrains
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
The North American Off-highway Vehicle Market by Powertrain
Source: Interact Analysis © 2019 Interact Analysis
Confidential. © 2019 Interact Analysis. All Rights Reserved.
103,473 112,190122,851 130,082
20,67223,725
25,65425,910
71,131
77,541
90,709
103,218
0
50,000
100,000
150,000
200,000
250,000
300,000
2017 2018 2023 2028
Excavator Skid-steer Loader Backhoe Loader Crawler Loader
Wheel Loader Bulldozer Off-highway Truck Underground LHD
Boom Lift Scissor Lift Telehandler Lift Truck
Off-highway Vehicle Demand - Europe
Source: Interact Analysis © 2019 Interact Analysis
The Global Off-highway Vehicle Market / June 2019
61
Europe Off-highway Vehicle MarketSales Forecast by Vehicle Type
• 2018 was the strongest year for the European construction equipment
sector since the economic crisis of 2008/2009. Overall sales of off-highway
vehicles on the European market grew by 10.7%, and the absolute market
level is now only 10% below the 2007 peak.
• A slow down in sales is expected for 2019 due to ongoing political and
economic uncertainties.
• Material handling equipment is forecast to see a higher CAGR during the
forecast period. Lift truck is forecast to see the highest CAGR among all
vehicle types analyzed in the report, 4.7%. The structural growth from
increased warehouses and e-commerce is a strong drive behind the growth.
Confidential. © 2019 Interact Analysis. All Rights Reserved.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Europe, 2018, Powertrain
Penetration Rate
ICE (Diesel, Bio-fuel) Mild Hybrid
Full Hybrid Full Electric
Hydrogen Others
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Europe, 2023, Powertrain
Penetration Rate
ICE (Diesel, Bio-fuel) Mild Hybrid
Full Hybrid Full Electric
Hydrogen Others
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Europe, 2028, Powertrain
Penetration Rate
ICE (Diesel, Bio-fuel) Mild Hybrid
Full Hybrid Full Electric
Hydrogen Others
The Global Off-highway Vehicle Market / June 2019
62
Europe Powertrain Penetration Rate by Vehicle Application
Confidential. © 2019 Interact Analysis. All Rights Reserved.
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
The Europe Off-highway Vehicle Market by Powertrain
Source: Interact Analysis © 2019 Interact Analysis
The Global Off-highway Vehicle Market / June 2019
63
Europe Off-highway Vehicle MarketElectrification Penetration Rate by Powertrains
• Europe has the highest electrification penetration rate among all regions,
and their leading position is expected to remain during the whole forecast
period. Interact Analysis forecasts that over 70% of the off-highway vehicles
analyzed in this report will go electrified in Europe in 2028.
• Globally, the overwhelming majority of low emission zones are in Europe,
where much stricter emission standard is proposed. For many of the off-
highway vehicles that are used in city urban areas will be directly impacted.
Equipment like lift trucks that count for a large share of unit shipments and
Scissor type AWP already have over 80% electrification penetrate rate. Many
of the compact vehicles work in these urban areas will also go electrified
very soon following the zero-emission standard.
• Europe is also leading in electrification technology development. For many
of the off-highway vehicle types analyzed in the report, European OEMs have
large share in the market, and their product offering/strategies on
electrification thus have a direct impact on the penetration rate, such as
Sandvik & Epiroc on underground mining equipment, KION & Jungheinrich
on lift truck.
Confidential. © 2019 Interact Analysis. All Rights Reserved.
140,062202,646 228,118 239,636
96,151
107,65095,035 94,908
293,075
316,491313,847
311,986
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2017 2018 2023 2028
Excavator Skid-steer Loader Backhoe Loader Wheel Loader
Bulldozer Off-highway Truck Underground LHD Boom Lift
Scissor Lift Telehandler Lift Truck
Off-highway Vehicle Demand - China
Source: Interact Analysis © 2019 Interact Analysis
The Global Off-highway Vehicle Market / June 2019
64
China Off-highway Vehicle MarketSales Forecast by Vehicle Type
• Lift trucks, excavators and wheeled loaders are the 3 largest segments in
unit shipment terms, all together accounting for 97% of the China off-
highway vehicle market in 2017, but their combined share is forecasts to
drop to 89% in 2028.
• China saw dramatic growth in 2018, with some of the construction vehicle
segments growing over 40% in 2018 over 2017, i.e. bulldozers, excavators.
• Following strong demand in 2018 and 2018, the market growth rate for
China is forecast to slow down significantly since 2019. Material handling
equipment is forecast to have higher CAGR than construction equipment
overall, and mining equipment will have the lowest CAGR. In addition,
company/light equipment will see stronger market growth than heavy
equipment.
• AWP is the segment that is forecast to see highest CAGR 25% during
forecast period. Comparing to other construction vehicle segments which
already turn into a mature development phase, AWP is relatively an
emerging segment in China and just started to get wider adoption.
Confidential. © 2019 Interact Analysis. All Rights Reserved.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
China, 2018, Powertrain Penetration
Rate
ICE (Diesel, Bio-fuel) Mild Hybrid
Full Hybrid Full Electric
Hydrogen Others
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
China, 2023, Powertrain Penetration
Rate
ICE (Diesel, Bio-fuel) Mild Hybrid
Full Hybrid Full Electric
Hydrogen Others
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
China, 2028, Powertrain Penetration
Rate
ICE (Diesel, Bio-fuel) Mild Hybrid
Full Hybrid Full Electric
Hydrogen Others
The Global Off-highway Vehicle Market / June 2019
65
China Powertrain Penetration Rate by Vehicle Application
Confidential. © 2019 Interact Analysis. All Rights Reserved.
The Global Off-highway Vehicle Market / June 2019
66
China Off-highway Vehicle MarketElectrification Penetration Rate by Powertrains
• At present, China is far behind Europe and North America in progression
towards off-highway vehicle electrification. Less than 30% of the off-highway
vehicle analyzed in the report were electrified in 2017. Having said that, this
region is forecast to move the fastest in increasing the electrification
penetration rate, and it is forecast that the rate will be over 55% in 2028.
• Government policy on emission will serve as a strong driver for the
electrification of off-highway vehicles. OENs will be forced to invest in
cleaner vehicles and battery electric commercial vehicles by the upcoming
more stringent emission restrictions China Stage IV, which is aligned with
Tier 4 and Stage IIIB.
• China’s dominant position in battery manufacture and battery technology
development on passenger vehicle as well as commercial vehicles like
buses & trucks, will accelerate battery electric technology transition onto off-
highway vehicles. As a result, hybrid solution is very limited in China, many
local suppliers move straight from diesel engine to R&D in battery electric
powertrain solution.
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ICE (Diesel, Bio-fuel) Mild Hybrid Full Hybrid Full Electric Hydrogen Others
The Chinese Off-highway Vehicle Market by Powertrain
Source: Interact Analysis © 2019 Interact Analysis
Confidential. © 2019 Interact Analysis. All Rights Reserved.
Competitive Landscape Analysis
Confidential. © 2019 Interact Analysis. All Rights Reserved.
The Global Off-highway Vehicle Market / June 2019
68
Excavator Market Overview
• Caterpillar and Komatsu continue their dominant position in the excavator
market, accounting for over 25% of the global market in terms of unit
shipments. And both have strong presence in all regions globally.
• Sany and XCMG, Chinese excavator suppliers, have increased their global
market share in both 2017 and 2018; however, their main focus is China so
their increase in global market share is primarily due to their strong position
within the local Chinese market.
• Whilst the competitive landscape for major regions have been fairly stable
now, there will be changes in share in some of the emerging regions. For
example, India and some of the South East Asian countries have been
dominated by Korean and Japanese suppliers, but there is an increase in
share seen with some Chinese local vendors trying to compete and gain
market share.
Caterpillar 14%
Komatsu
12%
Doosan
8%
Hitachi 9%
Hyndai Construction 6%JCB 3%John Deer 3%
Kobelco 2%
Sany 9%
Volvo 5%
XCMG 4%
Others
25%
Global Excavator Market Share 2018
Source: Interact Analysis © 2019 Interact Analysis
North America Europe China Japan India Indonesia
1 Caterpillar
27.1%
Caterpillar
14.7%
Sany
23.1%
Komatsu
35%
Hyundai
28%
Komatsu
45%
2 Komatsu
21.2%
Volvo
12.6%
Caterpillar
13%
Hitachi
18%
Hitachi
20%
Hitachi
20%
3 John Deere
19%
Komatsu
10.5%
XCMG
11.5%
SCM
17%
Komatsu
15%
Sany
10%
4 Doosan
7.3%
Doosan
7%
Doosan
8%
Kobelco
12%
Sany
10%
Kobelco
5%
5 Volvo
4.9%
Liebherr
6%
Liugong
7%
Sumitomo
5%
Caterpillar
8%
Caterpillar
5%
Others 20.5% 49.2% 38.4% 13% 19% 15%
Confidential. © 2019 Interact Analysis. All Rights Reserved.
14.4%
23.1%
13.3%
13.0%
11.1%
11.5%
10.5%
8.0%
8.9%
7.0%
8.5%
6.6%
6.2%
5.0%
4.5%
4.1%
4.5%
3.6%
3.4%
3.3%
14.7%
14.8%
0% 5% 10% 15% 20% 25%
Others Top 10 Top 9 Top 8 Top 7 Top 6 Top 5 Top 4 Top 3 Top 2 Top 1
Source: Interact Analysis © 2019 Interact Analysis
China Excavator Market Top 10 Supplier Market Share 2010 vs. 2018
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2018
Korea
Japan
EU&US
China
Market Share of Domestic Brands in Excavators (2010 vs.2018)
Source: Interact Analysis © 2019 Interact Analysis
Market Share Change for China Excavator Market - 2010 vs. 2018
The Global Off-highway Vehicle Market / June 2019
69
• Over the past eight years, the market share of China domestic brands has increased from
31.1% in 2010 to 55.6% in 2018. Most of the overseas suppliers have seen a decrease
in their market share. The market share of Japanese and Korean brands has decreased
by 18.5% and 12.8%, respectively. Caterpillar is the only overseas supplier that saw
increase in market share. It can be seen that the competitiveness of Chinese enterprises
has gradually increased. The trend of substitution of foreign brands by local brands will be
further intensified in the future.
• Among domestic brands, SANY's market share has increased most obviously, from about
8.5% in 2010 to about 23.1% in 2018. This is likely to be partly due to its brand strategy.
We believe that in the future, Chinese enterprises will shift from focusing solely on price
and market share to focusing more on the promotion of product competitiveness through
technology accumulation and refinement, as well as the accompanying advantages of
brand effect and scale.
31.1% 55.6%
Others
VOLVO
HYUNDAI
HITACHI
KOMATSU
SDLG
LIUGONG
DOOSAN
XCMG
CATERPILLAR
SANY
Others
LIUGONG
YUCHAI
VOLVO
CATERPILLAR
SANY
KOBELCO
HITACHI
HYUNDAI
DOOSAN
KOMATSU
2018
2010
Confidential. © 2019 Interact Analysis. All Rights Reserved.
• US and European suppliers dominate the global Aerial Work Platform
market. The top 3 leading suppliers - JLG, Terex and Manitou - account for
over 60% of the global market share in terms of unit shipments.
• Competitive landscape by sub-segment of boom lift, scissor lift and tele-
handler look slightly different.
• Skyjack (HQ in Canada) and Dingli (HQ in China) both have a strong presence
only in scissor lift market and have a dominant share in their local region. If in
revenue terms, Dingli’s market share will drop slightly due to its lower average
cost per unit.
• For boom lift and scissor lift market, most of the leading suppliers only cover
the material handling product category, whilst for telehandler market, there are
more players who also cover construction equipment such as JCB and CNH.
• Most of these leading players have a more dominant position in their own
regional market; i.e. Terex and JLG in North America; Manitou, Haulotte and JCB
in Europe.
The Global Off-highway Vehicle Market / June 2019
70
Material Handling Equipment Market OverviewAerial Work Platforms
Manitou 15%
JLG (Oshkosh)
27%
Skyjack (Linarmar)
9%
Genie (Terex) 22%
Dingli 8%
Haulotte 7%
Aichi 3%
Snorkel 2%
Others 7%
Global Aerial Work Platform Market Share 2018
Source: Interact Analysis © 2019 Interact Analysis
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Boom Lift Scissor Lift Tele-handler
Lift Truck Regional Market Share 2018
Source: Interact Analysis © 2019 Interact Analysis
JLGJLGJLG
TerexTerex
Terex
Manitou
Manitou
Manitou Skyjack
DingliJCB
Haulotte
CNHMerlo
OthersOthersOthers
Snorkel
JCB
Snorkel
Confidential. © 2019 Interact Analysis. All Rights Reserved.
• From a unit shipment perspective, the top 8 lift truck suppliers account for
over 70% of the global market.
• The Chinese lift truck market is dominated by local suppliers covering over
80% of the market, in particular the class 4 & Class 5 categories. The top
two leading suppliers, Heli (Anhui Forklift) and Hangcha, accounted for over
40% of the market share in unit shipments. Tshe remaining part of the
market is very fragmented, and international brands compete more within
the electrified forklift market.
• The North America and the European lift truck market are more
concentrated, with the top 3 players accounting for over 80% and over 70%
of the markets respectively.
The Global Off-highway Vehicle Market / June 2019
71
Material Handling Equipment Market OverviewLift Truck
Toyota 17%
Kion
13%
Mitsubishi Logisnext
7%
Jungheinrich 7%Crown 6%
Hyster-Yale 6%
Heli (Anhui Forklift) 8%
Hangcha 7%
Others 29%
Global Lift Truck Market Share 2018
Source: Interact Analysis © 2019 Interact Analysis
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
North America Europe China
Lift Truck Regional Market Share 2018
Source: Interact Analysis © 2019 Interact Analysis
Toyota Toyota
Mitsubishi
Loginext KIONHangcha
Heli (Anhui
Forklift)
Crown
Jungheinrich
Hyster-Yale
Clark
Hyster-Yale Others
OthersOthers
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• Volvo Group has developed electric vehicles for
bus, truck and off-highway applications.
• It has created, in 2018, an internal division
focused on developing emobility solutions for all
vehicle groups.
• In 2018 Volvo Penta, the engine division,
announced that it would develop hybrid and
electric solutions for the industrial and marine
divisions within Volvo.
• Volvo is amongst the most advanced with
regard migrating on-highway electrification to
the off-highway market.
• BYD has a 7+4 strategy to develop electric
machines for 7 on-road vehicles and 4 off-
highway vehicles.
• BYD has created products for all 7 applications.
It has also developed tractor trucks for freight.
For off-road, it has developed a yard tractor and
also has a forklift truck business. For mining
vehicles, it launched a dump truck in 2015
called the BYD V60, but very little information is
available about this product and may have been
a trial. It would be a surprise if, given the
increasing pressure on emissions, particularly in
China, this product didn’t reappear.
• At IAA 2018, FTP highlighted an eAxle concept
and a 48v mild hybrid (fly-wheel) for off-highway.
Also demoed a hydrogen fuel concept on Iveco
stand, believe will be tech of choice for heavy
duty/long haul (battery electric won’t be able to
meet range, hydrogen ICE makes no sense, too
much uncertainty about novel fuel i.e. bio-fuels).
It seems likely there will be a technology
transfer to its off-highway brands.
• Iveco has an electric version of the Daily light
commercial vehicle. It is powered by a Zebra
molten sodium battery.
• Iveco also delivers electric and hybrid buses
through its Heuliez brand.
Eaton Hydraulics
72
Companies Exposed to On- and Off-highway (1)Multiple OEMs and suppliers to the on- and off-highway markets are developing electric solutions
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• Cummins has made a series of acquisitions
over the last 18 months – EDI, the automotive
battery division of Johnson Matthey, Brammo –
to strengthen its hybrid and electric portfolio.
• Cummins has showcased a range of vehicle
solutions at tradeshows globally, often with
attendance from senior leadership.
• As one of the leading providers of diesel
engines to both on- and off-highway
applications, Cummins is aiming to take a
leading role in the transition toward electrified
solutions in both areas.
• DEUTZ has introduced its ‘e-Deutz’ strategy in
2018. It will offer a hybrid solution for use in off-
highway applications.
• Platform introduced at Intermat 2018 using IP
from Torqeedo acquisition and BWM i battery
technology.
• DEUTZ has also exited its Chinese JV and focus
on new alliances in China, one of which is with
the tractor manufacturer YTO. There is a
potential opportunity for DEUTZ’s new hybrid
solutions to be used in China.
• Dana has acquired the drives business of OC
Oerlikon, TM4 (a Canadian hybrid and electric
powertrain company), and Brivini (fluid power)
in the last two years.
• Dana is, like Cummins, broadening its
electrification portfolio.
• It plans to develop several machine types,
include electrified aerial work platforms (AWPs)
Eaton Hydraulics
73
Companies Exposed to On- and Off-highway (2)Multiple OEMs and suppliers to the on- and off-highway markets are developing electric solutions
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Electrification Competitive Analysis (1)
• Scoring for the companies is based on 8 metrics – strategic focus, ability to cross-migrate technology from other divisions, demo products, time-in-market for ‘in
production’, breadth of electrification portfolio, focus on infrastructure, partnerships and acquisitions.
• Scores are based on public announcements and research conducted during this report. Whilst Interact Analysis believes the scores to be reasonably objective,
it must be understood that the scores for each category do not indicate an ‘intensity’. For example, two companies may score equally on ‘strategic focus’ i.e.
both companies have announced a program or division focused on electrification. However, this does not indicate CAPEX, staffing, core focus that each
company has deployed and which may vary substantially.
• Despite this, Interact Analysis believes this analysis is helpful in providing a snapshot of where companies are at now, and provides a simple way of comparing
the approach that different vendors are taking.
The Global Off-highway Vehicle Market / June 2019
74
1-23 ranked companies
Company Name Company Type Corporate HQ Country Overall Score Strategic Focus ScoreTechnology Cross Migration ScoreDemo Product Score Time-in-market Score Portfolio Breadth Score Infrastructure Score Partnership Score Acquisition Score
Cummins Engine/Powertrain US 6.5 1 1 1 0.5 1 0 0 2
Dana Engine/Powertrain/Hydraulics US 6.5 1 1 1 0.5 1 0 0 2
Danfoss Engine/Powertrain/Hydraulics Denmark 6 1 1 1 0.5 0.5 0 0 2
Hitachi Construction Machinery Machine Builder Japan 6 1 0.5 1 1 1 1 0.5 0
Deutz Engine/Powertrain Germany 5.5 1 0 1 0.5 1 0 1 1
Volvo Construction Equipment Machine Builder Sweden 5 1 1 1 0 0.5 1 0.5 0
BYD Machine Builder China 5 1 1 1 1 1 0 0 0
Parker Hannifin Hydraulics US 5 1 0.5 1 1 0.5 0 0 1
Caterpillar Machine Builder US 4.5 0.5 0.5 1 1 0.5 0 1 0
Weichai Power Engine/Powertrain China 4.5 0 1 0 0.5 1 0 2 0
Bosch Engine/Powertrain Germany 4.5 1 1 0.5 0.5 0.5 0.5 0.5 0
Sandvik Machine Builder Sweden 4 1 0 1 1 0 0 0 1
Wacker Neuson Machine Builder Germany 4 1 0 1 1 1 0 0 0
Axletech Engine/Powertrain US 4 1 0 1 1 0.5 0 0.5 0
AVID Technology Engine/Powertrain UK 4 1 0 1 0.5 1 0 0.5 0
ZF Engine/Powertrain Germany 4 1 1 1 0.5 0.5 0 0 0
Volvo Penta Engine/Powertrain Sweden 3.5 1 1 1 0 0.5 0 0 0
Epiroc Machine Builder Sweden 3.5 1 0 1 1 0.5 0 0 0
Genie (Terex) Machine Builder US 3 0.5 0.5 1 0.5 0.5 0 0 0
John Deere Machine Builder US 3 0 1 1 0.5 0.5 0 0 0
JCB Machine Builder UK 3 0.5 0 1 0.5 0.5 0 0.5 0
Komatsu Machine Builder Japan 2.5 0 0 1 1 0.5 0 0 0
Liebherr Machine Builder Germany 2.5 0 0.5 1 0.5 0.5 0 0 0
Confidential. © 2019 Interact Analysis. All Rights Reserved.
Electrification Competitive Analysis (2)
The Global Off-highway Vehicle Market / June 2019
75
24-46 ranked companies
Company Name Company Type Corporate HQ Country Overall Score Strategic Focus ScoreTechnology Cross Migration ScoreDemo Product Score Time-in-market Score Portfolio Breadth Score Infrastructure Score Partnership Score Acquisition Score
Perkins Engines Engine/Powertrain UK 2.5 0.5 0.5 1 0 0.5 0 0 0
Mecalac Machine Builder France 2.5 0.5 0 1 0.5 0.5 0 0 0
Bosch Rexroth Hydraulics Germany 2.5 0.5 1 0.5 0 0.5 0 0 0
Hyundai Construction Machine Builder South Korea 2.5 0 0.5 1 0.5 0 0 0.5 0
Fendt (AGCO) Machine Builder Germany (US) 2 0 0 1 0.5 0.5 0 0 0
Eaton Hydraulics Hydraulics US 2 0 0.5 0 0 0 1 0.5 0
Huddig Machine Builder Sweden 2 0.5 0 0.5 0.5 0.5 0 0 0
Doosan Infracore (inc Bobcat) Machine Builder South Korea 2 0 0.5 1 0 0.5 0 0 0
FPT Engine/Powertrain Italy (Netherlands) 2 0.5 0.5 1 0 0 0 0 0
New Holland Agriculture (CNH) Machine Builder Italy (Netherlands) 1.5 0 0.5 1 0 0 0 0 0
Case Construction (CNH) Machine Builder Italy (Netherlands) 1.5 0 0.5 1 0 0 0 0 0
Kohler Power Engine/Powertrain US 1.5 0 0 1 0 0.5 0 0 0
XCMG Machine Builder China 1.5 0 0 0.5 0.5 0.5 0 0 0
Kubota Engines Engine/Powertrain Japan 1.5 0.5 0 1 0 0 0 0 0
Kubota Construction Machinery Machine Builder Japan 1 0 0 1 0 0 0 0 0
Sany Machine Builder China 1 0 0 1 0 0 0 0 0
BorgWarner Engine/Powertrain US 1 0.5 0.5 0 0 0 0 0 0
Yanmar Engines Engine/Powertrain Japan 1 0 0.5 0.5 0 0 0 0 0
MTU Engine/Powertrain Germany 0.5 0 0.5 0 0 0 0 0 0
New Holland Construction (CNH) Machine Builder US (Netherlands) 0.5 0 0.5 0 0 0 0 0 0
MAN Engines Engine/Powertrain Germany 0.5 0 0.5 0 0 0 0 0 0
Isuzu Engines Engine/Powertrain Japan 0.5 0 0.5 0 0 0 0 0 0
YTO Machine Builder China 0.5 0 0 0.5 0 0 0 0 0
Confidential. © 2019 Interact Analysis. All Rights Reserved.
Electrification Competitive Analysis (3)
• The first takeaway is how broadly the trend to electrification is impacting the off-highway market. A wide variety of companies – machine builders, engine
suppliers, hydraulics vendors and others – are developing strategies, products and capabilities to serve the new market. In essence, the shift to electric
machinery requires a full redesign of the vehicle systems – replacing an engine/transmission, integrated new components, replacing hydraulics – and this is
reconfiguring the competitive landscape.
• What is also clear is how dynamic the market landscape is – Cummins, Dana and Danfoss have made the top of the rankings based largely on activity over the
last two years with a string of acquisitions between them. Interact Analysis expects these rankings to change significantly over coming years as other
companies develop strategies or enhance their product portfolios. The challenge now is about catch-up!
• What is surprising is the dominance of US and European headquartered vendors, particularly given the overall dominance of Japanese and Chinese machine
builders (and particularly given the long heritage of Japanese vendors with hybrid technology). However, in reality, Europe is likely to move quickest to electrified
off-highway machinery so vendors based there or heavily exposed to that market will need to move fast. Although Japanese vendors have significant share in
Europe, they have struggled to sell hybrid technology (not cost effective) and haven’t developed, until recently, their own battery electric machinery.
• What is also clear is that the supply base (primarily engine manufacturers) is taking the lead with regarding electrification. To a degree, the business of selling
diesel engines is most threatened by a move to electric powertrains. However, it is also clear that several machine builders have done very little with regard to
preparing for a shift to electric or hybrid machinery, and this presents an opportunity to provide technology and design expertise.
• Many Chinese machine builders and engine manufacturers have done little to date with regard electrification. In one regard, this is surprising: much of the
passenger and commercial vehicle market has aggressively pursued electric vehicles. However, this is in a framework of intense government funding and
legislation. The same is not true in the off-highway market and, for the time being, is unlikely to be. However, given the growth of low emission cities and the
level of domestic expertise with electric vehicles it would be surprising if more Chinese vendors didn’t develop electric off-highway solutions.
The Global Off-highway Vehicle Market / June 2019
76
Key Takeaways
Confidential. © 2019 Interact Analysis. All Rights Reserved.
Charging Infrastructure
One of the major challenges associated with on-highway electric vehicles – both passenger and commercial – is the provision of adequate charging facilities and
the capacity of both the local and national electrical grid infrastructure to cope with large numbers of vehicles charging at the same time. The off-highway market
is no different; however, it faces the additional challenge that vehicles are often used in locations that are remote and not connected to the grid. Furthermore, in
certain applications – for example, construction – sites may only be temporary.
Opportunities
In the commercial vehicle market, particularly the bus market, vendors of electric buses have found that they need to a sell a ‘solution’ that not only delivers the
buses, but also includes charging infrastructure, grid connection, grid stabilisation and route planning/consultation. This has changed the sales process – and
business model – for these vendors and indicates an opportunity for a vendor to do the same in the off-highway market. Currently, very few off-highway machine
builders or suppliers are focusing on an infrastructure solution, particularly one that caters to the specific needs of off-highway.
• For construction sites, particularly those that may be in place temporarily, the provision of on-site charging is challenging. If the site is remote, hydrogen fuel cell
generators may be required. If the site is in an urban area, the grid connection/stabilisation and charging equipment may need to be ‘mobile’, with the ability to
be ‘lifted out’ and used at another location.
• For larger operators looking to switch to electric machinery, they may require significant support, particularly with operational issues i.e. how to plan charging,
machine use, etc. There is a role for a company to help facilitate the move to electric machinery.
• In remote locations – such as mines – power may need to be provided from a number of sources, potentially all renewable. Provision of these renewables and
of the micro-grid is an opportunity.
Eaton Hydraulics
77
An opportunity for vendors to assert a competitive advantage
Confidential. © 2019 Interact Analysis. All Rights Reserved.
Methodology
Confidential. © 2019 Interact Analysis. All Rights Reserved.
Methodology
Interact Analysis uses a rigorous methodology to produce as accurate a report as possible. For this report, the following was undertaken:
• Face-to-face and telephone interviews with key industry personnel at leading off-highway vehicle companies, engine suppliers, key component (e.g. hydraulic
component) suppliers, distributors and end-users (over 50 interviews).
• Collection of real company data via surveys - which were maintained confidentially – to create a bottom-up model of total industry sizes and market share
analysis. Contributors to this report would be across various stakeholders, include but not limited to the following:
• Off-highway equipment OEM
• Component manufacturers (engine, power transmission, hydraulic component, etc.)
• Association members or respective government bodies
• End-users of off-highway equipment such as mining, real-estate, road construction etc.
• Distributors, financing companies
• Secondary data – use of relevant pubic information from a variety of respected industry sources which include but not limited to the following:
• Government statistics
• Industry associations
• Company annual report, filings, presentations
• ‘Bottom-up’ data model – accurate estimates for companies, regions, applications are made based on reported data. This enables the size of the market to be
estimated at a very granular level.
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Methodology: Primary Research
This report was based on a high volume of primary research, including:
Over 50 in-depth research interviews
• With senior product managers, policy makers, company executives and business development managers
• Acquiring production and deliveries data directly from OEMs and suppliers
• Understanding the technology roadmaps for each OEM. Challenging assumptions
• Understanding company strategies toward e-mobility, autonomy, etc.
• All interviews conducted by Interact Analysis team
• Base year data calculated using the data collected from our primary interviews
Attendance at major trade shows and conferences
• Our team of analysts travelled across the world to all the major trade-shows and conferences (some shown below) to hold additional discussions with
vendors, OEMs and industry players
• We were able to see and investigate new product releases in person
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In addition to the primary research conducted, supplementary secondary (desk) research was used over a period of 3 months:
Press release & public announcement analysis
• Interact Analysis offers an electric commercial vehicles insight service which tracks press releases, quantifies orders and provides a quarterly report with
detailed insight and critical analysis on the current and expected future state of the market. Using this tool, we were able to validate our base year data.
Review and analysis of government statistics
• We validated our bottom-up approach using various government statistics to ensure the volumes matched. Any discrepancies were cross-checked with
vendors during interviews.
The Global Off-highway Vehicle Market / June 2019
Methodology: Secondary Research
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Methodology: Forecasting Model
Model development
• During our interviews, we determined the specific drivers and barriers for each segment and
region/country. Using this information, we modelled the expected penetration rate for each off-
highway vehicle type based on the drivers and barriers for each segment.
• To create the model, we
• quantified the emission regulation impact for each by region/country based on the regulation
detail and phase-in time;
• used a combination of weightings for each vehicle segment based on its specific application
and impact from emission standard;
• finally, we used a combination of weightings for different powertrain technologies used by each
vehicle type, and in such way produces a final penetration rate for the forecast period. The
penetration rate is the percentage of electrified off-highway vehicles out of the total number of
vehicles within a particular segment delivered annually.
• The penetration rate is then applied to the underlying sales forecast to determine the absolute
number of electric vehicles delivered annually for a particular segment.
Model validation
• During our in-depth research interviews, we determined the volumes which each OEM is expecting
to produce in 2019 and 2020.
• We also asked all vendors their expectations for overall penetration rates of electrified off-highway
vehicles in each major region to help sanity check and fine tune our model.
• Lastly, we presented the research participants our top level forecasts for all major regions to
receive feedback.
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Emission
StandardApplication
Mini Excavator (<6t) 5 4 9
Small Excavator (6-13t) 4 4 8
Medium Excavator (13-30t) 3 2 5
Large Excavator (>30t) 2 2 4
Wheeled Loaders 3 3 6
Backhoe Loaders 3 2 5
Crawler Loaders 3 2 5
Skid-Steer Loaders 3 2 5
Bulldozers 2 2 4
Off-highway Trucks 1 1 2
Underground LHD 1 5 6
Boom Lifts 4 5 9
Scissor Lifts 5 5 10
Tele-handlers 3 4 7
Lift Trucks 5 5 10
Lift Trucks WeightingICE (Diesel,
Bio-fuel)
Mild
HybridFull Hybrid Full Electric Hydrogen Others
Initial Cost 14 1 0 0 2 -1 0
Lifetime Cost (TCO) 15 1 1 1 2 2 1
Performance and Productivity 10 1 1 1 1 1 1
Energy Density 9 1 1 1 2 2 1
Charging Efficiency 10 1 1 1 2 2 1
Engineering Design / Packaging Impact 2 1 0 0 2 2 1
Reliability 9 1 0 0 2 2 1
Maintenance 9 1 0 0 2 2 0
Safety 5 1 1 1 1 1 1
Infrastructure / technology availability 6 1 1 1 2 1 1
Environmental Impact 11 1 2 2 3 3 2
Total 100 100 77 77 196 148 88
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Definitions
Confidential. © 2019 Interact Analysis. All Rights Reserved.
Definitions: Off-highway Vehicles (1)
Bulldozers:
• Driver-operated self-propelled heavy machines used for shifting large
amounts of earth, soil, sand, rubble and other debris for leveling the ground.
They comprise a tractor and a metal blade in the front.
Excavators:
• A construction equipment consisting of a boom, dipper (or stick), bucket and
cab on a rotating platform. In the report, it is sub-categorized by size into the
following 4 segments.
• Mini excavators (0-6 tons)
• Small excavators (6-13 tons)
• Medium excavators (13-30 tons)
• Large excavators(>30 tons)
Loaders:
• A heavy equipment machine used in construction to move aside or load
materials such as asphalt, demolition debris, dirt, snow, feed, gravel, logs,
raw minerals, recycled material, rock, sand, woodchips, etc. into or onto
another type of machinery (such as a dump truck, conveyor belt, feed-hopper,
or railroad car). We include the following 4 categories in report.
• Wheeled loaders
• Skid-steer loaders
• Backhoe loaders
• Crawler loaders
Aerial Work Platforms:
• Also known as mobile elevating work platform (MEWP). It is a powered access
equipment used to provide temporary access for people or equipment to
inaccessible areas, usually at height. In this report, we includes boom lifts
(both articulated and straight telescopic booms), scissor lifts and telehandlers.
We exclude low-level equipment (<3m high), telescopic material handlers,
forklifts, cranes, mast climbing work platforms, hoists, vertical masts and
vehicle-mounted AWP.
• Boom Lifts
• Scissor Lifts
• Tele-handlers
Lifting trucks:
• A powered industrial vehicle used to lift and transport materials for short
distances. Also known as forklift truck or forklift.
• Class 1 – electric motor rider trucks
• Class 2 – electric narrow aisle trucks
• Class 3 – electric hand trucks, hand trucks, rider trucks
• Class 4&5 – internal combustion trucks with solid/cushion tires or
pneumatic tires
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Definitions: Off-highway Vehicles (2)
Underground LHD (load, haul, dump machine):
• Underground LHD are similar developed for the toughest of hard rock
mining applications.
Off-highway Trucks:
• Off-highway, rigid dump trucks that are developed specifically for
mining, quarry and construction applications, the Off-Highway Trucks
keep material moving at high volume to lower cost-per ton.
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Definitions: Powertrains
Electrified
• An off-highway vehicle which uses one or more electric motors for part or all of the vehicle’s propulsion. This definition incorporates battery electric, fuel cell electric and
hybrid drivetrains。
Fuel cell electric
• An off-highway vehicle which uses a fuel cell to derive energy from hydrogen and oxygen which in turn powers an electric motor either directly or indirectly using a battery
storage system.
Battery electric
• An off-highway vehicle which uses one or more electric motors for propulsion and derives its energy from a battery which is recharged using an external source of
electrical power.
Hybrid
• An off-highway vehicle which uses one or more electric motors for propulsion along with an alternative power source either in series or in parallel.
• Mild hybrid
• A hybrid system which saves fuel by shutting off the diesel engine to capture mechanical energy when the vehicle is stopped, braking or cruising.
• Full hybrid
• Series hybrid: A hybrid which uses an alternative source of energy to power a generator which in turn charges the batteries. The batteries power the electric motors
which are the single source of propulsion.
• Parallel hybrid: A hybrid which has an electric motor and an additional power source which can both drive the vehicle independently or combine torque.
Others
• An off-highway vehicle which uses other power sources working alongside an engine, could be tethered or cable electric systems, to reduce emissions and improve
efficiency.
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