Commercial Vehicle Market Trends

Growth Drivers

• Shift toward zero-emission vehicles: The goal of achieving net-zero carbon emissions by 2050 has led to the use of electric and hydrogen-powered commercial vehicles. For instance, in October 2024, Volvo Buses unveiled plans to increase its electric bus range in Europe and plans to manufacture the buses from 2025. This change is due to the government's encouragement and increasing awareness of the environmental impact that drives fleet operators to seek more environmentally friendly solutions. Also, progress in battery technology and charging infrastructure is speeding up the shift to zero-emission vehicles, which makes sustainable mobility more available for operators.
• Technological innovations in autonomous vehicles: Self-automated technologies are gradually being introduced into the commercial vehicles market. In November 2024, Caterpillar Inc. proved the fully autonomous operation of its Cat 777 off-highway truck in quarry and aggregates industries. These developments cut down on costs and enhance safety, hence giving manufacturers a competitive advantage. In addition, collaboration between technology companies and automotive companies is driving innovation to address the increasing need for high-performance and dependable autonomous vehicles in industrial settings.
• Global infrastructure development: The growing population and development of new infrastructures across the globe are contributing to the expansion of the commercial vehicles market. In August 2024, VE Commercial Vehicles Ltd. presented new generation buses at PRAWAAS 4.0 in India to meet the new transport needs. The expansion of the market is being driven by investments in public transport infrastructure and logistics networks. In addition, smart cities and the development of road networks funded by the government have led to a high demand for new-generation trucks and buses to boost the growth of the commercial vehicles market.

Challenges

• Infrastructure limitations for alternative propulsion: While there are increasing numbers of electric and hydrogen-powered cars on the roads, charging and refueling stations are still lacking. The lack of fast charging infrastructure and hydrogen refueling stations also poses challenges to the operational use of these vehicles, especially for long distance and intercity transport. In 2024, 25 percent of the planned hydrogen refueling stations across the globe were still in the pipeline, which reveals the existing difference between the demand and the available infrastructures. This challenge is further exacerbated by the fact that the construction and operation of these facilities are capital intensive thus slowing the development of other power systems.
• Stringent emission regulations: Adherence to the continuously developing global emission standards is a problem for manufacturers, especially in areas with diverse legal systems. Standards like Euro 7 and California’s Advanced Clean Truck (ACT) rules require considerable improvements in technology and thus raise production costs and complexity. According to the International Council on Clean Transportation (ICCT) study in January 2024, it is estimated that achieving the emission standards for the global market means that the manufacturers have to spend 15-20% of their annual R&D budget on compliance-related activities. Furthermore, there is no standardization of the systems across the regions, which leads to different vehicle models across the world.