A British research company has completed an in depth report on the global commercial vehicle sector, with a particular focus on the battery electric and hybrid market and conmcluded that more than 10 million battery electric buses and trucks will be sold around the world.

Interact Analysis completed its latest report recently and reports that after a severe COVID-induced setback in 2020, the industry is predicted to make a swift recovery in 2021.

The report revealed that ‘hybridisation’ is the favoured solution for most long-distance vehicles; while full electric is preferred for city buses and last-mile delivery vehicles.

After a 7 per cent decline in the market for battery-electric commercial vehicles in 2020, which was the continuation of a decline in 2019, largely due to Chinese subsidy policies, the sector will bounce back in 2021.

Interact Analysis said that though sales dipped from 168,000 in 2019 to around 156,000 in 2020, the projected global sales figure for 2021 stands at around 231,000 units – a stunning 47 per cent growth for the sector.

This was driven by growth in Europe and North America, along with the extension of China’s EV subsidy program which was meant to come to an end in 2020.

The report indicates  that the Asia Pacific (APAC) will be streets ahead in 2021, surpassing the 2019 global figure with more than  171,000 sales. Interact says that Europe will be second in this league table, with a projected 44,000 new electric vehicle registrations in 2021. The total truck and bus market (battery-electric, fuel cell, hybrid and diesel) will decline by 16 per cent in 2020 but will see 15 per cent growth in 2021 the report says.

Interact Analysis forecasts that electrified powertrains – hybrid, fuel cell and battery electric – will account for more than 2.5 million annual registrations of commercial vehicles by 2030, out of a total of over 20 million.

Battery electric powertrains are predicted to make serious inroads in the city bus and light duty vehicle sectors, notably last-mile delivery vehicles, reflecting the anticipated lasting boom in online-shopping caused by the pandemic. Inter-city bus fleets and long-haul trucks where pure battery electric is not always a viable option are predicted to see an increasing use of fuel cell technology.

The latest policy developments in China, signalling a relaxation in green rules to stimulate production, indicate that hybrid technologies will have a strong role in the region. Targets indicate that by 2030 New Energy Vehicles (battery electric or fuel-cell electric) should account for 30 per cent of new sales in China while hybrids should account for 75 per cent of ‘traditional energy’ vehicles. The impact on the medium and heavy-duty commercial vehicle market could be significant.

Rueben Scriven, Senior Analyst at Interact Analysis, said that the world isn’t  there yet with full electric powertrains for heavy duty commercial vehicles, and that it may not be for some time.

“As a result we predict that hybrid solutions will come to the fore in APAC, partly due to new regulations in China, whilst in Europe, OEM fleet CO2 emissions regulations, which have to be reduced 15per cent  by 2025 in the EU, will likely push mild hybridisation in heavy-duty applications,” he said.

“California, along with several other US states, is mandating OEMs to sell a certain number of zero emission commercial vehicles. This will disincentivise OEMs to sell hybrids as these vehicles may cannibalise zero emission vehicle sales,”  he added.

Over the last two years, Interact Analysis has developed a rigorous forecasting methodology for researching commercial vehicle electrification. The company says it has developed a sophisticated total cost of ownership (TCO) model in collaboration with leading tier 1 suppliers and OEMs which is used to calculate the comparative TCO advantage of an electric commercial vehicle relative to a diesel equivalent.

The company says that this report is the most detailed and best researched of its kind and should be considered a critical asset to navigate the electrified commercial vehicle market. Interact Analysis has invested significant time and resources in interviewing leading OEMs, suppliers, start-ups, fleets, and others to give the most up-to-date and thorough assessment of the main trends.