Electric Construction Equipment Market is Growing Rapidly Due to Environmental Concerns

The electric construction equipment market has seen significant growth over the past decade. Construction equipment refers to machinery used for the construction, renovation, and demolition of structures and buildings. These include excavators, loaders, dump trucks, dozers, and cranes. Conventionally, these equipment utilized diesel and gasoline engines as their primary power source. However, growing concerns around air and noise pollution from internal combustion engines have led to the development of electric alternatives. Electric construction machines are powered by rechargeable battery packs, providing zero exhaust emission. They are lighter, more fuel-efficient, and quieter compared to traditional diesel variants. The adoption of electric construction equipment helps construction sites meet stringent emissions norms and gain acceptance from environmentally conscious communities.

The electric construction equipment market is estimated to be valued at USD 12.75 Bn in 2024 and is expected to reach USD 56.04 Bn by 2031, growing at a compound annual growth rate (CAGR) of 23.55% from 2024 to 2031.


Key Takeaways

Key players operating in the electric construction equipment are Caterpillar, Komatsu Ltd., Hitachi Construction Machinery, Volvo Construction Equipment, and XCMG Group.

Rapid urbanization and infrastructure development across emerging economies are fueling the demand for construction machinery. The construction industry's focus on sustainability is propelling the Electric Construction Equipment Market growth.

With supportive government policies and initiatives promoting clean construction, major manufacturers are expanding their electric equipment portfolio and distribution globally. Strategic partnerships and collaborations allow companies to enter new markets and deliver industry-leading electric solutions.

Market key trends

Lithium-ion battery technology is seeing widespread adoption in electric construction equipment. Lithium-ion packs provide higher energy density, longer run-times, and faster charging compared to other batteries. Leading manufacturers are custom-designing lithium-ion systems suited for the duty cycles and power requirements of different electric equipment. Advances in lithium-ion chemistries would further bolster the performance and adoption of electric construction machinery.

Porter’s Analysis

Threat of new entrants: New entrants face high capital requirements in construction equipment. Established brands have strong brand image and customer loyalty.

Bargaining power of buyers: Buyers have high bargaining power given the availability of substitutes and price comparison using internet. They can negotiate on price and demand additional features.

Bargaining power of suppliers: Few large multinational corporations dominate the supply of key components like engines, electronics and hydraulic systems. This gives them substantial bargaining power over OEMs.

Threat of new substitutes: Construction equipment needs to continuously innovate and expand service offerings to deter competition from new energy and technology driven substitutes.

Competitive rivalry: Intense competition among few large global players keeping prices and profits under pressure. Focus on service and rental businesses to gain market share.

The electric construction equipment market is highly concentrated in North America and Europe, where supportive infrastructure and regulations encourage greater electrification in construction. These regions together accounted for over 60% of the global market value in 2021.

The Asia Pacific region is expected to be the fastest growing market during the forecast period, led by government incentives and initiatives to adopt cleaner equipment for sustainable development. Countries like China and India are actively promoting electric vehicles for commercial uses through public procurement programs and investments in charging infrastructure.

Geographical Regions

The electric construction equipment market is highly concentrated in North America and Europe, where supportive infrastructure and regulations encourage greater electrification in construction. These regions together accounted for over 60% of the global market value in 2021.

The Asia Pacific region is expected to be the fastest growing market during the forecast period, led by government incentives and initiatives to adopt cleaner equipment for sustainable development. Countries like China and India are actively promoting electric vehicles for commercial uses through public procurement programs and investments in charging infrastructure.

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Author Bio:

Alice Mutum is a seasoned senior content editor at Coherent Market Insights, leveraging extensive expertise gained from her previous role as a content writer. With seven years in content development, Alice masterfully employs SEO best practices and cutting-edge digital marketing strategies to craft high-ranking, impactful content. As an editor, she meticulously ensures flawless grammar and punctuation, precise data accuracy, and perfect alignment with audience needs in every research report. Alice's dedication to excellence and her strategic approach to content make her an invaluable asset in the world of market insights.

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