Electrified truck and bus powertrain market revenues to grow 24x in next decade

In News4 MinutesBy NZ Trucking magazineJanuary 29, 2021

Market research company Interact Analysis has released a new report – Electrified Truck and Bus Powertrain Pricing and Architecture – that shows revenues from powertrains will increase from under US$1 billion in 2020, to US$6.8 billion in 2025 and then on to US$22.7 billion in 2030. The report considers the market for all powertrain types in the Europe and North America regions: hybrids, battery electric vehicles, and fuel cell electric vehicles.

Revenues are predicted to be much higher in the second half of the forecast period as more medium and heavy-duty vehicles enter the market. The battery pack will account for over half the total revenue throughout the period for all systems (54% in 2025), but the fuel cell system will start to bring in significant revenues after 2025. For mild hybrids, the transmission occupies a much higher percentage of total revenues.

The average price of the battery pack in 2019, for all powertrain types, was US$8000. This will rise to US$8600 by 2025, defying the usual trend of price reduction as time passes. This is owing to the fact that the average pack size will increase as more medium and heavy duty electric vehicles enter the market and the market becomes less dominated by light vehicles. Conversely, battery packs for pure battery electric vehicles will see a gradual price reduction, from an average of US$13,800 in 2019, through US$11,800 in 2025 to US$10,300 in 2030. This drop reflects the fact that many pure BEVs will be cars and light commercial vehicles, requiring smaller battery packs than large vehicles. 

Fuel cell systems, currently found almost uniquely in buses, cost a hefty US$96,000 in 2020. But the research forecasts a dramatic decline in fuel cell prices out to 2030 (in $/KW) as their application spreads in a range of heavy-duty vehicles. 2030 prices are predicted to average 23% of the 2019 figure – a more dramatic decline than any other component in the report.

While the prices of battery packs and battery-related equipment such as battery management systems will hold up over the forecast period, where the whole powertrain is concerned, there will be a strong decline in prices for all categories of vehicle. 

Jamie Fox, principal analyst at Interact Analysis, says: “Tough competition causes strong price erosion, and machined processes for equipment such as transmissions allow less expensive production when volumes become larger. As an example, the average cost of an eAxle was US$5000 in 2019. This will drop to US$1800 by 2030, even when we take into account the anticipated proliferation of medium and heavy duty vehicles over the time period. 

“So, our research tells us that the average cost of the powertrain for a full electric medium or heavy duty truck will drop from US$105,000 in 2019 to US$50,000 in 2030. Interestingly, however, the overall average price for all categories of vehicle powertrain will stay flat, as these new and exciting technologies lead to more and more heavy vehicles on our roads.”