EV & Mobility Developed 2022 · C6 4 min

Electrification of Off-Highway Vehicles

The electrification of off-highway vehicles is one of the least understood frontiers of the energy transition. Transport moves and lifts the world's people, goods, and raw materials, accounting for around 24 percent of global energy use and close to 30 percent of carbon dioxide emissions. Much of the attention has gone to passenger cars, yet a large share of transport happens off the highway, in mining, construction, agriculture, and ports, where the battery industry has so far served customers poorly.

The Problem: A Sector Left Behind

As on-road transport decarbonises, off-highway machinery becomes a larger slice of the emissions problem. Off-highway vehicles contribute about 18 percent of total carbon emissions and are heavy sources of local pollution, responsible for close to three-quarters of fine particulate matter and a quarter of nitrogen oxides from mobile sources in the United States, with significant shares in Europe and Asia too. These machines span an enormous range, from 5 to 750 horsepower, across many functions and low production volumes. That diversity and decentralisation make it hard to achieve the economies of scale that brought passenger EV costs down. Emissions rules for off-road equipment lag those for on-road trucks and cars, and where they exist they often target particulates and nitrogen oxides rather than carbon dioxide, because ports and construction sites sit near urban and disadvantaged communities where air quality is the pressing concern.

The Approach: Why One Battery Does Not Fit All

The central argument of the case is that off-highway needs cannot be met by simply transferring passenger EV technology. Consumer batteries evolved around range anxiety and charge time, but industrial machines have varied and demanding profiles. Some need high power to move heavy loads, some need energy density to run long shifts, others need fast charging, and all need safety and long life cycle to deliver operational and financial efficiency. These are workhorses judged on total cost of ownership over years of tough duty. Meeting that likely requires specific, tailored battery solutions rather than a single design, which raises the question of whether innovation in this sector can keep pace with mainstream electrification. The case focuses on mining, with its large haul trucks and machinery, as a way to capture the scale of the challenge.

The Findings: Cost, Scale, and Machine Size

Economic viability is the principal barrier. Off-highway equipment is expensive, produced in low volumes, and often lacks the regulatory pull that drives passenger adoption, so demand for innovation stays low. Suitability also depends heavily on machine size and application. Lift trucks are the best-established electrified type today, and small equipment used indoors, such as lift trucks and wheeled loaders, dominates the full-electrification market. Aerial work platforms are forecast to see the fastest growth at a compound annual rate around 9.3 percent. Large equipment such as earthmovers is unlikely to be fully electrified in the foreseeable future, but hybrid systems already cut fuel use by about 30 percent in the near term, with potential toward 50 percent longer term. Overall, the global electrification penetration rate for off-highway vehicles is forecast to rise from 38.7 percent in 2017 to 55 percent by 2028, a substantial opportunity for motor and battery makers. China is the largest market and India is expected to follow closely.

What It Means for the Industry

The drivers for change are more than legislation. Emissions rules act as a stick, but the case stresses that adoption also needs a carrot, the economic and operational benefits that make electrification worthwhile beyond compliance. There is a paradox at the heart of the market: the countries with the worst urban air pollution, notably China and India, would gain most from restricting emissions, yet they are often least able economically to switch to newer technology, which depresses demand for electrified equipment. Infrastructure gaps and the higher upfront cost of low- and zero-emission machines add further friction. For battery suppliers, the message is that the off-highway sector is a real and growing opportunity, but capturing it means connecting closely with end users, tailoring technology to specific duty cycles, and proving value on total cost of ownership rather than assuming passenger-car solutions will transfer.

Key Takeaways

Off-highway vehicles contribute about 18 percent of total carbon emissions and a large share of local particulate and nitrogen oxide pollution.

The sector spans machines from 5 to 750 horsepower in low volumes, undermining the economies of scale that cut passenger EV costs.

One battery technology does not fit all: mining, construction, and agriculture machines have distinct power, energy, and cycle-life needs.

Economic viability and operational limitations are the two largest barriers to full electrification.

Lift trucks lead adoption, aerial work platforms grow fastest near 9.3 percent CAGR, and large earthmovers rely on hybrids for now.

Electrification penetration is forecast to rise from 38.7 percent in 2017 to 55 percent by 2028, led by China and India.

Adoption needs economic incentives alongside legislation, and suppliers must design around total cost of ownership and duty cycle.