A report from ResearchAndMarkets says the global electric commercial vehicle market is projected to grow at a CAGR of 39.85% and reach roughly 1.8 million units by the end of 2025.

Some of the major drivers of this market are the need for fuel-efficient and emission-free vehicles and the increasing demand for electric commercial vehicles such as electric trucks in the logistics industry to minimize the additional liability of fuel expenses. Innovations in EV battery capacity, which will enable electric commercial vehicles to carry heavy loads over longer range, can create new revenue generation opportunities. Conversely, limited battery power and longer charging duration are some of the challenges for the electric commercial vehicle market.

The market is segmented by propulsion system, vehicle type, components, range, charging infrastructure, autonomous vehicle and region. The four propulsion systems are battery electric vehicle (BEV), hybrid electric vehicle (HEV), plug-in hybrid electric vehicle (PHEV) and fuel cell electric vehicle (FCEV). BEV accounts for the largest market share in the electric commercial vehicle market, by propulsion, and is estimated to grow with the highest CAGR during the forecast period because of its wide application in several types of vehicles.

The bus segment is estimated to be the fastest growing market, in terms of volume, for electric commercial vehicle, by vehicle, followed by van, pick-up truck and truck. Various government mandates and individual country targets to phase out fossil fuel-based public transportation system and to replace them with electric buses will help the bus market grow over the forecast period.

The above 500 miles range segment of the electric commercial vehicle market is expected to grow the most. In this segment, the market growth will be propelled mostly by bus. The growth is expected with anticipation that most of the electric commercial vehicles produced and sold over the forecast period will be buses.