There has been a lot of talk about the EV (electric vehicle) market in recent days—but where exactly do we stand on the EV construction market? One new report provides some in-depth analysis on whether the market will live or die. Let’s take a look.
To start, we know EVs provide big value to the environment and to the construction industry. These vehicles are often quieter, offer better air quality, and can sometimes be more precise and easier to operate. Still, this only provides value if the total cost of ownership makes sense, right?
Now, one new report from IDTechEx says these vehicles will live or die on their battery pricing. Another challenge is if the machine can last an entire day without needing a charge. IDTechEx’s research shows the average electric vehicle will fall short running a continuous 8-hour day. This can be fixed with fast charging, tethering, or even battery-swapping options.
At the same time, the batteries going into these vehicles are still big. IDTechEx says to get adequate endurance from something like a 23-tonne wheel loader or a 27-tonne excavator, manufacturers are installing battery packs with capacities in the hundreds of MWh, with some stretching as far as 700MWh, the equivalent of nearly 12 Tesla Model 3s.
These batteries are going to be the bulk of the premium of building an electric machine. Even at automotive prices, 700MWh is going to cost around $70,000. The critical question is: will this be repaid in fuel savings and reduced maintenance?
Let’s break the numbers down a little bit further. The analysis in IDTechEx’s report “Electric Vehicles in Construction 2023-2043” shows the average 30-tonne excavator will consume around $18,000 per year in fuel. However, the equivalent electric machine would cost around $9,400 in electricity, a little over half, or a saving of around $8,600 per year. Throughout the vehicle’s lifetime, say 12 years, that’s more than $100,000 saving before maintenance. However, a machine this size will likely need a 350-450kWh battery pack to give adequate endurance. Reaching the right cost per kWh will be essential for making the transition worthwhile.
The report offers many breakdowns and scenarios to consider, but the big takeaway here is to make sure owners and operators start seeing a return on their investment before their vehicles reach end of life. IDTechEx’s report finds battery prices need to fall below $400/kWh. The good news is that OEMs (original equipment manufacturers) should already be able to secure this sort of pricing when scaling to series production of electric construction machines.
IDTechEx predicts it will likely take a couple more years for $300/kWH machines to come to market and a few years after that to get down to $100/kWh, but the future is promising, with huge savings in fuel and maintenance predicted for the future. EVs are certainly one market for the construction industry to keep an eye on in the years ahead.
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