In a rapidly evolving construction landscape, stringent regulations are driving original equipment manufacturers (OEMs) to innovate at an impressive pace. However, as highlighted by Construction Briefing last year, this innovation comes at a cost. Despite concerted efforts by OEMs to launch and publicize new electric machines, sales remain sluggish. This trend is particularly evident in Western markets, where the total cost of ownership (TCO) for diesel machines still undercuts that of their electric counterparts.
This dynamic is set to take center stage at Bauma Munich next month, where Volvo CE will exclusively showcase electric models, including the EC230 Electric. The event promises to be a bellwether for the industry, offering insights into the future of electric construction machinery.
During a recent webinar, experts from global consulting firm Roland Berger weighed in on the future of off-highway equipment electrification. Martin Weissbart, a principal for Roland Berger, emphasized that TCO is not merely about vehicle costs but also encompasses operational and maintenance expenses. “Electricity prices in various regions will drive significant TCO next to penalties — regulation pushes — from the government,” he noted.
Interestingly, smaller, lower-horsepower electrified construction equipment from China, such as small wheel loaders and telehandlers, are already showing positive TCO. Weissbart predicts that mini excavators will lead the electrification charge, both in Europe and the U.S. However, Roland Berger estimates that it will take until 2028-2030 before all-electric mini excavators and medium- to larger-sized battery electric vehicles achieve general TCO positivity, depending on fuel prices. Larger mining battery electric vehicles could take until 2029-2032.
Weissbart acknowledged that electrification is not a one-size-fits-all solution. Larger vehicles with higher horsepower requirements, such as articulated dump trucks, motor graders, and crawler dozers, present more significant challenges. “The larger vehicles with the larger horsepower requirements — they need other alternatives and the broader spectrum of powertrain solutions that help, not only to operate but also to cater to the use cases they’re operating in,” he said.
Beyond the technical challenges, economic conditions and infrastructure limitations also pose hurdles. Weissbart highlighted the current economic downturn in Europe, predicting that the agriculture and construction machinery market will likely remain stagnant until 2025, with a potential uptick in 2026. The lack of charging infrastructure, particularly in remote construction and mining operations, is another significant barrier to the widespread adoption of battery electric machines.
Given these challenges, bridging technologies will be crucial for decarbonizing the construction industry. Hybrid technology, for instance, can be integrated into drivetrains, motion systems, and auxiliary systems to improve fuel efficiency and reduce emissions. Weissbart noted that hybrid solutions are suitable for various vertical markets, including mining, construction, agriculture, and forestry. These solutions can accelerate positive TCO and decarbonize particularly challenging applications.
Looking ahead, Weissbart expects hybrid and fully electric offerings to co-exist, leading to a more complex portfolio of engine offerings. “Electrification in compact machinery is something that will drive going forward, especially in Europe and America in the mini excavators and the smaller wheel loader segment,” he said. Significant investment in electrification technologies, particularly in battery and energy management, will continue. “The entire ecosystem will evolve and will learn from other segments, and there will be strong collaboration across industries,” Weissbart concluded.
This shifting landscape presents both challenges and opportunities for the construction industry. As OEMs navigate the complexities of electrification, the sector is poised for significant transformation. The question remains: how will these developments shape the future of construction, and what role will innovation play in achieving sustainability goals? The stage is set for a thought-provoking debate on the intersection of technology, regulation, and economic realities in driving the construction industry forward.