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IDTechEx Asks if COVID-19 Will Accelerate the Shift Towards Electric Light Commercial Vehicles

The COVID-19 pandemic has forced shoppers online, driving huge demand for home delivery. Moreover, growth has the potential to resume beyond the pandemic: in addition to consumer goods, the genie is out the bottle for home grocery delivery, which many consumers, having experienced it for the first time, will want to continue. Light commercial vehicles (LCVs) are the backbone of this growing demand for delivery infrastructure.

There are negatives: the lockdowns, alongside the financial implications of tackling COVID-19, have had a negative impact on commercial vehicle sales. The European Automobile Manufacturers Association recently reported that, overall, the new LCV market in Europe contracted by 36.4% in the first five months of 2020. As price sensitivity increases, the higher upfront price of electric vehicles puts them at a greater disadvantage.

At IDTechEx, we argue that the pandemic will have caused a profound shift towards home delivery and will provide a long-term boost to eCommerce post lockdown, supporting a rebound in sales. Restrictions on movement and the resulting decrease in road traffic have seen air pollution levels fall dramatically in cities around the world. This has provided demonstrable evidence to policymakers of the benefit for urban environments when internal combustion engine vehicles do not run and puts wind in the sales of electric vehicle OEMs.

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In May 2020, Volvo CEO Håkan Samuelsson also suggested that he believes the pandemic will accelerate the move to electric vehicles and that government support to promote the industry should prioritize this sector rather than subsidizing old technologies.

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Indeed, electrification roadmaps are unlikely to change: OEMs are under pressure to keep to vehicle emissions targets, and have already invested in electric powertrain development as discussed in the comprehensive IDTechEx report “Electric Light Commercial Vehicles 2020-2030”. A key driver is falling battery prices, which brings a stronger TCO advantage for light commercial vehicles (versus cars) which typically run more continuously throughout the day and therefore benefit from greater fuel savings. Cars tend to sit on driveways or workplace car parks the majority of the day.

One common problem is range anxiety. However, evidence suggests that the daily range requirements can already be met with current eLCV technologies, and for fleets operating around a central hub, charging strategies can be devised that optimize the vehicle battery size. Whilst range anxiety may be a concern for car owners, this should not be the case for commercial fleet operators. Their concern should instead be choosing the vehicle that reliably meets their daily duty cycle requirements, whilst not carrying unnecessary battery weight that impacts on the vehicle’s kWh/km efficiency and operational cost.

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With a slew of new electric van models set to hit the market in Europe in 2020, including the Mercedes eSprinter, Citroen e-Dispatch, Toyota Proace, and Vauxhall Vivaro-e, fleet operators will now have a wider pool of zero on-road emission LCVs to choose from, helping add to the building momentum.

The IDTechEx market forecast report, “Electric Light Commercial Vehicles 2020-2030”, provides a 10-year outlook for the developing eLCV market in ChinaEurope, the US, and the rest of the world. With background detail on players, technologies, and TCO considerations this report is designed to give companies across the value chain the information they need to make informed strategic business decisions.

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