2024 has been a pivotal year for zero-emission trucks, including updated emissions regulations for trucks in the EU. In IDTechEx’s new report, “Electric and Fuel Cell Trucks 2025-2045: Technologies, Markets, Forecasts”, the specific requirements are analyzed along with requirements in the US and China.
For all vehicle segments, the adoption of electric vehicles and improvements to drivetrain technology and infrastructure are driven by policy. Historically, heavy-duty trucks have proven difficult to electrify, with the average annual mileage of a truck approximately ten times that of a passenger vehicle, regularly driving hundreds of km a day. 2024 has seen further growth in the global electric truck market, with progressive emissions reductions mandated by governments projected to propel further uptake.
While China dominates the global electric truck market, the EU has established a targeted 90% reduction in average emissions of heavy-duty vehicles by 2040, compared to a baseline measured from July 2019 to June 2020. Intermediate targets have been too, including a 15% reduction in emissions of CO2 (g/tonne-km) by 2025. IDTechEx believes this target is achievable for truck OEMs, especially with each zero-emissions truck counting as two vehicles in emissions calculations in this ‘super-credits’ phase. Furthermore, internal combustion engine (ICE) trucks will have already improved in efficiency due to improved engineering and aerodynamics over this 5-year period, going some way toward reducing emissions already.
In May 2024, the EU revised its original 2030 target (a 30% average emissions reduction from the baseline) to 45% and also included a wider range of heavy-duty vehicles not included in the original policy (6×4 trucks, 8×4 trucks, vocational vehicles, buses, and coaches). The updated policy is a significant milestone in the EU’s decarbonization journey. The new policy covers 92% of heavy-duty vehicles, as reflected in total sales of heavy-duty vehicles in the EU in 2023, putting heavy-duty vehicle regulations more in line with passenger cars in terms of vehicle coverage.
Summary of the EU’s emissions regulations for heavy-duty trucks as of 2024. Source: IDTechEx
From 2025 onwards, the super-credits phase will be replaced by a benchmark credits phase between 2025 and 2029. In this phase, credits are gained for exceeding emissions targets, and for every percentage point above 2% sales share of ZEVs, the threshold average emissions for that year is relaxed by 1%, a maximum reduction of 3% is possible, with a ZEV sales share of 5% for that year. These credits can be used to offset debts accrued in the same period. Potential penalties are significant, with €4,250 charged for every g/tonne-km above the limit for each qualifying vehicle. The benchmark credit system moves away from heavily rewarding early adoption as the market matures while setting a clear target sales share of ZEVs (zero-emissions vehicles) for benefits to be realized. From Q1-Q3 of 2024, the share of ZEVs sold in the heavy-truck market was under 1.2%. While there is no penalty for not meeting the 2% sales share benchmark, IDTechEx believes that with the ramp-up of production volumes and greater model availability, OEMs will be able to hit this target. Volvo Group, selling under the Volvo Trucks and Renault Trucks brands in Europe, would have a headstart, currently holding over 50% of Europe’s electric truck market.
IDTechEx’s analysis indicates that this 45% EU target is ambitious, and will be difficult to achieve by 2030. However, the overall reduction of emissions, the benchmark credit system, and transitionary technologies such as PHEV (plug-in hybrid) and in the shorter term gas-powered trucks (e.g. CNG) could push emissions reductions to the mandated level. IDTechEx is also expecting the medium-duty truck market to electrify faster than heavy-duty vehicles, primarily due to the larger battery requirements and desired use cases, to help meet these requirements.
The Chinese zero-emission truck market is an order of magnitude greater than the European market, but its drivers are very different from those in the US or Europe. Historically, the Chinese market has benefitted through EV subsidies, but even when these ceased in 2023, a thriving market has been left behind. China’s zero-emission truck market comprises numerous domestic OEMs with electrified powertrain technologies. In addition, even without EV purchase subsidies, there is government support for battery swapping stations (a market almost exclusively in China currently), hydrogen refueling stations, charging infrastructure, and scrappage subsidies, where payments of up to the equivalent of US$20,000 are offered to fleet operators to scrap old diesel trucks for newer models. In addition, the National Fuel Consumption Standard specifies the gradual reduction in fuel consumption of ICE heavy-duty vehicles (including trucks), with the latest China VI-b standards applied to heavy-duty vehicles from July 2023.
With over half a million medium and heavy-duty truck sales in 2023, the US has the second-largest addressable market for electric trucks. However, overall electric truck adoption lags behind the EU and China. As of December 2024, 11 US states have adopted the Advanced Clean Trucks (ACT) regulation. Through the accrual of deficits and credits, truck and van sellers with over 500 units in annual sales will need to adopt an increasing percentage of zero-emissions truck sales year-on-year. This, combined with other incentives such as the CARB (Californian Air Resources Board) Voucher Incentive Project, means that IDTechEx forecasts rapid growth of the US electric truck market, from less than 1% of heavy-duty truck sales in 2024, to approximately 60% by 2045, primarily made up of battery-electric trucks, and smaller proportions of fuel cell and plug-in hybrid trucks.
