Static electricity: Don’t expect battery-powered construction equipment market to really take off until 2030s says Roland Berger

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As construction equipment manufacturers put the finishing touches to their plans for eye-catching stands at next month’s Bauma exhibition in Munich, it’s clear that OEMs will be focussing heavily on zero emissions equipment this year.

Volvo Construction Equipment plans to make history at the show by only displaying electric equipment on its stand. Hitachi Construction Machinery promises its largest ever electric excavator lineup comprising nine zero-emissions models – almost a third of the manufacturer’s display. And Komatsu says it will be giving live demonstrations of current machines in production as well as pre-production and concept machines to demonstrate its electric offering.

Yet, despite the marketing pitch, German headquartered consulting firm Roland Berger, says that in reality the firm is seeing a slow down in the pace of electrification.

“We saw significant and very strong, ambitious targets for major OEMS where electrification goes for their compact ranges, where they want to move going forward. And we saw that similarly in the passenger car and the trucking space,” says Martin Weissbart, a partner at and part of the company’s off-highway team in Europe, speaking at a recent webinar on the electrification landscape for off-highway machinery. “[But now] OEMs are stepping a little bit back and really re-evaluating what is the right strategy — [what] decarbonizing and not decarbonizing at all means.”

Although engines for construction machinery are in many ways similar to those of cars and trucks, the ways in which heavy machines – especially articulated dump trucks, motor graders and crawler dozers - are configured and the powertrains required are far more complex and harder to adapt.

“For an OEM, it becomes increasingly difficult to define an engine strategy based on the entire portfolio they’re serving,” he said. “That’s why it needs to be a careful strategy of decarbonization prioritization — what needs and what can be converted from a classically ICE (internal combustion engine) solution toward a decarbonized solution on a [alternative] propulsion type.”

“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 says.

Volvo CE’s EC230 electric - one of the OEM’s exclusively battery-powered lineup of machines at its stand at next month’s Bauma 2025. Photo: Volvo CE

In a report covering the compact track loader, crawler excavator, mini excavators, telescopic handlers, wheeled excavators and wheel loader markets, construction machinery data specialist Off Highway Research predicts that electric equipment sales will reach just 3,000 units a year by 2028 – a market penetration rate of 1%.

By comparison, according to the International Energy Agency (IEA), in on-highway vehicle market, electric cars accounted for around 18% of all cars sold in 2023, up from 14% in 2022 and only 2% five years earlier.

Roland Berger predicts that, driven by innovations from the autos market and elsewhere, sales for compact construction equipment like mini excavators will grow significantly over the next five to ten years.

“The entire ecosystem will evolve and will learn from other segments, and there will be strong collaboration across industries,” Weissbart says.

“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 says. “There will be a significant investment in the electrification environment, he said, with investments in technologies regarding battery and energy management.”

The main driver for this growth, the company predicts, will be that the total cost of ownership (TCO) – the combined costs of purchasing the equipment, operating it and maintaining it – will become cheaper than the overall equivalent for diesel machines.

“We see mini excavators will lead the way of electrification,” Weissbart said. “This is both in Europe as well as the U.S. But the TCO positiveness mostly will come in the early ’30s, in the mid ’30s even.”

For rental companies which tend not to pay for the fuel their customers use, the arguments in favour of total cost of ownership may be a harder sell. Instead, higher acquisition costs continue to act as one of the key barriers preventing the electric-powered construction machinery market taking off, as Weissbart acknowledges.

What are the barriers to electrification?

The other main one, he points to is a shortage of charging infrastructure in many places.

Although many rental companies have installed charging stations in depots and contractors are increasingly able to make use of mainstream on-highway charging points in towns and cities, Weissbart points out that many construction projects are located far away from these,

“[The challenge with infrastructure] is in remote areas where construction and where also mining plays a key role,” he says. “And the integration of the system. These are the key challenges OEMs as well as the end customer is facing that currently put a little bit of a break on the rollout of electrification.”

Hitachi Construction Machinery will unveil its largest ever electric excavator line-up at Bauma 2025. Photo: Hitachi CM

The result of all this, Weissbart says, is that he expects OEMs to invest more heavily in developing hybrid machines.

He says Roland Berger has become increasingly convinced that hybrid solutions offer the overall most attractive option for end users in the construction industry as well as agriculture, mining and forestry.

“We made a study on combined electrification,” he said, using [agricultural] equipment as an example. “It would require a 4-ton trailer for just the battery. So, there you need a different means of decarbonization.”

“On the farm ecosystem, where you have telehandlers, where you might have a homogeneous driving pattern, where you have a use case of around four hours on each machine — for the wheel loader, telehandler and various other aspects — this can be electrified quicker and the TCO will pay out earlier.”

The company also studied the number of patents major OEMs had applied for related to hybrid technologies stretching back to the year 2000 and found that the lion’s share came from just four manufacturers.

“We mapped the volume of patents that are related [to hybrid technology] from 2000, so over the last two decades,” he said. “And you see a significant push from Caterpillar, Komatsu, Hitachi as well as Volvo.”

Nonetheless, despite the rush of announcements at this year’s Bauma, Roland Berger is predicting no great take up of battery powered machines in Europe this year, due in most part to sluggish economic conditions across the entire market.

“It’s obviously the current downcycle of agriculture and construction machinery, which we see also continuing in ’25, especially in Europe,” Weissbart says. “Agriculture and construction will most likely at a minimum move sideways. We see an increase in the market coming in ’26.”