By 2030, we’re expecting approximately 150k battery powered vehicles to be sold in the off-highway space (excluding forklifts, boom lifts, and scissor lifts). In our view, 2030 could represent an inflection point for electrification in off-highway as it is the date many off-highway OEMs have set for achieving various emissions-related sustainability goals. From 2030 onwards, we expect the market for these vehicles to expand more rapidly, says Blake Griffin, Research Manager, Interact Analysis.

The electrification of the powertrain is viewed as an inevitability by most of those involved in the off-highway vehicle space. However, opinions regarding the extent of electrification reach, the timing, and the means to electrify; vary greatly depending on who you ask. Opinions become even more convoluted when discussing the impact that powertrain electrification is likely to have on the working functions of a vehicle.

Changes to the hydraulic system (often the least efficient system on an off-highway vehicle) are viewed by many vehicle OEMs as necessary to achieve electrification ambitions. These changes range from the installation of more efficient hydraulic components to full hydraulic replacement, and the suitability of each potential solution is determined by factors such as the size of the vehicle and the number of working functions.

In our view, future hydraulic system architectures amidst powertrain electrification can be grouped into three categories:

• Electrified powertrain coupled with a centralised hydraulic system

• Electrified powertrain coupled with a decentralised hydraulic system

• Electrified powertrain with complete hydraulic replacement

We’ve spent several months hosting interviews with hydraulic suppliers and vehicle OEMs alike to gather opinions on the suitability of each of these as vehicles become increasingly electrified. This insight will weigh the pros and cons of each, and offer an opinion on the suitability of each of these systems within future off-highway vehicles.

During the interviews conducted with hydraulic vendors and vehicle OEMs, it became clear that the trend toward electrification would hover and influence nearly every discussion point. Many hydraulics suppliers are fearful of electrification as they view it as an existential threat to the market, while others are embracing it as an opportunity to innovate and differentiate. In this context, we want to first express our perspective on how quickly the electrification trend is approaching in the off-highway space.

Below is a forecast we’ve derived based on conversations with vehicle OEMS, the timing of public announcements from vehicle suppliers, and proposed legislation expected to drive electrification. This forecast is part of a broader study we conduct annually on the off-highway vehicle market.

Penetration of battery electric powertrains in off-highway applications. Forklifts and aerial work platforms are excluded from these numbers.

• Tractors

• Combine harvesters

• Full tree forestry system

• Cut-to-length forestry system

• Telehandlers

• Forklifts

• Boom lifts

• Scissor lifts

• Cranes

• Crawler loaders

• Crawler dozers

• Excavators

• Wheeled loaders

• Backhoe loaders

• CTL/skid-steer loaders

• Asphalt finishers

• Motor graders

• Rollers

• Cement mixer trucks

• Commercial Dump Trucks

• Haul/dump truck

• Underground LHDs

• Mining shovels

It should be noted that forklifts and various aerial work platforms are excluded from this figure (these tend to have the highest electrification rates currently).

The first thing you will likely notice, is the limited adoption of electrified off-highway vehicles through 2030. It’s true that while there has been a lot of discussion surrounding electrification for the last decade, the actual adoption of electrified off-highway vehicles remains limited. A combination of factors has led to slow adoption including battery limitations (both in terms of performance and cost), as well as a generally conservative approach by off-highway OEMs towards implementing significant changes within their vehicles.

By 2030, we’re expecting approximately 150k battery powered vehicles to be sold in the off-highway space (excluding forklifts, boom lifts, and scissor lifts). In our view, 2030 could represent an inflection point for electrification in off-highway as it is the date many off-highway OEMs have set for achieving various emissions-related sustainability goals. From 2030 onwards, we expect the market for these vehicles to expand more rapidly.

As electrification approaches, there’s a large question looming over mobile hydraulic vendors regarding which direction to take their portfolios to support these changes. As mentioned, we expect the market for mobile hydraulics to move in three separate directions:

The largest gains vehicle OEMs will see from a sustainability perspective come when the vehicle becomes electrified. In certain cases, when this shift is made, it is unlikely that the hydraulic architecture within the vehicle system will change dramatically. Under a centralised architecture, there will be one or a few centralised pumps driving fluid throughout the system to the working functions. Within certain vehicles, this design just makes practical sense. It is the most cost-effective from a production standpoint, and represents the least amount of risk associated with system redesign.

This system requires the least amount of redesign from a vehicle OEM perspective, but it does not address the efficiency issues that arise when utilising a traditional hydraulic architecture. Under this architecture, the losses resulting from the hydraulic system remain large. As a result, it becomes difficult to electrify large vehicles or those with a high number of working functions due to limitations on the battery side of the equation.

1. Most Cost-Effective Solution (from production standpoint)

2. Legacy System i.e. thoroughly vetted/tested. Represents the current status quo which is perceived largely to be less risky from a design perspective.

3. Well suited for tractor applications which need to support non-standard implement systems. Maintaining a legacy hydraulic system in this case can make integrating with 3rd party implement systems more feasible.

1. The least efficient system of the three being considered.

2. Still requires a trained fluid power engineer for maintenance.

3. Becomes less efficient as the number of axes in a system increases.

In this architecture, the working functions of a machine are independently controlled. Take an excavator for example; the three main working functions include a boom, arm, and a bucket. Each will require different pressures to operate optimally. Under a decentralised hydraulic system, each working function would have its own electric motor, pump, and cylinder controlling the movements.

1. Significantly more efficient than a centralised system. Higher efficiency of the hydraulic system means an extension of the battery life on a vehicle which is a key barrier to electrification.

2. Is a middle ground between electromechanical actuation and a centralised hydraulic system.

3. Retains the benefits of fluid power physics i.e. power density & shock absorption.

1. Adds weight to the overall system in most cases due to the number of electric motors required.

2. Represents a fairly significant design change which goes against the conservative instincts of vehicle OEMs.

Likely the most worrying for hydraulics suppliers, is hydraulic replacement. Vehicle OEMs have already been trialling vehicles with complete hydraulic replacement. These tend to be machines on the smaller-end of the spectrum which are used more heavily in urban atmospheres. For example, loaders have been observed as some of the first vehicle types on the market with complete hydraulic replacements.

In 2022, Doosan Bobcat partnered with Moog Construction to produce an all-electric compact tracked loader. The result, the bobcat T7X, represents one of the first vehicles to come to market that is completely electric i.e. no hydraulics at all. We believe adoption of the vehicle is still low given the price point has come in substantially above its non-electric alternative. Despite the low adoption, this development gives the market a window into which vehicles can reasonably handle hydraulic replacement.

1. Hydraulic replacement eliminates a messy hydraulic system in favor of one that is more harmonious with an electric powertrain. This can serve to simplify overall system design.

2. Future proofing the machine to allow for more sophisticated feature sets. Under a fully electric system, a vehicle OEM has a much greater ability to make incremental changes to its machine without completely redesigning the system.

1. Limited ceiling of applicability due to battery technology constraints. Currently, only low-power applications are suitable, and practical limitations to electromechanical actuators may limit the prospects for hydraulic replacement in machines of higher power.

The size of electromechanical actuators is prohibitively large when you get above ~15-ton machines.

2. Hydraulic cylinders can act as shock absorbers thanks to the physics of fluid power. This is not the case with electromechanical actuators. Although engineers have found ways of compensating for this in the design of these actuators, there are still questions regarding performance in the field as a result.

3. The economics of hydraulic replacement are still difficult to justify. We estimate electromechanical actuators can be more than twice the cost of their fluid power counterparts.

There is room for each of these architectures within the off-highway landscape. We expect over time, a mix of these approaches will emerge and the choice to go with one over another will ultimately be a function of the unique requirements of the vehicle. In any case, we believe the hydraulics market is currently at an inflection point.

With vehicle design changes often taking 3-5 years or more to test and bring to market, the 2030 timeline for sustainability goals that many off-highway OEMs have communicated is rapidly approaching. These design changes will begin occurring at an increasing rate, and when the hydraulic system remains intact, it will be looked upon as a ‘low hanging fruit’ to reduce losses in the overall vehicle. This inflection point will be an opportunity for mobile hydraulic vendors to differentiate themselves from each other on the basis of efficiency which is increasingly valued at a premium.

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