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NON-ROAD MOBILE ENGINE

AND AFTERTREATMENT
FORECAST
Electrification Briefing

www.kgpauto.com Briefing 5
Non-Road Mobile Machinery and Engine and Aftermarket Forecast Service

Briefing Paper # 5-
Electrification in the Non-Road
James Dorling, Senior Analyst
Global production of diesel powered Non-Road
Mobile Machinery (NRMM) stood at around 3
million units in 2016, with this figure expected
to rise to around 3.25 million units in 2017.
Electrification and hybridisation within the
automotive industry is one of the hottest topics
on the lips of OEMs and suppliers currently. It
is an effective way of conserving energy and
reducing emissions that will undoubtedly play a
large part in the future of the NRMM industry.
The key question is how long will it take, and
what will the technology look like?
Electrification in the automotive industry is not a
new phenomenon, the passenger car market
was producing electrically powered cars as ear-
ly as 1900. However, the NRMM industry had
to wait until 2003 for Hitachi to launch the first
hybrid wheeled loader. The NRMM industry is
unlike any other automotive industry, the varia-
tion in machinery type, engine, load cycle, pow-
er, torque, environment, speed and movement
is unprecedented. In passenger car and com-
mercial vehicles a hybrid or electric system can
be rolled out almost comprehensively across
each given industry with few alternations to the
base system. In the NRMM industry that would
be practically impossible.
Widespread full electrification of the powertrain
in the NRMM industry is not feasible for the
foreseeable future in any significant volume.
However the industry dynamics are suitable for
hybridisation. There are still large challenges to
overcome, Legislative changes are constantly
challenging the industry. Whether it is limiting
emissions from the engine, stipulating work-
place health and safety laws, noise levels and
working hours in urban construction sites. The
challenges are great and ever increasing.
There is increasing pressures from public, cor-
porate and government agencies for a more
environmentally friendly NRMM industry with See our website
the DieselGate Scandal fuelling this fire. for information on:
The complexity and diverse nature of opera-
Regular Services
tions and applications within the NRMM indus-
try means a one-solution fits all approach, that CV Engine and
might work in other automotive industries is not Aftertreatment
applicable here. To balance TCO, ROI, fuel Forecast
consumption, toque and power densities and
other driving attributes of electrification is a
tricky and expensive undertaking. Non-Road Engine and
Aftertreatment
This Briefing Paper outlines the current state of
Forecast
electrification within the NRMM Industry and
presents some of the opportunities and chal-
lenges moving forwards. Analysis of the three
key sectors – Agricultural Machinery, Construc- New Services
tion Equipment and Materials Handling – will Non-Road Mobile
give an insight into an exciting future for elec- Machinery Driveline
trification within the NRMM industry.
Non-Road Mobile
For more information regarding KGPs services Machinery
or more comprehensive analysis of electrifi- Electrification
cation potential within the NRMM Industry,
please see the closing page for contact infor-
mation. Including:
• Technology analysis and cost
• Pricing structures
• Total market worth estimation
• Volume vs value services
• Production and development scenarios.
Agricultural Machinery
Agricultural equipment production globally
reached around 1.9 million units in 2016, this
figure is expected to rise to around 2.2 million
units by 2023.
There are around 37,000 agricultural tractors
produced that are below 56kW in the EU & EF-
TA Region, and around 1.1m units produced

Agricultural Machinery Electrification Suitability Outlook

1-3 Yrs 3-7 Yrs 7+ Yrs  Low Penetration

Small Agricultural Tractors

(<75kW)
   
Agricultural Tractors (75-225kW)   

HHP Agricultural Tractors
(>225kW)   

Harvesters (Combine, Forage)   
Niche Harvesters (Beet, Potato,
 High Penetration
Sugar Cane)
  
Figure 1: AG Machinery Electrification Outlook

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Non-Road Mobile Machinery and Engine and Aftermarket Forecast Service
globally, and with Stage V looming and the ex-
pensive addition of machine development with
an added DPF, electrification in this power
bracket is becoming increasingly attractive.
Moving forwards the electrification potential be-
comes more attractive as farmers look for alter-
native solutions to reduce fuel costs.
Electrification of the PTO is a key trend moving
forwards in the agricultural industry. Beneftis
from instant electrical power and releasing
some load on the engine could reduce fuel con-
sumption up to 15% on some models. Electrifi-
cation of implements will have to go hand in
hand with electrical coupling on the PTO, but
key suppliers are working closely with OEMs to
fill this requirement.
In the current market, electrification develop-
ment costs are extremely high, many OEMs are
more concerned with investing in other cost
cutting or yield increasing technologies, rather
than focusing on electrification.
Battery fitment on the limited space on small
tractors can be troublesome with small chassis
and high load requirements.
• Very immature in terms of adoption of electri-
fication, even in Western markets.
• TCO will not allow for implementation of ex-
pensive technologies that don’t offer suffi-
cient payback across a wide range of uses.
• Early stages of electrification, OEMs are de-
veloping with an eye of future drivers de-
manding a greener agricultural sector.
• John Deere and AGCO have prototype elec-
tric tractors, displayed in 2017. New Holland
demonstrated their fuel cell powered tractor
at Agritechnica.
• Widely varying daily hours require flexibility.
AGCO prototype will only work for 3 hours
under full load.
• Large share of market very cheap, low pow-
ered tractors. Very little potential, demand or
Construction Equipment Electrification Suitability Outlook
1-3 Yrs
Utility Machinery (Telehandlers,
Skid-Steers, Track Loaders)
Compact Construciton Equipment
(<56kW)
Construction Equipment (56-
225kW)
HHP Construction Equipment
(>225kW)
Specialised Mining Equipment
Figure 2: CE Electrification Outlook
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suitable technology from LV/passenger car,
for electrification.
Construction Equipment
Construction equipment production globally
stood at around 760,000 units in 2016, with this See our website
expected to rise to around 945,000 units by for information on:
2023.
Regular Services
The key sectors for electrification in the con-
struction equipment industry are in the low pow- CV Engine and
Aftertreatment
ered (below 56kW) and in the very high pow-
ered, high hour end of the market. Forecast
Below 56kW, there were approximately 270,000
units produced in 2016, with this figure ex- Non-Road Engine and
pected to rise to a total of around 286,000 units Aftertreatment
in 2017, and a further increase to around Forecast
325,000 units by 2023.
Low powered construction equipment has a
greater potential for electrification because of New Services
additional costs of meeting Stage V with added
Non-Road Mobile
DPF, and the requirements for operation in
Machinery Driveline
densely populated areas. Low Emissions Zones
are growing globally, with most major cities em- Non-Road Mobile
ploying some restrictions for passenger cars Machinery
and CV, electrification for specific types of con- Electrification
struction equipment is a progressive step.
High horsepower, very high hour machinery
such as large excavators, wheeled loaders and
dump trucks all have electrified options in the
market now. Often using hybrid and electric
systems that are centred around recovering
wasted energy (swing motor generators) or re-
ducing speed and load on the engine
(electrified wheel motors). The high hour nature
of these machines makes fuel cost more im-
portant than other sub-segments of the CE in-
dustry.
Battery technology is not yet widespread in the
high horsepower end of the market, with many
systems, especially in dump trucks and some
excavators often not using energy storage at
all, but just by reducing the load on the engine
and allowing it to run at constant speed reduces
fuel consumption by up to 15% on some mod-
3-7 Yrs 7+ Yrs
  
  
  
  
  
Non-Road Mobile Machinery and Engine and Aftermarket Forecast Service

els. and is relatively mature. Reducing invest-

ment cost somewhat.
• Similar to Agriculture, immature market.
However with the vilification of diesel en- Materials Handling
gines following DieselGate, pressure is The Materials Handling market is a mature
building on OEMs to offer electric option. market in terms of electrification adoption. The See our website
• Fuel consumption is largely a non-issue for power and torque requirements for a Class 1- for information on:
many buyers with the majority of machinery Class 3 forklift are well suited to size a cheap
battery electric system. Regular Services
below 56kW for the rental market.
Operating times are less of a barrier for small- CV Engine and
• There is a small volume of hybrid drive con- Aftertreatment
er forklifts, easily being able to operate most of
struction equipment produced every year. Forecast
the day on a single charge. Access to suitable
• Strong suitability for Quarrying and Mining charging infrastructure is much easier than
Industries. Alternative to diesel engine for rural agricultural equipment or on-site con-
underground applications to meet various struction equipment. Non-Road Engine and
legislative developments prohibiting harmful Aftertreatment
Hybridisation for materials handling again is Forecast
emissions for underground applications.
much cheaper and easier, being more closely
• High fuel share of TCO for certain applica- aligned to the size and requirements of a small
tions. car – wherein hybrid electric technology has New Services
• Technology suitable for certain applications, been in real-world operation much longer than
Non-Road Mobile
such as hybrid excavators already exists NRMM.
Machinery Driveline
Materials Handling Electrification Suitability Outlook Non-Road Mobile
1-3 Yrs 3-7 Yrs 7+ Yrs Machinery
Electrification
Class 1 Forklift   
Class 2 Forklift   
Class 3 Forklift   
Class 4 Forklift   
Class 5 Forklift   
Port Equipment   
Figure 3: MH Electrification Outlook ogies.
• Mature market, especially in western mar- Drivers:
kets, with much of the Materials Handling
• Enclosed working environments – such as
segment largely electric in certain sectors.
inner-city developments – electrically driven
• As BRIC markets tighten emissions, envi- machinery often required by law in many
ronmental and health and safety legislation, developed countries.
electrification in the Materials Handling seg-
• Improved operational efficiency from electri-
ment is likely to follow.
cal attachments and electrical flow com-
Key Drivers pared with hydraulic pressure.
KGP has calculated the market potential for • CO2 and/or GHG legislation being intro-
electrification in the non-road by analysing var- duced beyond Stage V.
ious key drivers (listed below) in each market.
• Increasingly stringent legislation regarding
Then by looking at the willingness and capabil-
workplace emissions.
ity of OEMs, suppliers, associations and indus-
try bodies to drive investment into electrifica- • Air Quality Indicators and Low Emission
tion. Zones.
For example, it would be prudent to suggest • Noise pollution limits for inner-city operation.
that Indian OEMs are likely to invest much of
their R&D budget in the short to medium term • Added cost of Stage V regulation below
into developing technologies for the tightening 56kW makes electrification makes more
of future emissions legislation, rather than de- financial sense.
veloping electrification or hybridization technol-

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Non-Road Mobile Machinery and Engine and Aftermarket Forecast Service

Call us!
KGP will not be attending any events until after the New Year but please contact us to arrange a
free consultation on Single Client, Multi-Client and Special Reports.
We can also prepare a client specific webinar to introduce our services and provide an industry See our website
overview. for information on:
Early in 2018 both CV and Non-Road segments will be the subject of in-depth studies on electri-
fication and hybridisation, as well as as other alternatives to diesel.
Regular Services
CV Engine and
Briefings Aftertreatment
KGP’s free briefings are published twice per month covering Commercial Vehicle and Non-Road Forecast
Mobile Machinery topics. Forthcoming briefings will include:

• Brexit and the Impact on the CV and NRMM Segments Non-Road Engine and
Aftertreatment
• The Future of NOx, more stringent legislation and advanced aftertreatment?
Forecast
• Hybrid and Electric Commercial Vehicle Trends Part 2

• Hybrid and Electric Non-Road Mobile Machinery Trends Part 2

New Services
References
Non-Road Mobile
• Knibb Gormezano and Partners Q2 2017 Non-Road Engine Market Machinery Driveline
Summary Report:- Click Here Non-Road Mobile
• Off-Highway Research International Database Service Update August Machinery
Electrification
2017 Click Here
KGP’s partner, Off-Highway, Off-Highway Research offers a unique level of international re-
search expertise to the construction, earthmoving, mining, industrial and agricultural equipment
industries. This specialist capability, offered by offices in the UK, China, India, the USA and Ja-
pan is available through a combination of Subscription Services and Private Client Research.
The company is staffed by industry specialists with a wide range of industry, language and con-
sultancy skills, and is supported by a unique database of information. Recent Multi-Client stud-
ies launched by Off-Highway Research include: South Korea Click Here and Global Excavators
Click Here

Contacts
Alex Woodrow Managing Director
alexwoodrow@kgpauto.com
James Dorling Senior Analyst
jamesdorling@kgpauto.com
Paris Kiernan Analyst
pariskiernan@kgpauto.com
Mick Beeson Sales Manager
mickbeeson@kgpauto.com
Knibb, Gormezano and Partners

6 Lancaster Park, Newborough Road, Needwood, Staffordshire, DE13 9PD UK

Disclaimer
Information contained in this document has been obtained by Knibb, Gormezano & Partners
from industry sources believed to be reliable. However, because of the possibility of human or
mechanical error by our sources, Knibb Gormezano does not guarantee the accuracy, adequa-
cy, or completeness of any information and is not responsible for any errors or omissions or for
the results obtained from the use of such information. Copyright Knibb, Gormezano & Partners.

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