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Analysis on the trend of small electric and intelligent engineering equipment

 

Why is small excavation a breakthrough point when excavators are electrified?

Some people call 2020 the first year of electrification of construction machinery. After two years of development, the first tier enterprises at home and abroad have successively launched multiple categories and models of electrified construction machinery equipment. However, from the overall sales volume, the current penetration rate of electric engineering machinery products is less than 1%, which is still in its infancy and there is still great room for development in the future. Overall, the electrification of construction machinery products will present the following major directions.

Small equipment first

Small products have a high market share, relatively low technical barriers, and low total purchase costs. Manufacturers often use these types of products to test water electrification, making it easier for users to accept.

New players and new modes

BCG Boston Consulting once pointed out in an article that from the perspective of the entire industry chain, the electrification process of construction machinery will inevitably give birth to many new players and models in the value chain. By then, not only host manufacturers, but also various battery manufacturers and some other new players will enter the game.

Intelligence comes with it

When electrified products take shape and intelligence follows, it will involve communication operators, IoT devices, and even big data and cloud computing, requiring the integration of more software and hardware resources. What would the construction machinery products be like at that time? Expand your imagination, and what you can think of may actually come true by then.

 

 

Some people may say that it’s still far from us, but in fact, it’s not. According to the data statistics of the China Construction Machinery Industry Association, a total of 95 electric loaders were sold from January to February 2022, marking the first time the association has counted the sales of electric loader products.
BCG has also predicted that the Chinese pure electric construction machinery market will reach an explosive point from 2025 to 2026, and by 2035, the penetration rate of pure electric construction machinery may reach 30%.

 

 

Low total cost and relatively higher user acceptance

Referring to the preliminary sales of electric loaders, it was found that their market price is about three times that of ordinary fuel loaders (including supporting equipment such as charging stations). Similarly, the electrification of excavators cannot bypass the obstacle of increasing initial purchase costs.

Users in the construction machinery industry are very sensitive to prices. The cost of batteries is the component with the highest proportion of price growth in electric excavators. Small excavators require smaller batteries and lower prices. Compared to medium and large excavators, the total cost of electrified small excavators is much lower, which can be within the range of some users.

Considering the advantages of later use and maintenance costs of electric excavators, the saved money can effectively cover the initial increase in purchase costs of small excavations. Other studies have shown that as technology matures, battery costs are expected to decrease by 5% to 10% annually. This will also be very beneficial for the breakthrough of small excavation electrification.

Market demand, small excavation accounts for a large proportion of the market

  1. According to data from the China Construction Machinery Industry Association, from 2011 to 2020, the sales of small excavators (note: the association’s data is divided by<18.5t) increased from 82000 units to 177000 units, achieving a blowout growth. The proportion of small excavation in total sales reached a peak of around 65.00% from 2015 to 2016.
  2. In the past three years, the sales of small excavators with a capacity of less than 18.5t have remained stable at around 60% of the total sales of excavators in China.
  3. Mature technology, with higher stability from “oil” to “electricity”
    Another difficulty in achieving electrification of excavators lies in the harsh construction environment, where high vibration intensity and other construction environments require particularly strict requirements for electronic and electrical components such as batteries.
  4. The construction environment for small excavators is more concentrated in cities, villages and towns, and the working conditions are relatively easier for medium and large excavators. The existing mature battery technology can already meet the technical requirements of electric scooters. Various host manufacturers have also launched multiple small electric excavator equipment at major exhibitions.
  5. Application scenarios, sporadic activities, no battery life anxiety

    In fact, many users refuse electric excavators because of range anxiety. Normally, the batteries of medium-sized electric excavators can maintain a working time of 6-8 hours, but this is difficult to meet the needs of users for continuous operation.

  6. However, small excavators rarely face such high-intensity continuous operations, and are more likely to undertake some odd and scattered tasks. Stopping excavation is the norm, and basically charging once is enough to meet the needs of a day.

    When working in confined spaces such as indoor and tunnel environments, the advantages of electric excavators such as no emissions and low noise are more prominent. When working indoors, some models of excavators can also tow the line, let alone worry about “endurance” issues.

  7. History has always been strikingly similar, and the situation faced by the electrification process of construction machinery today is very similar to that of passenger cars more than a decade ago. Will the future growth curve of the electric excavator market exhibit a similar trend to the current electric passenger vehicle market? Going through a slow climbing stage first, as more and more users truly feel the charm of electric excavators, they will enter a blowout period.

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