Market research firm Interact Analysis has forecast the shift to electrification for the off-highway powertrain market - including forklifts - will continue to be slow with high costs and technical challenges “hampering the way”; yet it is still expected to be valued at USD9.5 billion this year.

Forklifts account for the vast majority of this, with USD7.5 billion in component sales forecast for 2024, according to Interact's report on the "Off Highway Powertrain Market".

This, it says, is the result of high utilisation rates and a well-established presence in electrified powertrains.

“Yet, for other machinery types, particularly telehandlers and wheel loaders, [electrification powertrain] adoption rates remain low, as these vehicles continue to rely heavily on diesel,” Interact continues.

The market research company has forecast 7% growth in electrified off-highway vehicle sales for 2024, lower than previously anticipated and indicating the industry’s transition remains in its early stages.

“While the off-highway powertrain market is advancing towards electrification and it remains a long-term priority for the sector, diesel will continue to dominate for several more years,” the company continues.

“As battery technology improves and OEMs refine their strategies, electrified off-highway vehicles will constitute a far larger segment of the market by 2030, providing new growth opportunities for component vendors and integrators.”

Among the biggest hurdles to electrification are the higher per kilowatt-hour cost than passenger and commercial vehicles, Interact says.

“Battery packs are expected to remain the largest revenue generator in the sector, but an increase in motor and inverter demand is anticipated as larger, higher-power OHVs electrify,” the company states.

Principal analyst at Interact Analysis Jamie Fox adds: “The path to electrification in the off-highway sector is a nuanced journey, driven by both technological advances and economic headwinds”.

“While forklifts and aerial work platforms lead the charge, widespread adoption across larger machinery will take time, hindered by high component costs and limited regulatory pressures,” he continues. “Yet, as battery technology advances and market dynamics shift, the sector is on a steady course toward a more electrified future.”