Stringent regulations are pushing OEMs to make impressive innovations in machinery, but as Construction Briefing noted in an article published last year, it comes at a cost. 

Sales of electric machines, for example, are still very slow, despite concerted efforts by OEMs to launch and publicise new electric machines 鈥� of which there are expected to be plenty more at Bauma in Munich, Germany, next month.

At Bauma Munich Volvo CE will only be displaying electric models, including the EC230 Electric

That is because, in western markets at least, diesel machines鈥� total cost of ownership (TCO) is still considerably lower than their electric counterparts.

But there could eventually come a tipping point where the TCO of electric machines moves into positive territory.

When might that be? During a recent webinar discussing the current and future state of off highway equipment electrification, experts from global consulting firm Roland Berger gave their view.

鈥淸TCO is] not only based on the vehicle costs but also the operational costs, the maintenance costs,鈥� said Martin Weissbart, a principal for Roland Berger. 鈥淪o, electricity prices in various regions will drive significant TCO next to penalties 鈥� regulation pushes 鈥� from the government.鈥�

Many categories of smaller, lower-horsepower electrified construction equipment from China, including small wheel loaders and telehandlers, are already showing positive TCO.

鈥淲e see mini excavators will lead the way of electrification,鈥� Weissbart said. 鈥淭his is both in Europe as well as the U.S.鈥�

But Roland Berger still expects it to take until 2028-2030 before all-electric mini excavators and medium- and larger- sized battery electric vehicles are generally TCO positive, depending on fuel prices.

Caterpillar鈥檚 first fully electric wheel loader - CAT 906e (Photo: Zeppelin Rental)

Larger mining battery electric vehicles could take until 2029-2032.

For larger vehicles requiring more horsepower, such as mining trucks, Weissbart noted ongoing pilots, adding that the regulatory environment will drive positive TCO.

鈥淔or example, in Australia, there鈥檚 a very good environment for TCO-positivity for mining trucks or rigid haul trucks already coming in the early 鈥�30s,鈥� he said.

However, Weissbart acknowledged that electrification is not an ideal solution for all off-highway equipment. Articulated dump trucks, motor graders and crawler dozers will be more challenging to electrify.

鈥淭he larger vehicles with the larger horsepower requirements 鈥� 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鈥檙e operating in,鈥� he said.

Other headwinds

Off-highway electric vehicle and equipment adoption faces other headwinds, Weissbart noted.

Among those are the tough economic conditions that Europe continues to experience. 鈥淚t鈥檚 obviously the current downcycle of agriculture and construction machinery, which we see also continuing in 2025, especially in Europe,鈥� Weissbart said. 鈥淎griculture and construction will most likely at a minimum move sideways. We see an increase in the market coming in 2026.鈥�

The construction industry also still lacks the charging infrastructure it needs for a significant increase in the usage of battery electric machines. Weissbart added that isn鈥檛 necessarily about centralised depot-charging infrastructure, such as that used by rental agencies, or applications that can capitalize upon other on-highway charging points used for electric passenger or commercial vehicles.

That鈥檚 because construction and mining operations, which often find themselves in remote areas, also need mobile charging and that requirement is slowing down the rollout of electrification.

Bridging technology gaps

The fact that electrification is not moving as quickly as might originally have been anticipated means that other bridging technologies will be needed to decarbonise the construction industry.

鈥淲e saw significant and very strong, ambitious targets for major OEMS where electrification goes for their compact ranges, where they want to move going forward,鈥� Weissbart said.

XCMG XGA20H hybrid boom lift

鈥淎nd we saw that similarly in the passenger car and the trucking space. OEMs are stepping a little bit back and really reevaluating what is the right strategy 鈥� [what] decarbonising and not decarbonising at all means.鈥�

Weissbart noted that hybrid technology can be used in the drivetrain, such as in the case of e-motor integration with internal combustion engines, either in parallel or series, to improve fuel efficiency and emissions. Motion systems and auxiliary systems are also excellent targets for electrification.

鈥淚f it鈥檚 for example a swing drive, an oil pump, HVAC systems where we see more used cases for electrification to reduce emission as well as diesel consumption,鈥� Weissbart said.

Hybrid solutions are appropriate across the board for a wide variety of vertical markets, including mining, construction, agriculture and forestry. According to Weissbart, they make it possible to decarbonise particularly challenging applications while accelerating positive TCO.

OEMs large and small across all off-highway equipment vertical markets are driving the trend in hybrid solutions, Weissbart said. Among those, he noted four OEMs in particular driving the trend.

鈥淲e mapped the volume of patents that are related [to hybrid technology] from 2000,鈥� he said. 鈥淎nd you see a significant push from Caterpillar, Komatsu, Hitachi as well as Volvo.鈥�

2025 and beyond

This year and into the future, Weissbart said he expected hybrid and fully electric offerings to co-exist, which means a more complex portfolio of engine offerings.

鈥淓lectrification 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,鈥� he added

Significant investment in the electrification will continue, he said, with investments in technologies regarding battery and energy management.

鈥淭he entire ecosystem will evolve and will learn from other segments, and there will be strong collaboration across industries,鈥� Weissbart said.