Off-Highway Electric Vehicle Market Size, Share, and Growth Forecast for 2025 - 2032

Off-Highway Electric Vehicle Market Size and Trends

The global off-highway electric vehicle market size is likely to be valued at US$ 3.1 Bn in 2025 and is estimated to reach US$ 6.3 Bn by 2032, at a CAGR of 14.5% during the forecast period 2025 - 2032.

According to the International Energy Agency (IEA), various global and regional policies are accelerating EV adoption by targeting demand and supply chains, infrastructure, and ecosystem development. For example, in India, the EV policies in Maharashtra cover toll waivers and tax exemptions on major highways.

The market growth is driven by stringent environmental regulations and emissions reduction targets. Governments worldwide are enforcing tighter emission standards, particularly in sectors such as construction, mining, and agriculture, which heavily rely on diesel-powered machinery. These regulations push companies to adopt electric alternatives to comply with both local and international environmental standards.

The electrification of off-highway heavy-duty vehicles is gaining traction due to its long-term economic and operational benefits. Electric vehicles offer significantly reduced maintenance costs due to fewer moving parts and lesser mechanical wear, translating to lower unplanned downtime and overall operating expenses.

Key Industry Highlights:

• By propulsion, the battery electric vehicle (BEV) segment is projected to lead in 2025, accounting for 65.1% share of the global revenue.
• By battery type, the lead acid battery segment is anticipated to dominate in 2025.
• By application, the agriculture segment is set to grow faster than other segments in 2025.
• The off-highway electric vehicle market in the U.K. is expected to grow at a significant CAGR from 2025 to 2032.
• Market growth is driven by stringent environmental regulations, rising fuel prices, government incentives, and the push for sustainability in sectors like construction, mining, and agriculture.
• Advancements in battery technology, rapid charging infrastructure, autonomous and semi-autonomous operations, regenerative braking systems, and connected vehicle technologies are the major trends.
• Europe dominated the off-highway electric vehicle (OHEV) industry in 2025.

Global Market Attribute	Key Insights
Off-Highway Electric Vehicle Market Size (2025E)	US$ 3.1 Bn
Market Value Forecast (2032F)	US$ 6.3 Bn
Projected Growth (CAGR 2025 to 2032)	14.5%
Historical Market Growth (CAGR 2019 to 2024)	10.5%

Market Dynamics

Driver - Advancements in Battery and Electric Powertrain Technologies

Rapid technological innovations in battery chemistry, power management systems, and electric drivetrains are making off-highway electric vehicles more efficient, reliable, and commercially viable. Lithium-ion batteries now offer greater energy density, faster charging, and longer lifecycles, enabling electric machines to handle demanding tasks with extended uptime. For instance, Komatsu’s electric mini excavators and Bobcat’s E10e are equipped with next-gen batteries that offer up to 4–6 hours of continuous operation with fast recharging capabilities.

Meanwhile, Danfoss Power Solutions and Bosch Rexroth supply highly efficient electric drive systems tailored for harsh off-road environments. These advancements reduce the total cost of ownership by reducing fuel and maintenance expenses. Additionally, modular battery packs and scalable powertrains allow manufacturers to electrify a broader range of equipment without compromising performance, making electric solutions increasingly attractive across off-highway applications.

Restraint - Limited Charging Infrastructure in Remote Areas

One of the major restraints is the lack of charging infrastructure, particularly in remote construction, mining, and agricultural sites where these vehicles are primarily used. Unlike urban EVs, off-highway machines often operate in undeveloped regions with unreliable grid access, making regular charging a logistical challenge. For example, Komatsu and Hitachi Construction Machinery have acknowledged this limitation by introducing hybrid alternatives or machines with portable charging solutions.

Fully electric adoption is still hindered by the need for high-capacity, fast-charging systems that are both mobile and rugged enough for off-grid use. Companies such as JCB have started offering on-site charging trailers, but these solutions are not yet scalable or cost-effective for mass deployment. Without adequate infrastructure support, downtime due to charging delays or battery depletion remains a critical operational risk.

Opportunity - Urbanization and Infrastructure Expansion Create Future Opportunities

Urbanization and infrastructure expansion are major growth drivers due to the rising demand for sustainable construction and industrial machinery in expanding urban areas. As cities grow, infrastructure projects, such as roads, bridges, and commercial buildings increase, boosting the need for efficient, low-emission construction equipment. OHEVs provide a cleaner, quieter alternative to traditional diesel-powered machines, helping industries comply with stringent environmental regulations and reduce their carbon footprint.

Category-wise Analysis

Propulsion Insights

The Battery Electric Vehicle (BEV) segment is projected to lead the accounting for approximately 65.1% share from 2025 to 2032. Advancements in lithium-ion battery technology have enhanced energy density, charging speed, and lifespan, making BEVs more suitable for demanding applications such as construction and mining. BEVs produce zero emissions during operation, aligning with global environmental regulations and sustainability targets, particularly in urban areas focused on reducing air pollution.

BEVs offer lower operational and maintenance costs due to fewer moving parts and reduced servicing needs. A notable development includes the launch of a BEV Dealer Certification Program in March 2024 by Daimler Truck North America (DTNA). The initiative equipped Freightliner dealers to support the growing shift toward electric trucks, ensuring a high-quality customer experience and safe, efficient service infrastructure to meet the increasing demand for battery-electric commercial and off-highway vehicles.

Application Insights

The agriculture segment is anticipated to lead driven by the rising adoption of modern farm machinery in North America and Europe. Farmers are increasingly turning to electric tractors and harvesters to boost productivity, enable automation, and address labor shortages. When compared to traditional internal combustion engines (ICEs), electrification offers significant benefits such as lower emissions, reduced maintenance, and improved efficiency, contributing to more sustainable and profitable operations.

Looking ahead, the construction segment is expected to experience substantial growth from 2025 to 2032. The shift toward electric construction equipment is gaining momentum as fuel prices rise and diesel operating costs remain high. Electric machines offer lower long-term expenses, reduced environmental impact, and compliance with tightening emission regulations. Advancements in battery technology and increasing demand for clean, quiet, and efficient equipment are making electrification a compelling option for construction firms, driving significant growth across this segment.

Regional Insights

Europe Off-Highway Electric Vehicle Market Trends

Europe is set to dominate in the coming years mainly driven by government initiatives promoting clean energy and offering incentives for EV adoption. Heightened environmental concerns and strict emission regulations have accelerated the shift from internal combustion engine (ICE) vehicles to electric alternatives.

The U.K. market is projected to grow at a significant CAGR from 2025 to 2032, supported by the government’s commitment to achieving zero emissions for all new vehicles by 2032. This regulatory clarity is opening new opportunities for off-highway EV manufacturers and encouraging sustainable practices across industries.

Germany is also poised for notable market growth during the same period. As a major force in Europe’s automotive sector and a global leader in vehicle exports, Germany’s focus on e-mobility and strategic policy frameworks has created a supportive ecosystem for off-highway EV development. Both countries play a critical role in reinforcing Europe’s leadership in the electric mobility transition.

North America Off-Highway Electric Vehicle Market Trends

The U.S. off-highway electric vehicle market is experiencing steady growth, fueled by strong federal and state regulatory support aimed at reducing emissions and modernizing infrastructure. Incentives such as tax credits and green procurement policies are accelerating the adoption of electric construction, mining, and agricultural equipment. Rising fuel costs and the push toward sustainability is prompting fleet operators to shift from diesel to electric alternatives.

Technological advancements and increased investments in charging infrastructure and pilot deployments are enhancing market readiness. A notable example is Amsted Automotive’s April 2025 expansion of its U.S. manufacturing operations, introducing new components tailored for the off-highway EV market. With 13 domestic facilities, the company aims to serve its customers more efficiently while reducing costs and tariff exposure. This strategic investment reflects a broader trend of domestic manufacturing growth and innovation in the U.S. off-highway EV space, supporting long-term industry development.

Asia Pacific Off-Highway Electric Vehicle Market Trends

Asia Pacific is projected to reach the highest CAGR in the forecast period. Countries including China, India, and Japan are leading this growth, driven by infrastructure development, increased demand in construction and agriculture, and government efforts to curb emissions and reduce fossil fuel dependency.

China is expected to witness steady growth due to its strong construction and agricultural sectors, extensive charging infrastructure, and the presence of multiple domestic OHEV manufacturers. In India, notable market growth is driven by the agricultural sector’s significant contribution to the economy. Government initiatives promoting e-tractor adoption are playing a key role in this transition.

Japan is expected to register a considerable CAGR, backed by its commitment to environmental sustainability and technological innovation. These factors position the Asia Pacific region as a major growth hub for off-highway electric vehicles in the coming years, contributing significantly to the global shift toward clean mobility.

Competitive Landscape

The global off-highway electric vehicle market is centered on product innovations through the integration of electric powertrains and improving vehicle performance and durability. Companies are actively forging strategic partnerships with battery and component suppliers while increasing investments in research and development. These efforts aim to expand electric offerings across various applications and capitalize on government incentives to accelerate market adoption.

A strong focus is being placed on developing modular vehicle platforms and flexible charging solutions to accommodate diverse operational needs. Another strategic priority is the creation of region-specific models that address local regulatory standards and environmental conditions, particularly in emerging markets.

In addition, manufacturers are incorporating digital technologies such as telematics and remote diagnostics to enhance vehicle performance, monitor usage, and support efficient fleet management. To facilitate the shift from diesel to electric, companies are building comprehensive after-sales support systems and launching training programs, and helping customers adapt to electric platforms with greater confidence, assuring long-term success in the transition.

Key Industry Developments:

• In April 2025, ZAPI GROUP, Technotrans, Moog Construction, and ZQuip showcased a range of innovations targeting the off-highway electric vehicle market, reflecting the industry's shift toward electrification and advanced fleet management. ZAPI introduced the DCC3, a rugged, compact DC/DC converter developed by Inmotion (a ZAPI GROUP company).
• In February 2025, Rivian launched Enhanced Highway Assist, its hands-off highway driver assist feature, allowing drivers to remove their hands from the steering wheel while driving on designated highways.

Companies Covered in Off-Highway Electric Vehicle Market

• Caterpillar Inc.
• CNH Industrial N.V.
• Hitachi Construction Machinery Co., Ltd.
• J C Bamford Excavators Ltd.
• Komatsu Ltd.
• Volvo Construction Equipment AB
• Deere & Company
• Doosan Corporation
• Sandvik AB
• Epiroc AB