In recent years, the penetration of electric heavy trucks has accelerated. By October 2024, the penetration rate has exceeded 11%, and the total benefits over a 9-year lifecycle are about 15% higher than diesel trucks.
Smart Financial APP learned that Huachuang Securities released research reports stating that the penetration of electric heavy trucks has accelerated in recent years. By October 2024, the penetration rate has exceeded 11%, with a total benefits over a 9-year lifecycle approximately 15% higher than diesel trucks. Policies such as comprehensive electrification of public sector vehicles, incentives for replacing old vehicles with new ones, and purchase tax exemptions are expected to drive the penetration rate to 25% within 2-3 years. It is expected that domestic sales of electric heavy trucks in 2024 will be 0.066 million units, an increase of 1.2 times year-on-year, with a penetration rate of 11%. By 2027, sales are expected to reach 0.174 million units, with a penetration rate of 25%, a 4-year CAGR of 55%, corresponding to market spaces of 36 billion yuan, 89 billion yuan, and 140 billion yuan in 2030, offering nearly 3-4 times the current market growth potential.
Huachuang Securities' main views are as follows:
The resurgence of electric heavy trucks, achieving another doubling of growth in 2024.
New energy heavy trucks include pure electric, plug-in hybrid, and fuel cell heavy trucks, with pure electric heavy trucks accounting for about 90% of new energy heavy trucks, mostly used in closed scenarios and short-distance shuttle. The switch to National V emission standards in 2021 was the starting point for the acceleration of electric heavy trucks. With sales of 0.023 million units in 2022, a year-on-year increase of 135%, and boosted by policy support and lower terminal prices in 2024, electric heavy truck sales reached 0.053 million units in the first ten months, a 151% year-on-year increase. The penetration rate reached 11%, already surpassing 17% monthly.
The market share of 'new forces' carmakers is dominant, but traditional leading companies are catching up quickly.
In 2022, among the top five new energy heavy truck manufacturers, only Dongfeng, a traditional heavy truck company, made the list, while the other four – Sany, Far East, XCMG, and Yutong – collectively accounted for 49% of the market share. By October 2024, Sany and XCMG still held the top two spots, but traditional companies such as Jiefang, Sinotruk, Shacman, Dongfeng, and Beiqi Foton all made it into the top 8, with a combined market share of 43%. Leading new players maintain strong competition in the current market due to their first-mover advantage, but traditional companies are quickly catching up thanks to advantages in distribution channels. It is expected that competition in the field of new energy heavy trucks will intensify in the future.
Economic efficiency is the foundation, and policy guidelines create a short-to-medium-term ceiling.
The total lifecycle cost of electric heavy trucks is about 30% less than diesel vehicles. With the improvement of charging technology, the average recharging time for electric heavy trucks has been significantly reduced from about 1 hour in the past, while swapping the battery for electric trucks takes 7-8 minutes. However, the large investment required for setting up battery swapping stations has affected the further penetration of battery-swapping electric trucks. It is expected that in the future, charging electric trucks will become the mainstream. By comparing and calculating the total lifecycle costs of renting, purchasing battery models of electric heavy trucks, natural gas heavy trucks, and diesel heavy trucks over a 9-year period, it is found that the cost of renting and purchasing battery models is 14% and 31% lower respectively than diesel heavy trucks.
The penetration rate of electric heavy trucks is expected to reach 25% within 2-3 years. National-level policies such as the comprehensive electrification of public sector vehicles, and tax incentives continue to drive the increase in the penetration rate of electric heavy trucks. The 2024 policy of replacing old vehicles with new ones has a significant stimulating effect on new energy demand, with a maximum subsidy of 0.14 million yuan for each scrapped and newly purchased electric heavy truck. In the months of September and October when policies gradually issued to local levels, the penetration rate of electric heavy trucks achieved a historical high of more than 17%, demonstrating the significant stimulating effect of the replacement policy.
According to Kearney, heavy-duty sanitation/cleaning vehicles, short-distance transportation at construction sites and highways, and regional transportation account for a combined share of about 41% in the heavy truck sector. These three usage scenarios are already/suitable for the promotion of electric heavy trucks. Huachuang Securities predicts that within 2-3 years, the penetration rates of electric heavy trucks in the above three scenarios are expected to reach 80%, 70%, and 20%, respectively, which correspond to an overall electrification rate of nearly 25% in the entire heavy truck industry. However, to achieve a penetration rate of 30% or even higher, it may still require technological innovations such as batteries.
The electric heavy truck market is expected to have a CAGR close to 50% in the next 4 years, with a potential development space by 2030 three to four times the current level. Taking into account factors such as heavy truck industry sales, electric penetration rate, and prices, the estimated market size of electric heavy trucks in 2023 is about 20 billion yuan, close to 90 billion yuan by 2027, with a CAGR close to 50%, and a market size of 140 billion yuan by 2030, offering nearly three to four times the current market space.
At the current point in time, reviewing the past two years and comparing two time points: Demand: lower than expected in 2023, but not significantly different from the original expectations in 2024; Policies: from the end of vehicle purchase subsidies to the policy of replacing old vehicles with new ones; End-user prices: significantly decreased; Applicable scenarios: from closed scenarios to short-distance transportation; Recharging methods: from battery swapping to charging; Competitive landscape: from dominance by new forces to traditional vehicle companies also entering the top.
Regarding investment targets: in the vehicle segment, it is recommended to focus on Sany Heavy Industry (600031.SH), Yutong Heavy Industries (600817.SH), as well as traditional vehicle manufacturers Sinotruk (000951.SZ), FAW Jiefang Group (000800.SZ), Beiqi Foton Motor (600166.SH), Dongfeng Group (00489), and Weichai Power (000338.SZ); in the component segment, it is recommended to pay attention to Shijiazhuang Tonhe Electronics Technologies (300491.SZ) and Zhuhai Enpower Electric (300681.SZ).
Risk Warning: Insufficient increase in the electrification penetration rate, failure to meet expectations in setting up recharging facilities, unexpected rise in raw material prices.