The commercial EV segment is growing in the face of market slowdown

Yahoo

31-07-2025

While the consumer market for electric cars is starting to slow, the commercial vehicle business is still growing.
Registrations for commercial electric vehicles — Classes 3 through 8 — rose 274 percent to 24,871 for the 12 months ended May 31 compared with the same period a year earlier, according to data from S&P Global Mobility. Those include delivery vans, utility trucks and big rigs.
Registrations for Class 2 EVs — often used for work — rose 69 percent to 417,246 in the same period.
Light EVs — the consumer market — shrunk by 2 percent to 694,678.
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Companies like Ecolab, an infection prevention, water and hygiene supplier based in St. Paul, Minn., are behind the growth in sales of commercial EVs. Ecolab has a fleet of 11,000 vehicles, 1,000 of which are now electric.
'We see electrification of vehicles, long term, as being a really strong business model for us,' said Mike Hauge, manager of fleet electrification for the supplier.
Ecolab is looking to electrify its entire North American fleet by 2030.
Many of the businesses moving to electric fleets see a cost advantage over combustion engine vehicles, said Jacob Richard, technical project manager at Calstart, a Pasadena, Calif., clean transportation nonprofit.
Amazon has more than 25,000 EVs on the road, all Rivian delivery vans. These EVs have helped with costs, in part because of route optimization, Tom Chempananical, director of Amazon's global last-mile fleet, said in an email.
Companies that use fleets to run regular routes and then return to a depot to charge, often at night, are best able to integrate EVs into their operations.
EVs also require less service than their fuel-powered counterparts, and the cost of electricity is often less than gasoline — though both expenses can vary by state and vehicle model. For companies that have fixed-price contracts with electric providers, costs tend to be more consistent than constantly fluctuating gasoline prices.
While there are plenty of reasons to electrify — lower operating expenses, the convenience of starting the day with the equivalent of a full tank of gasoline and route optimization — certain factors are still holding some fleets back. The most important are high upfront costs, underdeveloped infrastructure and policy uncertainty, according to Calstart.
What keeps fleets from converting to electric?
Regulatory efforts and purchase incentives have helped many fleets handle the high entry costs of electrification. The Advanced Clean Trucks regulation originating in California that was adopted by 11 other states, including Maryland, New York and Washington, requires automakers marketing medium- and heavy-duty vehicles to sell zero-emission vehicles at an increasing percentage of annual sales.
Of the cumulative zero-emission truck deployments in the U.S., 39 percent were in Advanced Clean Trucks regulation states. States that follow the standard represent 27 percent of the nation's total truck stock, according to Calstart.
'When looking at that total cost of ownership, you kind of need to have those upfront incentives in the near term,' Richard said.
The share of zero-emission truck deployments in states that follow the Advanced Clean Trucks regulation has increased steadily, growing by 1 percent in all of the last three reporting periods to 39 percent.
But President Donald Trump's administration is reversing many of the regulatory and environmental policies that supported EV sales. Trump signed congressional resolutions revoking EPA waivers that would uphold Advanced Clean Trucks standards. California Governor Gavin Newsom said that the state would file a lawsuit challenging Congress' ability to revoke EPA waivers. In addition, governors in some states that originally set enforcement at model year 2025 or 2026, including Maryland, Massachusetts, Oregon and Vermont, signed executive orders pushing back compliance timelines by a year or longer.
While Advanced Clean Trucks standards being scaled back presents a 'cloudy policy picture,' the impact won't stop progress because other efforts at the state and local level will continue to spur investment, Richard said.
Infrastructure issues hamper commercial EV market
Infrastructure is another major barrier to growth in the commercial EV segment. Getting local infrastructure to a level that will support the electricity needs of commercial EV fleets takes not just money, but time. The process could take up to two years, Richard said.
'The utility permitting process and all of that probably needs to be sped up,' he said.
Fleets wanting to electrify sometimes have to take infrastructure efforts on themselves. Amazon has established an internal charging infrastructure, setting up more than 32,000 chargers spanning 180-plus sites in the U.S.
To establish that infrastructure, Amazon first had to understand how to optimize vehicle range on delivery routes. Routes for Amazon electric vans consist of a mix of highway driving, short start-stop segments in neighborhoods and stationary time during deliveries, which interferes with the accuracy of industry standards for range estimation, Chempananical wrote. Amazon has taken it upon itself to learn what its vehicle range is to make the most out of its EVs — using artificial intelligence and machine learning to model routes considering distance, speed, elevation and environment — all to get accurate estimates.
Education and outreach is also a prominent barrier to growth, Richard said. In order for the market to have sustainable growth, it's not just fleets that need educating, but dealers and policymakers. There have been instances of fleets wanting to electrify, but no dealers available to help them make that transition.
'They're excited, they go to the dealer,' Richard said. 'But then the dealer's like 'I don't know — what? Why should I?''
The future of the commercial EV market
While registration numbers are holding strong, threats to the industry might put that growth in jeopardy.
'I don't think we're gonna see probably exponential growth in the next at least few years,' Richard said.
But these changes won't be the end of electrification, he said. A lot of projects are already in motion, specifically battery projects that would help domesticate the supply chain. And better access to batteries means better prices. That might make 2027 a crucial year for growth, Richard said.
The people in businesses are already electrifying, and they don't plan on stopping, he added.
Ecolab hasn't backed down on its promise to electrify its entire 11,000-vehicle North American fleet by 2030. Neither has Amazon, which has promised to expand its electric fleet to 100,000 vehicles by 2030.
And the states that already have plans and efforts in place to decrease carbon emissions aren't stopping, either. Illinois, Massachusetts, New Jersey, New York, Oregon, Washington and more have plans in place to incentivize electrification on the state level, according to Calstart.
'That makes up a big vehicle population,' Richard said. 'So it's going to still continue to happen.'
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