Can Chinese construction machinery companies overtake others by using electrification technology?

In the past few years, the direction of new energy was still unclear, and the battle between hydrogen energy and electric energy was even called a battle of national destiny. At present, China has a great chance of winning, and the technical strength and market penetration of new energy vehicles and new energy construction machinery are in a leading position in the world.

Recently, according to a global electric construction machinery market research report from the Internet: nearly 7,300 electric construction machinery will be sold worldwide in 2023, and the global electric construction machinery penetration rate will reach 0.6%, most of which are medium-sized wheel loaders in China.

According to data from the China Construction Machinery Industry Association: In May 2024, the industry sold a total of 1,250 electric loaders (14 3-ton, 992 5-ton, 196 6-ton, 48 7-ton), and the electrification penetration rate reached 12.72%, a year-on-year increase of 408.13%! Although the sales of electric excavators are not high, many Chinese companies have either formed fixed customers or their products have made breakthroughs in the European market.

Some institutions predict that the penetration rate of electrification of construction machinery is expected to reach more than 30% after achieving technological breakthroughs and fully reducing costs in the future, and there is great room for the development of electrification of construction machinery.

Reviewing the rise of Komatsu, the global leader in construction machinery, we can find that technological innovation is the magic weapon for enterprises to overtake on the curve. In the 1980s, Komatsu significantly eroded Carter’s market share in the US market by mastering the world’s leading hydraulic technology, and then ranked second in the world.

Now is an important development stage for construction machinery from hydraulic signal transmission to electrical signal transmission. At present, Chinese construction machinery companies have obvious advantages in electrification, and have first-mover advantages in brand influence, market share, after-market services and industrial chain layout. So, can Chinese construction machinery companies repeat Komatsu’s path to the top and use electrification technology to overtake on the curve?