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Electric train is powered by electricity and is a clean and cost-effective alternative to diesel trains. Due to rising demand for emission-free trains and growing concern for the environment, rail operators are revamping their fleet and switching toward electric transport as a service model.
Favorable government regulations and infrastructure to promote vehicle electrification will support electric trains. Most European countries, including Germany, the U.K., and France have announced dates after which diesel and gas-powered trucks, cars, buses, and rail vehicles will be phased out from the market. Additionally, the E.U. is targeting a reduction of 90% of greenhouse gas emissions by 2050 with the adoption of battery-electric road vehicles and trains. In January 2021, the U.S. government announced investing in battery research, electrifying railways, building a solid network of electric vehicle charging stations, and expanding high-speed rails across the country. Such trends are anticipated to bode well for the electric train market growth.
The growing technological advancements & developments in energy-efficient motors and higher voltage systems will increase the product adoption. Consumers are opting for cleaner technology, and lawmakers are strengthening emission rules for automakers to reduce pollution levels. The technology needed to electrify trains are still in its infant stage. Emerging technologies, such as Big Data, Artificial Intelligence (AI), and Machine Learning (ML), are being incorporated into electric trains for enhanced operation. The latest trends in the rail industry involve intelligent sensors and drones for inspecting railway tracks, Automatic Train Control (ATC), and digital communication platforms. Rail tech startups are working to scale up various solutions with the help of AI, biometric information, and cloud computing. The Internet of Things (IoT) devices enable predictive maintenance to monitor irregularities, making the task easier for train operators and railroad companies. Such technological developments will pave the path for adopting electric trains in the coming years.
Falling prices of batteries, in tandem with increasing prices of diesel, will further support the adoption of electric trains. For instance, the existing battery technology could power a freight train for 241 km.
A battery-powered freight train utilizes half the energy required by a diesel-electric train. Considering the environmental costs of diesel, battery-electric trains are more cost-competitive than diesel-electric trains. Furthermore, studies suggest that railroads could achieve high-volume use of fast-charging infrastructure, further reducing costs. As per the study conducted by the U.S. Department of Energy's Lawrence Berkeley National Laboratory, battery-electric trains could be deployed as clean backup power, thereby strengthening the resilience of the electric grid.
However, the high cost of battery electric propulsion than diesel, the high power charging infrastructure requirement, and the installation of trackside charging stations will challenge the market growth. For developed countries, such as the U.S., voluntarily upgrading locomotive fleets to battery-electric propulsion would be challenging. Such rail fleet conversion would require significant government subsidies to cover the costs of the battery tenders, modify thousands of diesel locomotives, and upgrade local distribution grids to accommodate superchargers for multiple batteries.
The COVID-19 pandemic adversely impacted the railroad industry in the first half of 2020 due to the rapid spread of COVID-19. Stringent lockdown measures by the government to contain the pandemic slowed down the manufacturing process of locomotives, which resulted in decline of revenues of market players. For instance, Alstom reported 46% drop in orders and sales in the first half of 2020 and 2021. Disruption in supply chain and logistics, shortage of labor, electric components, batteries, semiconductors, and postponement in investment along with the halt in R&D activities impeded the growth of the market. However, the market witnessed growth in 2021, owing to increasing investment by the government and manufacturers in fleet electrification to control pollution levels.
The report will cover the following key insights:
The freight segment is expected to hold the largest share of the market. Electric freight trains are designed to provide cost-effective and efficient transportation services to passengers. Rise in volume of industrial goods, pharmaceuticals, groceries, and other essential items will surge the demand for electric rail freight. Several emerging and developed countries are investing in new rail and charging infrastructure to tackle climate change and provide an economical & environment-friendly mode of transport. Increasing urbanization and growing demand for improved connection, safety, and security will propel the growth of this segment.
The greater than 200 km/hr segment is anticipated to register the fastest growth rate as per the market study. Growing demand for fast and effective rail services will boost the segment growth in the coming years. High investment by Asia, the Middle East, and European countries to develop high-speed train projects and networks will further support the segment's growth. For instance, in July 2022, Saudi Arabia debuted its first high-speed electric train traveling at 300 km/hr. By using state-of-the-art technologies, the Haramain High-speed Train aims to provide the highest level of safety, convenience, and reliable way to travel among holy cities such as Makkah and Madinah.
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The European region dominated the market segment in 2021. High emphasis by the EU government bodies on the electrification of vehicles in two decades, low prices of electric batteries, and the presence of favorable infrastructure are contributing to regional growth. For instance, in March 2022, the German Association of German Transport Companies (VDV) presented plans for faster electrification of railways and the government aims to electrify rails by 75% by 2030. The Asia Pacific region is anticipated to register a higher CAGR owing to robust investment by the government to build charging infrastructure, growing concerns among the countries to reduce carbon emissions, and increasing adoption of electric vehicles in the region.
The report will include the profiles of key players such as Bombardier Transportation, Siemens Mobility, SCHÖMA, Wabtec Corporation, ALSTOM, G.E. Transportation, Electro-Motive Diesel, Inc., Hitachi Rail Limited, Kawasaki Rail Car, Inc., and Firema Trasporti SpA.
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