U.S. Commercial Vehicle Market Size, Share & COVID-19 Impact Analysis, By Vehicle Type (Light Commercial Vehicles, Medium Commercial Vehicles, and Heavy Commercial Vehicles), By Propulsion Type (ICE, BEV, Hybrids, and FCEVs), and Country Forecast, 2023–2030

The U.S. commercial vehicle market size was valued at USD 581.31 billion in 2022. The market is projected to grow from USD 638.47 billion in 2023 to USD 1,276.0 billion by 2030 at a CAGR of 10.4% during the forecast period.

Commercial vehicles are four-wheeled vehicles are primarily designed and used for transporting goods, passengers, or both as a part of their business activities. These vehicles include trucks, buses, vans, and other specialized vehicles. The difference in weight between light commercial vehicles and large trucks is measured in metric tonnes. This limit ranges from 3.5 to 7 tonnes, depending on professional and national standards.

The rapid boom in the e-commerce sector has created a need for efficient and timely delivery of products, increasing the delivery of heavy and light duty commercial vehicles. As per the U.S. Department of Commerce, in 2022, e-commerce sales in the U.S. reached USD 1.03 trillion. In addition, the total retail sales for the second quarter of 2023 were estimated at USD 1,798.2 billion.

Furthermore, the upward trajectory in the e-commerce logistics market has led to an increased demand for last-mile delivery vehicles, including vans and commercial trucks, to transport packages to customers’ doorsteps. In this regard, several e-commerce companies are expanding their delivery services to offer faster and more reliable shipping options. Some of the e-commerce giants, including Alibaba and Amazon, are expanding their fleet size to deliver products to their customers on the same day at little or no extra cost. For instance, in July 2023, Amazon added a 5,000th Rivian electric delivery van to the U.S. fleet to meet the growing needs of its e-commerce customers and create a more sustainable private fleet.  Thus, the boom in the e-commerce sector is anticipated to fuel the U.S. commercial vehicle market growth.

COVID-19 IMPACT

Lack of Availability of Raw Materials and Semiconductor Shortage Impacted the Production Of the Product

The COVID-19 pandemic adversely impacted the U.S. market. Several businesses scaled back or temporarily shut down their operations during lockdowns and restrictions. This resulted in reduced demand for goods and services, which, in turn, affected the need for the product, especially in industries such as hospitality, tourism, and non-essential retail. Moreover, the pandemic restrictions caused production and demand disruptions to automobile manufacturers and their sub-contractors. It also resulted in the halting of the supply chain, mainly for raw materials coming from Asian regions, for steel parts, paints, and machinery. This resulted in substantial delays in fulfilling existing orders. In addition, the production of trucks and buses was hampered or lowered due to limited raw material availability and high import taxes.

As per the United States International Trade Commission (USITC), product sales in the U.S. declined by 15% from 2019 to 2020. This sales decline was almost twice the decline during the 2008-09 global financial crisis, when sales dropped by 8.1%. Furthermore, in 2021, the shortage of semiconductor chips led automakers to cut production. For instance, in Q2 2020, Ford was compelled to decrease the production of its F-150 truck, which accounts for a major portion of the company’s revenue. Similarly, General Motors temporarily halted its production in March 2020, and Toyota also announced its plan to reduce its annual production by 40% in 2021 due to the shortage of semiconductors. These factors directly impacted the financial performance of product manufacturers in 2020.

LATEST TRENDS

Electrification and the Adoption of Advanced Connectivity Technologies to Boost the Market Growth

The adoption of electric commercial vehicles, including delivery vans, commercial trucks, and buses, is on the rise. Companies such as Tesla, Rivian, and traditional automakers are investing in electric commercial vehicle development to meet the rising demand in the market. Alongside electric vehicles, there is a growing interest in alternative fuels for products, such as natural gas, propane, and Hydrogen. This trend is aimed at reducing operating costs, lowering emissions, and meeting sustainability goals.

Moreover, the U.S. government plans to reduce greenhouse gas emissions by 50-52% below 2005 levels in 2030. Besides stringent regulations to curb the rising emission level, the government is taking various initiatives to promote the electrification of vehicles. For instance, in November 2021, the U.S. government, under the Bipartisan Infrastructure Law, allocated USD 7.5 billion for building EV charging stations across the country.

Furthermore, products are increasingly equipped with advanced telematics and connectivity solutions. Fleet management systems, real-time data monitoring, and predictive maintenance capabilities are becoming standard to improve operational efficiency and safety.

In addition, the use of cloud computing in the automotive industry is growing rapidly due to the adoption of connected vehicle technology. In this regard, automotive manufacturers are partnering with cloud technology companies to enhance their connected vehicle technology. For instance, in February 2021, Ford and Google formed a strategic partnership to accelerate Ford’s transformation and reinvent the connected vehicle experience. As part of this new partnership, all the vehicles of Ford and Lincoln would be backed by Android, with Google app services built-in.

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DRIVING FACTORS

Increasing Urbanization and Industrialization to Drive the Market Growth

Increasing urbanization, expansion in the industrial sector, and developing infrastructures are the foremost reasons driving the market growth. The industrial sector is expanding, which is giving rise to a high amount of jobs in various sectors such as mining, construction, and tourism. The availability of employment opportunities has increased the number of commuters, thereby creating a high demand for public transport.

In addition, increasing government spending on developing road infrastructures to promote the transportation and logistics sector is one of the primary factors propelling the market growth. For instance, in November 2021, the Bipartisan Infrastructure Law allocated USD 550 billion over fiscal years 2022-2026 for investment in roads, bridges, mass transit, water infrastructure, resilience, and broadband.

RESTRAINING FACTORS

High Maintenance Cost May Limit the Market Growth

As the automobile industry is shifting toward electrification and adoption of advanced technologies in vehicles, the high cost incurred during production, as well as the complex mechanism in advanced systems, are expected to hamper the market growth. Moreover, the integration of advanced driver assistance systems (ADAS), such as driver monitoring, adaptive cruise control, park assist, and others, enables the use of sensors, cameras, radars, mapping, and other software systems. These systems not only increase the overall price of vehicles but also bring many technical challenges and complications with them.

Moreover, various cybersecurity threats and the complexities in operating systems may cause hazards to the vehicles along with the passengers and driver. Any malfunctions' or forced and unforced errors in these advanced systems may be dangerous and life-threatening for the users.

SEGMENTATION

By Vehicle Type Analysis

Light Commercial Vehicles Held the Largest Share Owing To the Development of Luxury Pickup Trucks by Manufacturers

Based on vehicle type, the market is segmented into light, medium, and heavy commercial vehicles.

The light commercial vehicles segment held the largest share in the market in 2022. Automotive manufacturers are introducing new sets of features into light commercial vehicles, such as high-performance engines, advanced navigation systems, and dashboard cameras to enhance customer experience. The leading automakers such as Ford Motor, General Motors, General Motors, and Fiat Chrysler Automobiles have introduced pickup trucks in the luxury vehicle category with enhanced vehicle interiors, premium massage seats, and touch screens. For instance, Ford’s F-150 2023 version comes with a 3.5L PowerBoost Full Hybrid V6 engine and premium seats to provide a luxury experience for customers.

The medium commercial vehicles segment is expected to grow at the highest CAGR during the forecast period. Government investments in infrastructure projects, such as road construction and maintenance, can lead to increased demand for medium-duty trucks used in construction and related industries, thereby driving the segment growth.

The heavy commercial vehicles segment is anticipated to grow significantly over the forecast period. The high segment growth can be attributed to the growing demand for buses, coaches, and heavy-duty trucks in the U.S. The expansion of the energy sector, including the transportation of equipment and materials for oil, gas, and renewable energy projects, has increased the demand for heavy commercial vehicles in the country, propelling the segment growth.

By Propulsion Type Analysis

ICE Segment Dominated due to the High Availability of Conventional Fueling Infrastructure

Based on propulsion type, the market is classified into ICE, BEV, hybrids, and FCEVs.

The ICE segment held the largest U.S. commercial vehicle market share in 2022. The U.S. has an extensive network of gasoline and diesel fueling stations, making it convenient for consumers to refuel ICE vehicles. This existing infrastructure has made it easier for people to adopt and use gasoline and diesel-powered vehicles. Moreover, lower upfront costs have significantly propelled the segment growth.

The FCEVs segment is expected to grow at a significant pace during the forecast period. Research and development in fuel cell technology have led to improvements in efficiency, durability, and cost-effectiveness. These advancements have made FCEVs more viable and attractive as a transportation option. Moreover, the government authorities in the country are investing in hydrogen fuel technologies. For instance, in January 2023, the U.S. Department of Energy (DOE) allocated USD 47 million in funding to accelerate the research and development of hydrogen technologies. Projects funded under this opportunity will reduce manufacturing costs, improve hydrogen infrastructure, and enhance hydrogen fuel cell performance.

The hybrids segment is anticipated to exhibit a moderate growth rate over the forecast period. Hybrid vehicles combine ICE with an electric motor, providing enhanced fuel efficiency and reduced carbon emissions as opposed to conventional gasoline-only vehicles. Federal and state government incentives are providing tax credits, subsidies, and rebates to encourage the adoption of hybrid vehicles. These incentives helped offset the initial purchase price and made hybrids more attractive to consumers.

The BEV segment is anticipated to grow at a significant rate over the forecast period. Supportive government policies to minimize pollution levels and growing demand for fuel-efficient vehicles have fueled the market growth of electric vehicles. In June 2023, the U.S. government issued a conditional loan of USD 9.2 billion to Ford Motor Company for the construction of 3 battery factories for the EV ecosystem and to catch up with China’s EV dominance.

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KEY INDUSTRY PLAYERS

Key Market Players Have Been Focusing in Technological Expansion to Drive Market Growth

Several established players dominate the U.S. market. Within the competitive landscape, players exhibit a diverse product portfolio with a high focus on technological expansion. Moreover, various regional and international players consistently develop advanced strategies for competitive advantage. Several companies are also adopting different growth strategies, such as new vehicle launches, acquisitions, and partnerships and collaborations, to gain a competitive advantage in the market. For instance, In July 2023, IC Bus, a subsidiary of Navistar, announced the launch of its next-generation CE Series school bus, a newly redesigned and updated version of its flagship CE Series. The all-new CE Series is designed to provide its customers with efficient operations and enhanced driver comforts, improved total cost of ownership (TCO), and increased safety features.

LIST OF KEY COMPANIES PROFILED:

• Paccar Inc. (U.S.)


• General Motors (U.S.)


• Ford Motor Company (U.S.)


• Navistar, Inc. (U.S.)


• BYD (China)


• Mercedes-Benz Group (Germany)


• AB Volvo (Sweden)


• Scania (Sweden)


• Nikola Corporation (U.S.)


• Workhorse Group (U.S.)

KEY INDUSTRY DEVELOPMENTS: 

• August 2023 – BYD | RIDE delivered two K7M 30’ battery-electric buses to the City of Burlington in North Carolina to serve the passengers of its Link Transit Fleet. The 30-foot buses can accommodate up to 22 passengers and are equipped with the industry’s safest batteries, providing a smooth, quiet, and sustainable ride throughout the city.


• June 2023 – General Motors Co. acquired ALGOLiON Ltd., an Israel-based battery software startup, for an undisclosed amount. The software uses data streams from EV battery management systems to identify anomalies in battery performance to ensure proper vehicle health management and provide early detection of battery hazards, including thermal runaway propagation events.


• May 2023 – Scania announced to reshape its bus and coach business to provide customers with competitive and sustainable mobility solutions and secure profitable growth in a changing market environment.


• March 2022 – Volvo Trucks received an order of 50 Volvo VNR Electric Trucks for WattEV's Truck-as-a-Service start-up. The Volvo VNR Electric trucks operate on routes between the Inland Empire, California's San Joaquin Valley, and the Ports of Long Beach and Los Angeles.


• September 2021 - Ford invested USD 11 billion to set up several plants to produce electric vehicle parts. The company also invested in new assembly plants to build all-electric F-series trucks and three battery plants, including factories in Tennessee & Kentucky.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects, such as leading market players, vehicle type, and propulsion type. Besides this, it offers insights into the latest market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the market growth in recent years.

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