The Rise of Electric Vehicles in Construction: A New Era for the Industry - EquipmentWatch

The Rise of Electric Vehicles in Construction: A New Era for the Industry

The construction industry is undergoing a significant transformation. While the sector has traditionally relied on diesel-powered machinery, a new wave of electric vehicles (EVs) is emerging as a game changer. As contractors and manufacturers embrace this technology, it’s clear that electric vehicles are not just a fleeting trend—they’re here to stay. But how did we get here, and what does the future hold for EVs in construction? 

Labor Shortage: The Industry’s Ever-Present Challenge

One of the most pressing issues the construction industry faces today is a shortage of skilled labor. According to a report by the Associated General Contractors of America (AGC), a staggering 88% of construction firms in the U.S. are experiencing difficulties filling key positions.1 This scarcity is more than a minor inconvenience—it’s a significant roadblock that threatens the growth and success of construction companies nationwide. 

The shortage of labor has pushed many firms to search for solutions that simplify operations and increase efficiency. Electric vehicles and machinery are proving to be a pivotal part of this shift. With quieter operation, lower emissions, and reduced long-term costs, EVs offer a sustainable and efficient alternative to traditional equipment.

Electric Vehicles: A Quieter, Cleaner, More Efficient Solution

Manufacturers like Volvo Construction Equipment and Caterpillar have taken the lead in developing electric machinery, such as excavators, loaders, and cranes.2 These machines offer clear advantages, including quieter operation, reduced emissions, and lower overall operating costs. In an industry that relies heavily on heavy machinery, these benefits cannot be overstated. But beyond the environmental impact, the move towards electric vehicles also aligns with broader industry goals to streamline operations and reduce downtime. 

As electric vehicles gain traction, they bring the promise of more reliable, easy-to-maintain equipment. This is particularly relevant in a time when finding skilled technicians is increasingly difficult. Could this shift to electric vehicles ease some of the operational pressures that contractors face? 

Electric construction machines with charging station. Concept.

The Role of Legislation in Advancing EV Adoption

Cover of the Inflation Reduction Act guide book and page from the Bipartisan Infrastructure Law

The rise of electric vehicles in construction is not happening in isolation—it’s being propelled by significant legislative support. Two key pieces of legislation, the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA), have both contributed to the growth of the EV industry.3

The BIL provides more than a decade of funding for EV infrastructure, which includes grants for increasing domestic battery manufacturing. On the other hand, the IRA offers tax credits to consumers and incentives to manufacturers, spurring investment in electric vehicles and batteries. Since the passage of the IRA in 2022, companies have poured $85 billion into new EV and battery manufacturing facilities, leading to the creation of over 82,000 new jobs in the United States.4 

This influx of investment and job creation bodes well for the construction industry, where EVs are set to play a crucial role in reducing emissions and modernizing job sites.  

Hybrid Equipment: Bridging the Gap Between Diesel and Electric

While fully electric machinery is still in its early stages, hybrid equipment offers a compelling middle ground. Hybrid machines combine the power of a diesel engine with the emissions-cutting capabilities of a battery.5 This combination allows contractors to benefit from lower emissions without sacrificing the power required for high-intensity jobs. 

Belgrade, Serbia - April 27, 2022: Close up of the Volvo emblem on a bulldozer at the South East Europe Belgrade building expo- Volvo logo on construction equipment

A prime example of this is Volvo CE’s LX1 hybrid 20-ton loader, which is 50% more fuel-efficient than its conventional diesel counterpart. Other major manufacturers, such as Caterpillar, Bobcat, Doosan, Hyundai CE, and JCB, are also developing hybrid and electric machines, positioning themselves to meet the growing demand for cleaner, more efficient equipment. 

Hybrid technology is not only a step toward sustainability but also a way to minimize operating costs. In an interesting innovation, some of these machines use regenerative braking systems to recover and reuse energy that would otherwise be lost as heat. This innovation could lead to significant cost savings for contractors.6  

Example:

The world’s largest electric vehicle is a 45-ton mining truck designed by the German manufacturer Kuhn Schweiz. This all-electric truck, officially named the Elektro Dumper, is used to transport marlstone, and it never needs to be recharged thanks to its regenerative braking system. When the truck descends a hill, the braking system recaptures energy created by the downhill movement and stores it in the truck’s 600 kW per hour battery pack.7

Green energy efficient mining truck concept on a black background being charged up from an electric charger 3d render

The Benefits of Reduced Idle Time

One of the standout advantages of all-electric equipment is the elimination of fuel costs and reduced operating costs, thanks to lower engine run time. In traditional diesel-powered equipment, idle time—when the machine is on but not actively operating—can add unnecessary wear and tear to the engine. This is not the case with electric equipment. When the operator stops the machine, the engine shuts off completely, meaning no additional operating time accumulates. 

This not only helps to extend the life of the machinery but also lowers costs related to maintenance and fuel. For contractors looking to maximize efficiency and minimize unnecessary expenses, this is a significant selling point.8  

The Impact on Lift/Access and Aerial Work Platforms

One sector already seeing the effects of electrification is the lift/access industry, particularly in the realm of Aerial Work Platforms (AWP). As the demand for sustainable construction solutions grows, so does the push for electrification within the AWP market. OEMs like JLG and Genie are leading the charge, with more electric models being introduced to meet evolving safety standards and sustainability goals.9

The shift to electric AWP is particularly impactful for contractors working on both residential and commercial projects. Electric models offer quieter operation, which is ideal for urban job sites, and zero emissions, which aligns with the industry’s move toward greener practices.

Assemblers repairing a harbor crane on a high lift
EquipmentWatch State of the Construction Equipment Economy cover

The Role of Market Data in Driving Electric Equipment Adoption

In this rapidly evolving landscape, access to accurate data is crucial for making informed decisions. Fusable’s EquipmentWatch, through its extensive database and market analysis, plays a critical role in helping contractors and manufacturers understand the value of electric vehicles in construction.

As reported in EquipmentWatch’s 2024 State of the Construction Equipment Economy, nearly 135,000 new pieces of construction equipment were financed in the United States in 2023, a 2.7% increase from the previous year.10 Compact equipment, including electric compact track loaders, skid steers, and mini excavators, dominated the list of new machines financed. These smaller, more affordable electric vehicles are increasingly popular among contractors looking to modernize their fleets without incurring the high upfront costs associated with larger machinery. 

Access to real-time data, like the number of new pieces of equipment leased, available via Fusable’s EDA platform, allows contractors to track trends, understand the evolving market, and make strategic decisions about equipment purchases.  

What’s Next for Electric Vehicles in Construction? 

The future of electric vehicles in construction looks promising, but it also presents challenges. Manufacturers must continue to innovate to meet the power demands of larger construction machinery, while contractors need to weigh the costs and benefits of transitioning to electric fleets. 

Legislation, hybrid technologies, and market demand will undoubtedly drive the adoption of electric vehicles, but how quickly the industry embraces this change remains to be seen. Contractors who stay ahead of the curve, leveraging data and investing in electric technology, stand to benefit from reduced operating costs, increased efficiency, and a smaller environmental footprint. 

As electric vehicles become more integrated into construction operations, the construction industry will need to adapt. The question remains: How prepared are contractors to make the shift, and what steps can they take today to ensure a smoother transition tomorrow?