The automotive diesel engine market is expected to decline in the coming years, as EV uptake continues to grow across the Asia Pacific (APAC) region.
According to GlobalData, the APAC diesel engines market is expected to record a negative compound annual growth rate (CAGR) of 2.0 per cent over 2024-29.
In response to the growing trend of electrification, APAC governments are implementing policies and incentives designed to promote zero-emission vehicles.
GlobalData’s latest report, “Global Sector Overview & Forecast: Engines Q3 2024” reveals that the diesel engines market is estimated at 4.6 million units in 2024 and is forecast to decrease to 4.2 million units by 2029 in the APAC region.
According to Globaldata, both the passenger and commercial vehicle segments are currently experiencing a trend toward electrification. However, diesel engines are expected to demonstrate a slower rate of decline in comparison to petrol engines.
This dynamic is particularly significant in the context of the commercial vehicle segment, where the electrification process presents considerable economic challenges for fleet owners. The high initial investment required for electric fleets, which typically exceeds that of ICE counterparts, poses a substantial barrier.
Automotive Analyst at GlobalData, Madhuchhanda Palit, outlined the how Asian countries have demonstrated a proactive approach in implementing policies that foster the growth of the electric vehicle (EV) market.
“When it comes to transporting heavy loads, ICE engines remain more advantageous,” Palit says.
“The battery systems needed to power heavy cargo trucks for long-distance hauls—such as Class 8 trucks, which typically require a battery capacity of 1-2 MWh—are considerably heavier than a full diesel tank.”
“Inadequate charging infrastructure also works as a major restraint and reason for reluctance among fleet owners to shift towards electrification in countries such as India, Thailand, and Indonesia.”
Automotive manufacturers rethinking EV goals
Due to slower EV adoption rates, several key automotive manufacturers have announced a delay in their ‘going-all-electric’ plan.
- Volkswagen has reduced one-third of the planned investment for EVs and has allocated that towards ICE-powered cars.
- Mercedes-Benz has announced its decision to discontinue the development of the forthcoming MB.EA platform, which was intended for mid- and full-sized electric vehicles.
- Ford is reducing its financial commitments to electrification and has significantly decreased its orders for batteries. These developments may be perceived as advantageous for the engine market and could potentially mitigate the rate of market decline.
“In light of the numerous challenges associated with widespread electrification, which necessitates substantial investment and time, manufacturers are actively seeking solutions to comply with emission standards,” Palit says.