According to the latest research report titled “Electric Ships Market Forecast to 2028 – COVID-19 Impact and Global Analysis – by Type, Power, Range and Ship Type,” the market is expected to grow from US$ 3.82 billion in 2021 to US$ 7.76 billion by 2028; it is estimated to grow at a CAGR of 10.3% from 2021 to 2028.
Increasing Regulatory Support from Government Authorities and Industry Associations to Favor Market Growth
Several marine industry associations are focusing on reducing the gas emission from the shipping industry. As per a report published by the Norwegian Ministry of Climate and Environment, in April 2018, International Maritime Organization (IMO) adopted a plan to reduce greenhouse gas emissions from international shipping by ~50% compared with the level in 2008 by the end of 2050. Additionally, the IMO strategy aims to improve the energy efficiency of each ship and to reduce the carbon intensity of the whole marine industry by reducing emissions per unit of transport work done by ~40% by 2030, and further toward 70% by 2050, according to a report published by the Norwegian Ministry of Climate and Environment. Further, several governments are focusing on reducing the gas emission from the shipping industry. For instance, according to a report published by the Norwegian Ministry of Climate and Environment, in 2019, the Norway government’s focus is on reducing greenhouse gas emissions from domestic shipping and fishing ships by half by 2030 and promoting the development of zero- and low-emission solutions for all vessel categories. For this, the government had allocated NOK 7 million (US$ 0.77 million) to the Green Shipping Programme in the 2019 budget. Therefore, the increasing regulatory support from government authorities and industry associations for reducing greenhouse gas emissions in the shipping industry supports the growth of electric ships by adopting electric or hybrid propulsion systems.
North America has the highest adoption rate of advanced technologies due to governments’ favorable policies to boost innovation and strengthen infrastructure capabilities. The COVID-19 pandemic forced the US government to impose several limitations on industrial, commercial, and public activities in the initial phases to control the spread of COVID-19. The record-long US economic expansion came to an end as a result of the COVID-19 pandemic, with effect of a deep recession in 2020. The outlook remains highly uncertain, as it is difficult to determine the social and economic impact of the COVID-19 pandemic, which will depend on the success of containing the outbreak and the measures to restart economic activities. In 2020, the COVID-19 pandemic adversely affected the growth of the global electric ship market due to the shutdown of manufacturing facilities and trade restrictions. Ship manufacturers had faced short-term operational issues due to supply chain disruption caused by several government initiatives to slow the spread of COVID-19. The shipping industry had become a significant part of several countries’ supply chains; it was significantly affected by the COVID-19 pandemic. The shipping industry depends on production, which was discontinued to prevent people from being affected by SARS-CoV-2, resulting in significant challenges. A South Florida-based cruise ship was affected for the third time, as Florida recorded its highest number of COVID-19 cases. SARS-CoV-2 infected an undisclosed number of passengers and crew of the Carnival Freedom cruise, so the ship was denied entry to Bonaire and Aruba. The growing maritime tourism industry helps in supporting the electric ships market growth. Thus, during 2021 and 2022, the COVID-19 pandemic will positively impact the market growth. This is expected to normalize the electric ships market growth over the forecast period of 2021–2028.
Key Findings of Study:
The electric ships market has been segmented into five major regions—North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South America (SAM). In North America and Europe, the demand for electric ships increases due to its rising demand for fully electric passenger vessels, tugs, yachts, and cruise vessels. Norway, Finland, the US, and Denmark are replacing conventional passenger ferries with fully electric passenger ferries. Significant developments in autonomous electric vessels that use fuel cells and remotely controlled electric vessels are also driving the market growth.
In APAC, the demand for electric ships increases due to the rising sea trade activities and growing government focus on reducing gas emissions from the shipping industry. This has resulted in ship integrators and owners switching the existing diesel-driven engines with electric or hybrid propulsion systems. Therefore, these factors create a vast opportunity for the APAC electric ships market players to produce more electric ships. According to the UN Merchant Fleet 2020 statistics, ~93% of the global new shipbuilding occurred in China, Japan, and South Korea in 2019. The global shipping and offshore energy equipment industry has shifted unequivocally toward Asia. South Korea, Japan, and China now dominate with ~80% of orders. According to IHS Maritime, 134 liquefied natural gas (LNG) tankers built since 2009—133 were built in Asia, 100 in South Korea, 20 in China, and 13 in Japan. While domination by Asian manufacturers is expected to continue, it is important to recognize that each of Asia’s shipping giants has distinct strengths and challenges. Shipbuilding in Japan is going through a renaissance. Focus on shipbuilding and port development is driving the growth of the electric ships market in the region.
