Electric Ships Market Research Report and Outlook by 2028

The worldwide market for electric ships is projected to expand from US$ 3.82 billion in 2021 to US$ 7.76 billion by 2028, reflecting a compound annual growth rate (CAGR) of 10.3% during this period.

The electric ships sector is set for significant expansion in the near future, driven by the rising implementation of hybrid and electric propulsion technologies for retrofitting existing vessels, alongside increasing regulatory backing from governmental bodies and industry organizations. In the Asia Pacific region, which encompasses rapidly developing nations like China and India, there is a notable surge in investments in shipyard development from both public and private sectors. Additionally, smaller nations such as Indonesia and the Philippines are also drawing in investors, further propelling the growth of the electric ships market. With the escalation of maritime trade and a heightened governmental emphasis on minimizing greenhouse gas emissions, ship owners and integrators in the APAC region are transitioning from traditional diesel engines to electric or hybrid propulsion systems. This shift creates substantial opportunities for stakeholders in the APAC electric ships market to enhance their production of electric vessels.

While the electric ships market in Asia Pacific is quite fragmented, several companies have established themselves as prominent players in the region, including ABB, General Electric, and Wartsila. These leading firms are making substantial investments in research and development to innovate new products and provide mobile cranes on a global scale. For example, Vallianz, SeaTech, Shift Clean Energy, and ABS have partnered to create the first all-electric harbor tug in the Asia Pacific region. This vessel, based on SeaTech's E-Volt Electric Tug design, will utilize a fully classified electric battery system supplied by Shift. This collaboration follows a recent memorandum of understanding between Vallianz and Shift Clean Energy aimed at working together on vessels requiring electrification solutions.

The ecosystem of the electric ship market includes a variety of stakeholders, such as suppliers of raw materials, component manufacturers, propulsion system developers, shipbuilders or electric ship producers, and end-users. Manufacturers of propulsion systems are vital to the advancement of the electric ship market, as they are consistently innovating to improve electric power generation systems. Suppliers of raw materials provide essential metals and materials, including steel, plastics, GRP, ferrous metals, and wood, which enhance the quality and performance of shipbuilding components.

Component manufacturers supply various essential parts, including electric motors, propellers, switchboards, filters, generators, and control systems. Propulsion system manufacturers source these components and integrate them into cohesive systems suitable for installation in ships. Key players in the development of hybrid and electric propulsion systems include YANMAR HOLDINGS CO., LTD, BAE Systems, Siemens AG, Wartsila Corporation, and ZF Friedrichshafen AG.

Shipbuilders and electric ship manufacturers, such as BAE Systems, Hurtigruten, MAN Energy Solutions, Siemens Energy, and General Dynamics Electric Boat, prioritize customer needs to incorporate cutting-edge technology into vessels that end-users can operate. These systems can also be tailored to meet the specific requirements and operational needs of various stakeholders in the electric ships market. Overall, every participant in the electric ships market ecosystem is essential to the sector's growth and evolution.

Effects of the COVID-19 Pandemic on the Electric Ships Market

The COVID-19 pandemic has had a profound effect on the Asia Pacific region, which is densely populated and has faced extensive outbreaks. Major economies in this area, including China, India, Australia, and Japan, have been significantly impacted by the pandemic, leading to inflationary pressures. The tourism sector has suffered greatly due to disruptions in supply chains and the heightened demand for COVID-19 healthcare solutions. Efforts to control the virus's spread through waterways have influenced the demand for electric ships, as restrictions have led to a decrease in goods demand across various nations.

Despite the hurdles presented by the pandemic, the electric ships market in Asia Pacific has demonstrated resilience, with demand from diverse end-users increasing towards the end of 2020 as lockdown measures were eased and industries resumed their activities. The market size for electric ships has been calculated using a combination of primary and secondary research methods, including comprehensive secondary research and direct interviews with industry stakeholders such as vice presidents, business development managers, and market intelligence professionals. Key players in the market include BAE Systems, Duffy Electric Boat Company, Fjellstrand AS, X Shore, General Dynamics Electric Boat, Hurtigruten, MAN Energy Solutions, PortLiner, Siemens Energy, and VARD AS.