$4.5 billion. That’s the revenue generated from battery packs for off-highway machines in 2025, making them the largest opportunity of any electrified powertrain component. By 2030, that figure is forecast to approach $8 billion as electric machine production scales.

This makes off-highway battery packs an attractive opportunity, right?

The reality is very different.

Battery pack manufacturers are chasing an off-highway market that is more crowded, more captive, and far smaller than many realize. Despite the impressive headline figure, electrification remains confined to a relatively small number of machines and geographies. Many OEMs make their own battery packs or are increasingly bringing battery capabilities in-house, and suppliers are competing in a market that is becoming commoditized.

This is the uncomfortable truth about supplying battery packs to the off-highway industry.

Competition is increasing faster than market differentiation

While battery packs may represent the largest revenue opportunity in the off-highway electrification value chain, they are not necessarily the most attractive opportunity for suppliers.

The supplier landscape is increasingly crowded, with at least 20 different battery specialists, system integrators, cell manufacturers and new market entrants all competing for a share of a relatively small addressable market. At the same time, there is little to differentiate many battery pack offerings. Most suppliers source cells from the same handful of manufacturers, package them in similar architectures, and compete on broadly comparable performance metrics. As a result, battery packs are becoming commoditized, making it difficult for suppliers to compete on anything other than price.

This shift is already reshaping OEM sourcing strategies. While some suppliers continue to position battery packs as a high-value engineered product, many OEMs simply view them as another component to be competitively sourced. Our internal supplier mapping demonstrates this trend, with several OEMs already adopting multi-sourcing strategies for battery packs. JCB, for example, works with multiple suppliers across its electrified portfolio, rather than relying on a single partner. At the same time, a growing list of OEMs are making their own packs or acquiring this capability to bring production in-house.

Find out more about our research.

OEM insourcing continues to constrain supplier growth

OEM insourcing constrains supplier opportunities, meaning a significant proportion of the market is never available to suppliers in the first place. John Deere acquiring Kriesel is not ‘new’ news, but others are following suit. Manitou agreed a joint venture with Hangcha to  manufacture Li-ion batteries; a move more OEMs are likely to make to strengthen internal battery capabilities as off-highway electrification progresses.

Our latest analysis found that in the EMEA and North America regions nearly 40% of off-highway battery packs were insourced, proving how captive supply is significantly reducing the accessible market for independent suppliers. This does not necessarily mean outsourcing opportunities will remain limited in the future. Increasing electrification volumes could encourage greater outsourcing over the mid-term, creating new opportunities for specialist suppliers.  However, for suppliers targeting today’s market, the reality is that the addressable opportunity is substantially smaller than the headline revenue figure suggests.

Electrification is creating targeted growth pockets, not a broad-based opportunity

Within the accessible market, growth remains concentrated in a relatively small number of applications. Forklifts and aerial work platforms (AWPs) accounted for just over 70% of 2025 battery pack revenue, but these are mature electrification markets that are already heavily commoditized and saturated with lead-acid and low-value Li-ion battery packs. Excluding these machine types, production volumes remain modest across other off-highway equipment categories, with around 30,000 electric machines produced in 2025. Importantly, around three-quarters of these machines are large wheel loaders, with production concentrated in China. So, with much of the near-term battery pack demand generated by Chinese OEMs and domestic supply chains that are already highly vertically integrated, what opportunities can battery pack manufacturers target?

Outside of China, electrification continues to be driven by specific equipment categories where battery-electric machines offer a clear operational advantage. This creates small ‘pockets’ in the off-highway equipment market for suppliers to target, each of which amounts to only a few thousand units annually. Compact equipment, including mini excavators, compact wheel loaders and mini track loaders, is beginning to reach meaningful production volumes, while zero-emission requirements are accelerating demand in indoor construction, underground mining, and other enclosed operating environments. These applications represent genuine growth opportunities, but they remain niche markets rather than evidence of broad industry-wide electrification.

From commodity to competitive advantage

Suppliers relying on standard battery pack platforms will find themselves competing against dozens of similar alternatives, many of which can deliver comparable performance at lower cost. Success will therefore depend less on simply offering another battery pack and more on demonstrating application-specific value.

That could mean developing battery systems optimized for particular duty cycles, delivering superior thermal management to improve safety and battery life, or designing packaging solutions that integrate more effectively within specific machine architectures. Rather than pursuing a universal ‘one-pack-fits-all’ strategy, suppliers are likely to achieve greater success by focusing on two or three equipment categories in which electrification is scaling and where genuine engineering differentiation remains a possibility.

Equally important is knowing where not to compete. Understanding which machine segments comprise the addressable market, which OEMs continue to outsource battery packs, and which geographic territories are likely to generate future demand are key questions to answer as you develop your strategy.

How our research can help you

Having researched the off-highway electrification market for nearly 10 years, we have an unparalleled wealth of insight on where machines are electrifying and in what volumes. But, further than that, we have insight that goes beyond the numbers. Yes, the market for electrified off-highway equipment is growing, but can your battery business capture that opportunity? Are you prepared for a marathon, not a sprint? Do you know which OEMs to work with and who your competitors are? If you need help with these questions, or any others, please contact us or download our Off-Highway Powertrain brochure below.