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Diesel Demand Looks Hot in 2022
Analysts see robust and growing demand for future diesel products in on and off-road applications.
BY ALLEN SCHAEFFER
Like other industry sectors, diesel engine and equipment makers are working through supply chain issues for parts and key components like computer chips, but overall demand for new advanced diesel engines, vehicles and equipment is strong in all sectors and forecast to continue to grow. Today’s advanced diesel engines offer customers more fuel efficiency, more productivity and lower operating costs compared to previous generations of the technology. Here’s a look at three sectors and insights on their current and future markets.
Power Generation: Demand for generators continues, particularly in the residential segments. Diesel dominates the larger range of generators (51 to over 1,001 kilowatt) for commercial applications. Overall production of diesel generator sets grew in every category (2021 vs. 2020), according to data from Power Systems Research. In the 51-300 kW size, diesel dominates all fuel types with a 12.3% production increase to over 41,000 units for 2021 compared with 2020. Positive influencers in this segment include low financing rates, outlook for boosted investments from the new infrastructure legislation in Congress, growing concern about weather events and reliability of the electrical grid.
Medium- and Heavy-Duty
Trucks: The medium- and heavy-duty truck industry is limited only by supply chain issues. Diesel is the predominant technology for the heaviest commercial trucks—Class 7 and 8—powering over 94% of vehicles. According to ACT
Research, demand for Class 8 vehicles today is the best in history. Forecasts are for full-year 2021 at 288,000 units and for 2022 at 359,000 units. Demand for commercial vehicles is a function of freight demand and driver and equipment availability, all three of which were impacted by the pandemic. Freight demand has skyrocketed, but drivers are in short supply. While expectations are for GDP at 6.2% in 2021 and 2022, freight growth is projected at 12.6% and 5.8%, respectively.
Off-Road Construction and
Farm Equipment: Machines and equipment that plant and harvest crops, move earth to build homes and infrastructure and handle materials have been critical during the pandemic. Most are powered by diesel, and all are expected to see growth in 2021, with sales of earthmoving equipment projected to be up 20%, material handling equipment up 30% and agricultural equipment up 10%, according to data from yengstassociates.com. Tremendous investment in compact construction equipment in 2020 drove sales up 10%, sustaining the equipment sector that saw drop-offs in other larger machine categories. In the agriculture sector, sales of tractors under 40 horsepower were higher in 2020 and are expected to level out in 2021. Future drivers include the overall state of the economy, federal spending and the potential for investment from the infrastructure bill now in Congress.
Allen Schaeffer is the executive director for the Diesel Technology Forum, a nonprofit organization dedicated to raising awareness about the importance of diesel engines, fuel and technology. Diesel Technology Forum members are global leaders in clean diesel technology and represent the three key elements of the modern clean-diesel system: advanced engines, vehicles and equipment; cleaner diesel fuel; and emissions-control systems.
