The Global Diesel Engine Market size was valued at USD 6.30 Billion in 2022 and is expected to surpass USD 9.77 Billion by 2031, expanding at a CAGR of 5% during the forecast period, 2023–2031. The growth of the market is attributed to the increasing standard of living, rising industrialization, and growing demand for backup power.
The air is compressed inside a cylindrical vessel to ignite the fuel in a diesel engine, which uses internal combustion technology. The fuel's chemical energy is converted into mechanical energy, which is then utilized to power things like freight trains, locomotives, big ships, and other vehicles. Diesel engines are becoming popular among end users because they provide enhanced performance and high fuel efficiency.
COVID-19 Impact On Diesel Engine Market
The Covid-19 pandemic affected the demand and supply of the diesel engine market. Lockdown across the globe, supply chain disorders, and oscillating supply of raw materials forced manufacturers to shut down production leading to an unfortunate decline in market growth. Launch of vaccines to combat the Covid-19 pandemic is expected to contribute to the market growth over the forecast period.
Diesel Engine Market Dynamics
The market research report on the global diesel engine market provides a detailed analysis by focusing on revenue growth, facts, figures, and historical data to determine major drivers, existing restraints, key opportunities, and competitive analysis. The report includes recent developments that can shape the overall performance of the market during the assessment period, 2022 to 2030.
Drivers: Escalating demand for dependable and uninterrupted power
For any nation to experience growth, electricity is a vital resource. According to the EIA's International Energy Outlook 2019, global energy demand is anticipated to rise by 2.11% annually until 2040. Non-OECD nations like China and India are estimated to account for a key share of the market growth. However, due to COVID-19 and the consequent economic crisis, the short-term electricity demand in 2020 declined by 5%. Demand is projected to decline by 2% in the case of a fast recovery. Developing regions experience power outages and blackouts, while developed regions have more voltage fluctuations and brownouts.
Restraints: The availability of alternative sources of energy is projected to impede the market growth
In many industrialized nations, energy sources like SOFC cells, solar PVs, renewable energy, batteries, and fuel cells serve as substitute sources of power generation and storage. For instance, in the US, the need for effective power generation has been growing as more businesses look for ways to lower their electricity and heating bills.
Energy efficiency for solid oxide fuel cells is about 60% as compared to other technologies such as reciprocating engines whose efficiency is less than 35%. Additionally, the cost of energy production per unit has decreased due to the expansion of renewable energy sources like solar and wind. Diesel power generation costs are two to three times higher than those associated with renewable energy sources.
To comply with environmental requirements and limit emissions, strict governmental standards have been implemented for diesel fuel globally. The US EPA specified that the ultra-low Sulphur diesel standard to be used for non-road diesel engines. The primary difficulty facing generator producers is lowering pollution levels while maintaining performance standards. Numerous manufacturers introduced new goods in 2018–20 that meet these exacting requirements.
Opportunities: Increasing hybrid electricity generation in remote and rural areas
Hybrid power generation can supply the needed electricity to off-the-grid or remote places including telecom towers, isolated industrial facilities, tiny communities, islands, and more. Most of the off-grid locations are in developing nations like Asia Pacific and Africa, where electrification is not universal. According to World Energy Outlook, in Sub-Saharan Africa, the electrification rate is 35%, but only 19% of the rural areas are electrified, leaving 550 million people without access to electricity.
Due to the absence of grid networks in countries in Asia Pacific, nearly 600 million people stay without access to electricity. Grid network construction in these areas is expensive and necessary for achieving 100% electrification. Hybrid power solutions using diesel generators and renewable energy sources are used to meet the energy needs of such remote installations.
Scope of the Diesel Engine Market Report
The report on the global diesel engine market includes an assessment of the market trends, segments, and regional markets. Overview and dynamics have also been included in the report.
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Attributes
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Details
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Report Title
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Diesel Engine Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
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Base Year
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2022
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Historic Data
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2016–2021
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Forecast Period
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2023 – 2031
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Segmentation
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Power Ratings (Below 0.5 MW, 0.5–1 MW, 1.0–2 MW, 2.0–5 MW, and Above 5 MW), Operations (Peak Shaving, Prime /Continuous, and Standby), and End-users (Residential, Commercial, and Industrial)
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Regional Scope
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Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
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Report Coverage
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Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
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Key Players Covered in the Report
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AGCO Corporation; AGCO Corporation; BorgWarner Inc.; Bosch; Caterpillar Inc.; Continental AG; Cummins Inc.; Deere & Company; Delphi Automotive; FAW Group Corporation; Fiat Powertrain Technologies S.p.A.; Ford Motor Company; General Motors Company; Isuzu Motors Ltd.; MAN SE; Mitsubishi Heavy Industries, Ltd.; Robert Bosch GmbH; Rolls-Royce Motor Cars Limited; and Wartsila Corporation
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Diesel Engine Market Segment Insights
The 0.5–1 MW segment is projected to expand at a high CAGR during the forecast period
Based on power ratings, the market is segregated into below 0.5 MW, 0.5–1 MW, 1.0–2 MW, 2.0–5 MW, and above 5 MW. The 0.5–1 MW segment is projected to expand at a high CAGR during the forecast period. The primary consumers of diesel power engines in this size range include small-scale datacenters, hospitals, commercial complexes, residential facilities, and others. The major energy consumers in office buildings and commercial complexes are lighting and HVAC loads.
According to the Global Commercial Real Estate Report, Investments in commercial real estate in Europe totaled EUR 264 billion in 2018, and market growth is anticipated to continue. The demand for backup power for business areas is anticipated to rise along with growing commercial real estate investments, which would help fuel the market for diesel engines.
The standby segment is estimated to grow at a rapid pace during the projected period
On the basis of operations, the market is fragmented into peak shaving, prime/continuous, and standby. The standby segment is estimated to grow at a rapid pace during the projected period. End users rely on standby diesel engines to provide emergency power. The user can depend on the diesel-engine powered gensets to temporarily meet the demand in the event that the grid's power supply is lost.
Growth of the segment is attributed to the absence of widely applicable, commercially viable alternatives for backup power sources, low initial cost of diesel engine-powered generators, and quick start capability. The market for diesel engines is projected to be fueled by rising industrialization in Asia-Pacific and rising data center investments in Europe and North America.
The commercial segment to account for a key market share in the coming years
In terms of end-users, the market is divided into residential, commercial, and industrial. The commercial segment is expected to account for a key market share in the coming years owing to increasing investments in the commercial sector, especially in datacenters and hospitals. Over USD 70 billion was spent on capital projects by companies such as Facebook, Apple, Alphabet, Amazon, and Microsoft. For datacenters to remain operational despite interruptions in the main power grid supply, emergency backup power is necessary. These advancements are anticipated to fuel the commercial segment.
The industrial segment is anticipated to dominate the market during the forecast period. The industrial sector often uses more energy for its commercial operations. The diesel engine improves the quality of the power supply and provides better reliability. Diesel engine usage is rising as a result of robust industrial expansion and the development of commercial infrastructure. Major industries that heavily rely on the power produced by diesel engines include data centers, telecommunication, oil & gas, healthcare, manufacturing, and construction sector.
Power outages in the manufacturing sector resulting in low volume production and the sale of substandard quality products. In industrial sectors, blackouts usually impact all processes. Therefore, the industrial units rely on diesel engines, which function as the best power source, to prevent such failures. The industrial segment is therefore anticipated to dominate the diesel engine market during the forecast period based on the aforementioned aspects.
Asia Pacific to hold a key market share
Based on regions, the market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is estimated to hold a key market share during the projected period. Growth of the market in the region is attributed to the increasing standard of living, urbanization, and growing population are expected to drive the market. The demand for dependable backup and primary power supply for commercial buildings, enterprises, and end users in this area is anticipated to drive the diesel engine market.
Developing nations with poor power infrastructure, such as India and China, are anticipated to face significant challenges in maintaining a continuous supply of electricity due to the tremendous increase in power consumption in these nations.
Segments
The global diesel engine market has been segmented on the basis of
Power Ratings
- Below 0.5 MW
- 0.5–1 MW
- 1.0–2 MW
- 2.0–5 MW
- Above 5 MW
Operations
- Peak Shaving
- Prime /Continuou
- Standby
End-users
- Residential
- Commercial
- Industrial
Regions
- Asia Pacific
- North America
- Latin America
- Europe
- Middle East & Africa
Key Players
- AGCO Corporation
- BorgWarner Inc.
- Bosch
- Caterpillar Inc.
- Continental AG
- Cummins Inc.
- Deere & Company
- Delphi Automotive
- FAW Group Corporation
- Fiat Powertrain Technologies S.p.A.
- Ford Motor Company
- General Motors Company
- Isuzu Motors Ltd.
- MAN SE
- Mitsubishi Heavy Industries, Ltd.
- Robert Bosch GmbH
- Rolls-Royce Motor Cars Limited
- Wartsila Corporation
Competitive Landscape
Key players competing in the diesel engine market include AGCO Corporation; AGCO Corporation; BorgWarner Inc.; Bosch; Caterpillar Inc.; Continental AG; Cummins Inc.; Deere & Company; Delphi Automotive; FAW Group Corporation; Fiat Powertrain Technologies S.p.A.; Ford Motor Company; General Motors Company; Isuzu Motors Ltd.; MAN SE; Mitsubishi Heavy Industries, Ltd.; Robert Bosch GmbH; Rolls-Royce Motor Cars Limited; and Wartsila Corporation.
Some of these players are using several market strategies such as mergers, partnerships, capacity expansion, collaborations, acquisitions, and product launches to enhance their market shares, generate revenue, and raise their production line of business in the coming years. For instance,
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