Macro-economic downturn and high interest rates cause forklift order books to stagnate in 2024.
The majority of forklifts will be powered by lithium-ion (li-ion) batteries by 2034.
ICE forklift market demand to shrink to 500,000 units by 2034.
According to the latest research by Interact Analysis, the forklift market is not performing as well as initially expected in early 2024. This has led the global market intelligence specialist to reduce its shipment forecast by around 3% in its latest research report. As a result of the struggling economy in Europe and the slow release of project funding in the US, the short-term outlook for the market is bleak. Despite this pessimism, robust and consistent growth of around 4-5% is expected out to 2034.
A challenging climate short-term, but long-term outlook remains positive
In the short term, forklift shipments are expected to grow by just 0.3% in 2024 as a result of rising interest rates and the global economic downturn. The European economy has stagnated during the second half of 2024, with two of the leading industry sectors for forklifts – automotive and logistics – struggling. While we expect to see some recovery in 2025, order volumes for the global forklift market will be slightly lower than shipment volumes over the next few years as order backlogs from the pandemic have now been absorbed.
On a more positive note, 3 million forklifts are forecast to be shipped per year by 2031 as enterprises are forced to reduce their dependence on manual labor. Interact Analysis has observed that major forklift OEMs are continuing with their long-term expansion plans, while other manufacturers that are affected by demand fluctuations are much more cautious with spending on automation projects.
ICE forklift market to shrink as electric forklift market expands
Demand for Li-ion battery-powered forklifts is increasing, while internal combustion engine (ICE) and lead-acid battery-powered forklift growth is beginning to decline. Despite a bleak 2024 for the market overall, the Li-ion battery forklift market experienced a growth rate of over 10%, compared with a decline for ICE alternatives of 1% and a fall of around 7% for lead-acid powered variants. The downward trend for the ICE forklift market is expected to continue over the next decade, with annual market demand shrinking over 20% from 670,000 units in 2024 to 500,000 units by 2034.
The factors driving demand for electrified forklifts vary between emerging and mature markets. For example, in mature markets such as Europe there is a much greater push towards the promotion of cleaner alternatives, leading to strengthening of environmental policies. This has significantly influenced the design strategies of many forklift manufacturers. Therefore, demand for electric forklifts in Europe is gradually increasing, although economies of scale have not yet been reached to reduce the cost of alternative power sources such as fuel cells and lithium-ion batteries. Additionally, mature markets have seen a significant shift in the primary customer base for forklifts — from manufacturing to logistics and warehousing — due to the rise of e-commerce.
In emerging markets, labor costs are creating a growing need for automation in factories, especially in China, India and Eastern Europe. While sales of ICE forklifts are rising in these countries, demand for electric forklifts is outpacing this growth. Additionally, lithium-ion battery production is primarily based in Asia, meaning the average cost of equipping forklifts with li-ion batteries is much lower than the rest of the world. By 2034, Interact Analysis predicts 81% of fully electric forklifts will be powered by li-ion batteries.
Maya Xiao, Research Manager at Interact Analysis comments, “Although the short-term outlook for the forklift market remains bleak, there are reasons for optimism. Demand for electric forklifts is increasing fast, while sales of ICE models are falling. By 2034, the market will be largely dominated by alternative power types with 80% of the electrified forklift market powered by li-ion batteries and 20% by lead-acid batteries.”
