SCAGE’s latest Heavy Duty Truck, the Andromeda SCAGE Future
Once dismissed as little more than a gimmick, electric vehicles (EVs) have exploded in growth. Since 2019, the percentage of new cars sold that are electric has experienced an eleven-fold increase . Furthermore, companies like Tesla and BYD have captured consumers’ attention and large swaths of market share away from traditional carmakers.
BYD and Tesla have more than double the EV sales of their closest competitors CJPA Global Advisors
Meanwhile, the sales of gas-powered cars peaked in 2017-2018, with their share in total car sales decreasing steadily.
Non-electric cars have experienced decreasing market share, even in years when overall car sales declined. Published by Hannah Ritchie of Our World In Data in May 2025
With sales figures and new developments like robotaxis dominating headlines, investors can be forgiven for buying into passenger electric vehicle hype. However, doing so risks passing over a promising segment of the EV market: commercial vehicles. Specifically, Zero Emission Medium and Heavy Duty Vehicles, or ZE-MHDVs. Despite the unruly acronym, these trucks, vans, and buses play an important role in increasing business efficiency while cutting down on emissions.
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The Global Drive to Zero Memorandum of Understanding (MOU) signed by 40 countries highlights commercial vehicles’ outsized contribution to carbon emissions. Although standard MHDVs make up just 4% of on-road vehicles in the US, they account for ~25% of greenhouse gas emissions from transportation. The MOU highlights the participant nations’ intention to enable ZE-MHDVs to reach 30% of total MHDV sales by 2030, as well as a full transition by 2040.
These vehicles offer benefits beyond emissions reduction. The US Department of Energy (DOE) estimated that ZE-MHDVs would be “ cheaper to buy, operate, and maintain” than traditional diesel-powered models due to increased infrastructure investments, economies of scale, and systems like regenerative braking .
That said, there are still high barriers holding increased adoption back. Construction electric vehicles have price premiums as high as 50-100% , and long charge times still eat into efficiency. Furthermore, charging stations are still sparse in many regions, particularly in the US. In a survey by Electric Vehicle Charging & Infrastructure (EVCANDI), 86% of respondents reported minor to severe networking connectivity problems.
Although EV veterans and legacy carmakers are tackling these problems, smaller, upstart companies are looking to capitalize on the still-nascent potential of the ZE-MHDV industry to offer their own unique solutions.
SCAGE’s Edge In a Crowded Domestic Market
China’s ZE-MHDV market is the most developed in the world, with 81% of global sales being in the PRC. This in-line with the overall trend in electric vehicles, as China beat all other markets with over 10 million electric cars sold.
Map showing sales of electric cars by market. Published by Hannah Ritchie of Our World In Data in May 2025
Like with passenger vehicles, this advancement is largely due to China having the most advanced battery production infrastructure, “which allows local automakers to achieve cost parity and drive early adoption of EVs,” according to Yuqian Ding, Head of China Auto Research at HSBC. Combined with strong regulatory support, this has resulted in a booming electric vehicle market in China.
Within the ZE-MHDV market, trucks and tractor-trailers made up 80% of sales in 2024, whereas Buses and Coaches had decreased significantly to ~20%. This shows how trucks and tractor-trailers are the most quickly growing segment, while the latter category is maturing as municipal governments fully electrify their electric bus fleets and coach sales fall. The heavy and medium-duty truck market has room to grow. In 2024, heavy-duty diesel trucks made up 57% of heavy-duty sales, down from 70% in 2023, while trucks powered by natural gas made up 29% of total sales. Battery electric trucks were at 13% sales share. In that same year, medium-duty battery electric trucks nearly tripled their market share, reaching 22% market share by 2024.
The industry is also growing more concentrated. The combined market share of the top five Original Equipment Manufacturers (OEMs) was 54%, versus the 75% market share that the top five OEMs of heavy-duty internal combustion engine (ICE) trucks had. On a similar note, the top five OEMs of medium-duty ICE trucks had a combined 64% market share. Their five counterparts in the battery electric space had 53% market share. These top players are largely established companies like XCMG, SANY, Yutong, and Shacman, which have diverse lineups and usually make diesel-powered vehicles on top of electric ones.
SCAGE IPO Ceremony held at NASDAQ SCAGE
A promising challenger to these incumbents is SCAGE Future (NASDAQ: SCAG), which recently completed an initial public offering (IPO) on the Nasdaq stock exchange. Chao Gao, who co-founded automotive power system manufacturer Yueboo (SHE: 300742), started the company in 2019 to help decarbonize the global commercial transportation industry. Although its competitors generally have more options and even comparable specs, SCAGE has a few key differentiators. Their lineup, although small, is focused on mining and freight trucks, allowing them to develop specialist expertise. The vehicles have relatively high payload sizes and nigh-unmatched range. For example, their Galaxy II tractor trailer has a maximum range of 2,000 km.
Beyond vehicle specs, SCAGE’s unique value proposition lies in their plans to manufacture hydrogen refueling station (HRS) infrastructure. These stations are for vehicles powered by hydrogen fuel cells , which use hydrogen to produce electricity. Due to the underdeveloped state of HRS (Hydrogen Refueling Station) infrastructure, SCAGE has a tremendous opportunity as a first mover. There were just 1,369 HRS globally in 2024, with 80% being concentrated in just five countries: China, South Korea, Japan, France, and Germany. This pales in comparison to the millions of public charging points and gas stations worldwide.
SCAGE looks to combine their vehicle production with HRS infrastructure in an ambitious two-phase plan. First, produce competitive vehicles and build a brand. Then, scale up building of HRS to offer customers a package deal of great machines and support infrastructure. This is similar to Tesla’s strategy of building charging stations that are most compatible with their own cars. Although Tesla has “Magic Docks” that allow any EV to charge, these are not included in every station. Users will experience the most consistent and convenient service at Tesla charging ports if they also drive a Tesla vehicle. SCAGE can employ a similar strategy as a first mover in the still-young hydrogen fuel space, inducing customers to get hooked on their ecosystem, instead of just their vehicles. Ethan Guo, Cofounder of SCAGE, is confident that “SCAGE has the determination, drive and fortitude to compete with the best EV Trucks in the world.”
Einride: Outsourced Manufacturing, In-House Software
Compared to China, the EU’s ZE-MHDV market is underdeveloped. The European commercial vehicle market overall faced declines in new registrations for vans, trucks and buses. That said, the EU is still ahead of the US in electric vehicle uptake , making it a robust “middle market”. Furthermore the rate of increase in charging points rose from 34% to 37% from 2023 to 2024.
The EU’s EV uptake has consistently been almost double that of the U.S. Published by Martin Armstrong of Statista on May 12, 2022.
And unlike China, which has electrified most of its bus fleets already, electric bus fleets in Europe are still growing. Germany and Sweden have seen strong growth in electric bus growth compared to diesel, “which still dominates but is losing ground.” Electric vans are seeing slower adoption compared to buses due to high upfront cost, limited model availability, and underdeveloped infrastructure. Spain is a notable exception, which marked “ marginal increases ” in electric van adoption. In another difference from China, medium and heavy-duty trucks have reported declines in registrations, especially in France and the Netherlands. Megawatt charging standards (MCS) and high-capacity batteries offer room for additional growth in this sector. Overall, the Europe market has potential but requires more infrastructure development to see commercial EV adoption level on-par with China.
Although traditional carmakers are producing ZE-MHDVs, such as the Volvo FH Electric and the Mercedes eActros, new players are looking to capture market share. Einride (meaning “lone rider”, which references the Nordic god Thor), a Swedish producer of electric autonomous trucks is a fast-growing alternative. The ~400 employee company doubled its revenue in 2024 to SEK 500 million (≈ $52.3 M) and raised $~654 million in funding, indicating strong investor support. Founded by former Volvo engineer Robert Flack and now headed by former CFO Roozbeh Charli, Einride’s value proposition goes beyond manufacturing vehicles. Although the company produces flagship trucks (the Pod/AET) with OEMS like BYD and Peterbilt, it offers a proprietary self-driving system. An example of this “outsourced manufacturing, in-house software” approach is when Danish shipping company Maersk bought 300 BYD-manufactured trucks using Einride’s self-driving system.
The company’s success has not gone unnoticed. It is reportedly in talks to list in the US in autumn of 2025, at a valuation of more than $5 billion . Currently, main shareholders include private equity stalwart EQT and US-based Capital Group. The company is reportedly seeking capital to raise at least $200 million in pre-IPO fundraising to “capitalise on the strong interest in autonomous and artificial intelligence technology .”
Compared to Europe’s established automakers, Einride sticks out due to its flexibility. Unburdened by the capital-intensive need to manufacture its own vehicles, the company focuses on its strengths: its proprietary self-driving algorithms. Executives like Elon Musk have already highlighted growth potential for self-driving vehicles. Startups like Einride have a chance to capitalize on this growth potential by targeting specific niches within the autonomous vehicle market. Instead of chasing already-known categories like robotaxis, the company focuses on its own value-add.
Xos: The Case for Startups amid Tesla’s Dominance
The US market for electric vehicles is projected to reach a revenue of $95.9 billion this year, with sales increasing by 10% year-over-year (YoY) in Q1 2025. Despite Tesla’s previous dominance, growth was mostly driven by more traditional automakers like Porsche and Toyota, which reported 249% and 196% increases in volume respectively. Tesla, driven in part by Elon Musk’s controversial tenure at the Department of Government Efficiency (DOGE), reported a 13% decrease in sales as boycotts ate into the company’s profits.
Although much of the current conversation in the US is geared towards the robotaxis and hybrid cars’ surprising staying power , ZE-MHDVs have been growing under the radar. Despite widespread discontent against its passenger vehicles, Tesla’s Semis are a trusted pick for companies looking to electrify their fleets due to their 500 mile range. PepsiCo is a notable adopter of these Semis, using the vehicles to reduce their carbon footprint.
One challenger to Tesla’s dominance is Xos, (NASDAQ: XOS), which reported a 25% revenue increase in 2024 despite experiencing a net loss of $50.2 million. Founded by trucking industry veteran Dakota Semler and consultant Giordano Sordoni, the company has a variety of medium and heavy-duty trucks, such as the MDXT and HDXT models. Its Xosphere platform, which allows for fleet management, battery monitoring and OTA updates, is a key part of their value-add.
The software suite simplifies tasks for clients and makes owning a Xos vehicle more efficient for operations. To complement this suite, he company also manufactures its own charging infrastructure (Xos Hubs) and powertrain (X-Platform). The company’s “jack-of-all” trades approach allows it to generate revenue from diverse streams.
The company has also secured some partnerships . It is a primary electric vehicle vendor for UPS and Fedex Ground, and is being adopted by utility / public sector customers like ABM, FP&L, and Caltrans. Despite challenges with profitability and Tesla’s dominance, Xos shows how young companies can utilize a diverse portfolio of services and public partnerships to achieve steady growth.
The Future Of Commercial Electric Vehicles
The ZE-MHDV market, despite being overshadowed by its more popular passenger vehicle cousin, is growing rapidly. Despite their specific value-adds, young companies still face challenges from more established traditional automakers and electric vehicle powerhouses. Although the commercial electric vehicle market grows more consolidated, there is still a chance for such upstarts; by focusing on specific niches and their unique strengths, these companies have a chance to capture still-available market share.
Special thanks to Jonah Kim for his research and editorial comments and for providing images.