The global electric ship market was valued at USD 6 billion in 2023 and grew at a CAGR of 20% from 2024 to 2033. The market is expected to reach USD 37.15 billion by 2033. The rising focus and emphasis on environmental sustainability will drive the growth of the global electric ship market.

Market Introduction:

An electric ship is a marine vessel designed mainly to operate with electric-powered propulsion, either in place of or in conjunction with conventional oil burning engines. These ships employ electric motors as a form of propulsion which by its efficiency are far better and environmentally friendly as compared to the gasoline combustion engines. The energy for these electric motors is sourced from many places including large lithium-ion battery packs, hydrogen fuel cells or a Li-ion battery pack boosted by other forms of power. They lower or eradicate the use of fossil fuels, a major contributor to climate change, thereby, reducing greenhouse gas emissions. Moreover, electric ships cost less to operate because they acquire the equipment for lower rates and they use less fuel and require less energy to be spent on maintenance. They also provide more comfort and less noise as well as less vibration compared to conventional vessels with positive effects for passengers and crews on board.

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Recent Development

• The Greenwater 01, an all-electric container ship built by the state-owned China Ocean Shipping Group (Cosco), is currently on a regular service route between Shanghai and Nanjing. The Greenwater 01 uses 3,900 kg (8,600 lb) of fuel per 100 nautical miles sailed thanks to its battery-powered propulsion system. LFP cells make up the ship's primary battery pack, which has a capacity of more than 50,000 kWh. For longer trips, the ship has room for more battery boxes. Each battery box, which is about the size of a typical 20-foot container, can hold 1,600 kWh of electricity. The Greenwater 01 can carry 24 battery boxes and finish a trip that uses 80,000 kWh.

Market Dynamics:

Drivers

The growing focus and emphasis on environmental sustainability – The main driving forces of the electric ship industry are environmental regulations focusing on sustainability. More and more organizations, authorities and governments are focusing reducing greenhouse gas emissions and combating climate change. for instance, the International Maritime Organization (IMO) has envisaged a strategy to reduce the absolute total carbon dioxide emissions from international shipping by at least 50% by 2050. Such regulations are encouraging the development of cleaner technologies like electric ships. Beside the IMO other regional and national government bodies are also developing their emission reduction plans, and such plans. These plans/measures compel operators of ships to shift to electric boats, which emit close to negligible greenhouse gases and or none at all. In addition, environmental responsibility and sustainability has become an important business goal. Furthermore, Companies are being pressurized by stakeholders to embrace environmentally friendly practices. With the current ever-changing regulations, electric ships are expected to have a central function in the alteration of the maritime industry into a sustainable one.

• The Office of Naval Research, in partnership with Arizona State University, has awarded electrical engineering professor Robert Cuzner a five-year, $1.2 million grant to further develop a virtual prototyping process. Cuzner is developing a modelling tool that will assist naval architects in making decisions in a setting where the electrical systems' physical space requirements aren't the only consideration.

Restraints:

The high initial costs – high initial costs make adoption of electric ships difficult. Both electric propulsion systems and the needed energy storage solutions like large lithium-ion batteries or hydrogen fuel cells, have rather high initial costs. Electric ships are far more complex and innovative creations than conventional oil-burning boats and require cutting-edge and highly specialized gear that is as yet in its infancy and not manufactured on an industrial scale, making them rather expensive. The complexity is higher in terms of manufacturing and integration, which makes the total capital investment for electric ships more costly to ship owners and especially to industries like shipping and logistics that deal with high level of competitive costs for their operations.

Opportunities:

Government support and incentives – Technological improvements in electric ships have made significant improvements in battery technology, propulsion system and energy control. The greatest advancement has been made to lithium-ion batteries with increased energy density and rates of charging meaning that electric ships can now travel longer durations without tackling efficiency. The battery systems have also been developed and made lighter; which have impacted positively on the weight of the vessel, performance and costs. They are also developing the solid-state batteries and other variants, which offer enhanced and safe energy densities. Also, the variable and integrated forms of propulsion which employs electrical motors in conjunction with traditional engines of commensurate capacity have been adopted giving the ability to switch back and forth based on operating circumstances. Such a combination minimises fuel use and emissions but conserves the energy required for longer distances. Therefore, the technological advancements in components, materials, equipment and technologies used in electric ships will drive the market’s growth and development during the forecast period.

Regional segmentation analysis:

The regions analyzed for the market include North America, Europe, South America, Asia Pacific, the Middle East, and Africa. Europe emerged as the most significant global electric ship market, with a 36% market revenue share in 2023.

Europe dominates the electric ship market due to the increased environmental conservation measures, enhanced government support, and the increased need for green shipping solutions. The European Union has set high standard for emission control. Additionally, the European countries are the most advanced with regard to electric ships especially countries like Norway, Denmark, and Netherlands. These nations have established increased incentives and subsidies for electric vessels. Furthermore, the majority of European ports today either already have or are either developing infrastructure that will enable electric ships to operate on longer voyages and enhance the possibility of electrifying the maritime industry. Currently, Europe consists of countries recognised as leading electric ship innovative projects and partnerships between shipyard builders, energy suppliers, and governments due to a favourable EU legal framework regarding the use of green technologies and sustainable energy sources. Europe also has a higher awareness and support for the maritime industries based on sustainability, and customers are now seeking sustainable travel solutions.

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• The recently constructed Rescue 1500-class firefighting and rescue boat, which incorporates a hybrid waterjet propulsion system, was delivered to the City of Kiel Fire Department in Germany. The 16-by-4.8-meter boat, named Dat Füürschipp, was built by the Finnish shipyard Kewatec and is intended for use in civil protection, firefighting, disaster response, and at-sea rescues in the Kiel Canal and Kiel Fjord as well as up to 10 nautical miles off the coast of Germany. The e-FiFi 1470 design from Kewatec served as the model for the Rescue 1500.

Vessel Type Segment Analysis

The vessel type segment is divided into passenger ferries, cargo ships, fishing boats, and naval and military ships. The passenger ferries segment dominated the market, with a market share of around 38% in 2023. Passenger ferries use relatively short distances with more definite schedules, and thus, suitable for battery-powered propulsion systems that are still restricted in their range as compared to conventional fuel systems. Many of these vessels work in the coastal zones where measures concerning environmental impact are more stringent. In addition, improved charging technologies and capabilities where the electric ferry can cover a longer distance before recharging and reduced charging duration also contribute to the segment’s growth. Electric ferries have no emissions and are silent. Furthermore, most cities and regions, primarily in Europe, have already introduced government incentives and subsidies to switch to electric ferries, which also contributed to their adoption. Furthermore, electric ferries also offer a far more cheaper means in the short-run as well as in the long-run as they will require relatively low Operating and Maintenance costs as compared to the fuel-powered vessel.

• During the ship's commercial trials, Singapore's first totally electric cargo vessel, the Hydromover, carried the cargo of maritime services provider Wilhelmsen Ships Service (WSS), making them the first firm to do so. According to reports, this successful electric cargo transfer from the Wilhelmsen Ships Service jetty at Pandan Loop to the receiving vessel M/V Wadi Almalekat at the Eastern Anchorage AEBB area is a significant step towards decarbonising Singapore's port operations. It was made possible by OPL Services, the first harbour craft operator to test the Hydromover. Wilhelmsen Ships Service's dedication to promoting sustainability in marine logistics is demonstrated by its early adoption of the Hydromover.

Power source Segment Analysis

The power source segment is divided into battery-powered ships, fuel cell-powered ships and hybrid systems. The battery-powered ships segment dominated the market, with a market share of around 43% in 2023. The first and foremost strength of battery-powered ships is that they do not emit any pollutants into the atmosphere. Lithium-ion batteries have grown in energy density and now ships are able to travel further distances which increases its appeal and contributes to its greater adoption. Battery-powered ships also have added advantages of have lower operation costs in comparison to those powered by traditional fuels. They are low maintenance machines since they contain few parts in the propulsion system, and they are not expensive to run hence financially beneficial in the long run. Furthermore, battery-operated vessels are less noisy than conventional vessels with less vibratory impact on the vessels and hence are more customer friendly when it comes to passenger ships and do not pollute the environment. One of the biggest advantages of batteries is that they are easy to install in vessels. The persistent encouragement of governments all over the world to adopt cleaner systems and advances in battery technology will see battery-powered ships as the leading segment of electric ships market.

• The MV Dirac, a new hydrogen-electric workboat that was just launched in Exmouth Harbour, was put through trials by the Exeter Port Authority. The Ecomar team has finished installing important power system components while the boat is afloat, bringing the Ecomar-developed vessel closer to completion. The boat is now in the latter stages of fitting out after being launched into Exmouth Harbour. While she is floating, a team from Ecomar Propulsion is working to install the final components on a cutting-edge new power system. The vessel, MV Dirac, has the name of Paul Dirac, one of the best scientists in the United Kingdom, who was awarded a Nobel Prize for his contributions to quantum physics.

Some of the Key Market Players:

• Tesla, Inc.
• Wärtsilä Corporation
• ABB Ltd.
• Siemens AG
• Cargill, Inc.
• Kongsberg Gruppen
• Schottel GmbH
• DNV GL
• Rolls-Royce Holdings plc
• Mitsubishi Heavy Industries, Ltd.
• Van Oord
• Norled AS

Report Description: