Off Highway Vehicle Engine Market Size and Share
Off Highway Vehicle Engine Market Analysis by Mordor Intelligence
The Off Highway Vehicle Engine Market size is estimated at USD 47.94 billion in 2025, and is expected to reach USD 66.21 billion by 2030, at a CAGR of 6.65% during the forecast period (2025-2030). Increasing infrastructure spending, tighter emission rules, and rising mechanization across agriculture, mining, and material-handling applications are reshaping engine demand. Growth remains anchored in diesel technology but hybrid-electric and fuel-agnostic platforms are widening their footprint, helped by rapid progress in telematics, predictive maintenance, and compatibility with hydrotreated vegetable oil and renewable diesel fuels.
Key Report Takeaways
- By vehicle type, the construction equipment segment held 58.36% market share in the off-highway vehicle engines market in 2024, while electric compact loaders are advancing at a 6.27% CAGR through 2030.
- By power output, the 31-70 HP segment accounted for 64.51% market share in the off-highway vehicle engine market in 2024 and is expanding at 7.02% CAGR between 2025 and 2030.
- By fuel type, diesel engines retained an 89.71% share in 2024; hybrid-electric and fuel-cell powertrains represent the fastest segment, with a 5.39% CAGR to 2030.
- By engine displacement, 3.6-7 L units led with 46.38% revenue in 2024, whereas sub-2 L engines show the highest 6.12% CAGR during the forecast period.
- By propulsion technology, conventional ICE systems dominated with 87.62% share in 2024; battery-electric solutions are growing at 6.73% CAGR.
- By geography, Asia Pacific commanded 38.17% of revenue in 2024; Europe posts the strongest 7.19% CAGR through 2030.
Global Off Highway Vehicle Engine Market Trends and Insights
Drivers Impact Analysis
Driver | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
---|---|---|---|
Massive global infrastructure pipeline | +1.8% | Global, concentrated in G7 and BRI corridor countries | Long term (≥ 4 years) |
Growing mechanization of agriculture | +1.2% | Asia-Pacific core, Sub-Saharan Africa expansion | Medium term (2-4 years) |
Stricter Stage V / Tier 5 norms | +0.9% | North America and EU, spillover to Asia-Pacific | Short term (≤ 2 years) |
OEM shift to modular hybrid-ready engine | +0.7% | Global, led by North America and Europe | Medium term (2-4 years) |
Telematics-driven predictive maintenance | +0.5% | North America and EU, expanding to Asia-Pacific | Medium term (2-4 years) |
HVO/renewable-diesel compatibility | +0.4% | EU and North America, selective Asia-Pacific markets | Long term (≥ 4 years) |
Source: Mordor Intelligence
Massive Global Infrastructure Pipeline (G7 & BRI)
The USD 1.2 trillion Infrastructure Investment and Jobs Act is driving annual construction equipment sales growth of 10% across the US Midwest states. Parallel investments under China’s Belt and Road Initiative stimulate demand for heavy excavators and bulldozers across Africa, Southeast Asia, and Eastern Europe. Chinese exporters shipped more construction machines abroad than they sold domestically for the first time in 2023, rebalancing global supply chains and reinforcing volume in the off-highway vehicle engine market. Multi-year funding windows enable manufacturers to scale capacity and refine hybrid-ready designs with confidence.
Growing Mechanization of Agriculture in Asia-Pacific and Africa
Tractor penetration reached 74% of South Asian farms in 2024, while water pumps and threshers exceeded 65% adoption. Rising rural wages across India and China push farms toward capital-intensive practices, creating steady replacement demand in the 30-120 HP range. Sub-Saharan Africa still trails South America in mechanization, signaling a sizeable addressable pool for compact, fuel-efficient engines that perform reliably in harsh field conditions. Service-oriented business models allow smallholders to access machinery without ownership, broadening market reach for engine suppliers and further supporting the off-highway vehicle engine market.
Stricter Stage V / Tier 5 Norms Triggering Pre-buy & Retrofit Cycles
California aims to cut NOₓ by 90% and PM by up to 75% for engines above 19 kW starting from 2029. Similar Stage V rules in the EU already spurred pre-buy surges in 2024, particularly for 56-130 kW equipment. Komatsu reports over 90% passive regeneration efficiency from its Diesel Particulate Filter strategy, giving fleet owners retrofit options that avoid early scrappage. These regulations accelerate R&D in selective catalytic reduction, onboard diagnostics, and hydrogen-capable ICE designs, keeping compliance at the center of product roadmaps across the off-highway vehicle engine market.
OEM Shift to Modular Hybrid-Ready Engine Platforms
Manufacturers led by Cummins and AGCO Power are launching families that accept diesel, HVO, ethanol, or hydrogen without chassis redesign. The HELM™ platform integrates a common block, controls, and auxiliaries while allowing variable after-treatment packs.[1]Cummins Inc., “HELM™ Technology Overview,” cummins.comThis modularity trims development costs, shortens certification lead times, and lets rental fleets standardize parts across mixed-fuel inventories. Hybrid-ready provisions for e-motors and battery modules also future-proof investments, safeguarding the competitiveness of the off highway vehicle engine market amidst electrification.
Restraints Impact Analysis
Restraint | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
---|---|---|---|
Accelerating electrification | -1.1% | North America and EU, expanding globally | Medium term (2-4 years) |
Escalating after-treatment cost | -0.8% | Global, acute in emerging markets | Short term (≤ 2 years) |
Commodity-price volatility | -0.6% | Global manufacturing hubs | Short term (≤ 2 years) |
Rental fleets extending overhaul intervals | -0.3% | North America and Europe | Medium term (2-4 years) |
Source: Mordor Intelligence
Accelerating Electrification of Compact Equipment
Electric wheel loaders captured 10% of Chinese sales in 2024, with 6,000–7,000 electric construction machines sold worldwide. Cost parity achieved by several Chinese OEMs pressures legacy engine providers in the sub-100 HP class. European urban zones restrict diesel, accelerating battery adoption for indoor demolition and waste-handling tasks. However, long-haul mining, forestry, and 24-hour quarry operations still rely on diesel due to energy density and quick refueling needs, preserving core demand inside the off highway vehicle engine market.
Escalating After-treatment Cost vs. Price-Sensitive Buyers
Stage V filters and close-coupled SCR systems add USD 1,800–3,200 to heavy-duty engines, lifting unit prices by up to 25%. Smaller rental houses and contractors in Southeast Asia often defer upgrades or turn to used Tier 3 imports, slowing unit sales. Maintenance complexity also rises, requiring technicians skilled in urea dosing and periodic ash cleaning. Suppliers must tailor lower-spec variants for markets that lack enforcement, balancing compliance with affordability in the off highway vehicle engine market.
Segment Analysis
By Vehicle Type: Construction Equipment Dominates While Mining Rebounds
Construction equipment generated 58.36% of 2024 off-highway vehicle engine market revenue, a position fortified by government stimulus in roads, bridges, and transit systems. Asia Pacific megaprojects, together with the US funding surge, sustain demand for excavators, dozers, and loaders that rely on 121-400 HP blocks. Mining equipment shows renewed momentum because copper, lithium, and nickel projects expand to meet battery supply chains. Forestry and materials-handling niches favor engines like the John Deere PowerTech™ PSS 9.0 L delivering up to 330 hp in steep terrain. Electric compact loaders post a 6.27% CAGR, illustrating early electrification success where duty cycles and charging access are predictable. Nevertheless, high-horsepower diesel remains essential for round-the-clock mining shovels and underground haulage, upholding volume in the off highway vehicle engine market.
Compact construction fleets in Europe adopt telematics to trim idle hours, cutting fuel burn by 12% and extending overhaul intervals. Asian rental operators prefer modular engines with easy service access, keeping downtime low on busy urban sites. Belt and Road projects in Africa pull demand for mid-range 90-200 kW engines that balance fuel efficiency and toughness. Mining majors in Latin America request EU Stage V compliant powertrains to future-proof assets against tightening local rules. Together, these dynamics keep construction equipment in pole position while mining gradually widens its share of the off highway vehicle engine market.
Note: Segment shares of all individual segments available upon report purchase
By Power Output: 31-70 HP Mid-Range Engines Lead Growth Trajectory
The 31-70 HP category held 64.51% of off-highway vehicle engine market share in 2024 and records a 7.02% CAGR to 2030, fueled by compact excavators, skid-steers, and mid-size tractors used in rice paddies and horticulture. Urban densification calls for maneuverable machinery that fits narrow streets and reduces collateral damage on finished surfaces. OEMs integrate start-stop functions and advanced fuel maps, claiming double-digit consumption cuts that appeal to fleet managers. Telematics platforms visualize idle time and enable over-the-air parameter tweaks to meet local noise or emission constraints without dealership visits.
Higher brackets above 400 HP serve mining trucks and large hydraulic shovels, segments where Caterpillar’s 3512B-EUI at 1,450 hp remains a benchmark. Despite lower unit volumes, these engines command premium pricing and aftermarket parts revenue. Conversely, sub-30 HP platforms suffer most from electrification encroachment because battery packs now deliver full-shift performance for lawn care, golf course, and small municipal tasks. The resulting polarization directs R&D spending toward mid-range products that anchor the off highway vehicle engine market while preserving high-horsepower prestige lines.
By Fuel Type: Diesel Retains Scale yet Alternatives Gain Share
Diesel controlled 89.71% of off-highway vehicle engine market share in 2024 due to unmatched energy density and a ubiquitous refueling network. Cummins endorses 100% HVO use across its high-horsepower lineup, promising up to 90% greenhouse gas savings. California already mandates renewable diesel for state off-road fleets, illustrating policy alignment that supports low-carbon liquid fuels. Hybrid-electric and fuel-cell stacks grow at 5.39% CAGR because quarry loaders, port cranes, and metropolitan transit projects test battery-diesel hybrids to cut idle emissions while retaining peak torque. Gasoline occupies a small niche in light utility vehicles and specialized aerial work platforms, though cost improvements in lithium iron phosphate batteries threaten its longevity.
Fuel diversification ensures that engine builders offer configurable injection pressures, dual-fuel kits, and software updates to accommodate regional blend limits. This flexibility helps defend diesel volumes while smoothing the transition toward net-zero objectives in the off highway vehicle engine market.
By Engine Displacement: 3.6–7 L Blocks Strike Power-Efficiency Sweet Spot
Units between 3.6 L and 7 L captured 46.38% of off-highway vehicle engine market share in 2024, supporting backhoes, sugar-cane harvesters, and 70-ton excavators that require sustained torque yet must watch fuel bills. Caterpillar’s C13D 13-L platform lifts power by 20% and torque by 25% versus its predecessor, showing OEM appetite for denser output in the same package envelope. Below 2 L, sales grew 6.12% CAGR because Japanese mini-excavators and European compact tractors apply advanced EGR-free combustion and unitized injection to meet Stage V without particulate filters. Above 7 L, mining haul trucks and large scrapers seek higher displacement units for reliability under continuous 100% load factors.
Emissions legislation nudges OEMs to downsize where possible, pushing turbochargers, higher cylinder pressures, and cooled EGR to reclaim lost power. At the same time, renewable fuels and dual-stage injectors extend the life of bigger blocks serving the high end of the off highway vehicle engine market.

Note: Segment shares of all individual segments available upon report purchase
By Propulsion Technology: ICE Dominance Persists as Batteries Gain Foothold
Conventional ICE systems generated 87.62% of 2024 off-highway vehicle engine market share, as battery packs remain heavy and expensive for duty cycles exceeding eight hours. Battery-electric growth at 6.73% CAGR concentrates in municipal, waste-handling, and indoor demolition jobs with access to three-phase charging. European ports adopt hybrid reach-stackers that harvest braking energy to slash fuel use by almost two fifth of the overall usage. OEMs design interchangeable components: an ICE model and its battery sibling share cabs, chassis, and hydraulics, simplifying procurement for rental houses.
Hydrogen fuel-cell prototypes demonstrate promise for 400 kW mining loaders where batteries fall short. Yet infrastructure costs keep deployments marginal through 2030. In response, engine suppliers push E-fuels compatibility and methanol blends, widening product relevance while protecting revenue in the off highway vehicle engine market.
Geography Analysis
Asia Pacific retained 38.17% revenue in 2024 due to large-scale infrastructure programs and accelerating farm mechanization. China exported more construction equipment than it sold at home during 2023, cushioning domestic softness and creating a global channel for engines produced in Changsha and Xuzhou. India’s government subsidies improve tractor affordability, lifting 2025 retail volumes despite monsoon variability. Demand skews toward 31-120 HP units maneuvering in congested urban job sites or small farm plots. Regional OEMs favor modular engines certified for both Tier 3 and Stage V so they can ship to Africa or Europe without re-engineering, reinforcing the scalability of the off-highway vehicle engine market.
Europe, growing at 7.19% CAGR, benefits from Stage V compliance investments and the Green Deal’s focus on rail, renewable energy, and circular economy facilities. Customers prioritize particulate filters with passive regeneration and telematics, integrating carbon accounting dashboards. Komatsu’s Stage V portfolio demonstrates maintenance-free operation for a longer duration, a compelling proposition for rental firms facing tight utilization targets.[2]Komatsu Ltd., “Stage V Emission Solutions,” komatsu.eu European municipalities also pilot hydrogen ICE refuse trucks, supporting supplier R&D in alternative fuels.
North America capitalizes on the Infrastructure Investment and Jobs Act, which underwrites sustained engine demand for interstate highway revamps, bridge replacements, and port dredging. California’s forthcoming Tier 5 rules set the strictest global bar, pushing OEMs to test next-generation SCR and ammonia sensors several years ahead of enforcement. South America, the Middle East, and Africa represent high-growth but cost-sensitive regions. Currency headwinds and financing gaps limit immediate penetration yet offer upside as commodity cycles improve and multilateral lenders sponsor roads, power plants, and irrigation schemes that rely on reliable medium-horsepower engines imported from Asia or remanufactured in Brazil.

Competitive Landscape
The off highway vehicle engine market shows moderate concentration. Caterpillar, Cummins, and Deere command the largest installed base, protected by proprietary service software and broad dealer footprints. Cummins launched the HELM™ platform that hosts diesel, natural gas, and hydrogen variants on a common backbone, lowering client switching costs across fuels.
Caterpillar introduced the C13D 456–690 hp family, improving power density by 20% and torque by 25% compared with earlier models, which increases payload productivity per liter of fuel.[3]Caterpillar Inc., “C13D Engine Platform Brochure,” cat.com Deere emphasizes telematics through its JDLink™ cloud, which uploads operational data every five minutes, enabling predictive part replacements that cut unplanned downtime by 30%.
Chinese challengers such as Weichai and Yuchai leverage vertical integration and state financing to offer engines at price points 15–20% below Western peers, particularly in Belt and Road projects. European specialists including AGCO Power and Deutz focus on Stage V compliance and hybrid modules, partnering with battery firms to offer turnkey packs. Margins hinge on aftermarket parts and extended service agreements that can equal 40% of lifetime profit. The market’s capital intensity and certification complexity deter new entrants, yet policy shifts toward zero-emission fleets open niches for fuel-cell startups and battery system integrators.
Off Highway Vehicle Engine Industry Leaders
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Cummins Inc.
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Caterpillar Inc.
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Deere & Company
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Weichai Power Co.
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Komatsu Ltd
- *Disclaimer: Major Players sorted in no particular order

Recent Industry Developments
- February 2025: Cummins introduced the X10 mid-bore heavy-duty engine within the HELM™ 10-liter platform, rated up to 450 hp and 1,650 lb-ft torque, with series production slated for 2027.
- January 2025: Cummins launched the next-generation 6.7-liter Turbo Diesel for 2025 Ram Heavy Duty trucks, delivering 430 hp and 1,075 lb-ft torque alongside enhanced cold-start management.
- October 2024: The California Air Resources Board published proposed Tier 5 off-road diesel standards, phasing in 2029-2034 with deeper NOₓ and PM cuts and optional hydrogen ICE pathways.
Global Off Highway Vehicle Engine Market Report Scope
An Off-highway Vehicle Engine is used in an off-highway vehicle (a motor vehicle that is not intended to be driven or moved on a public highway).
The Off-highway Vehicle Engine Market is Segmented by Power Output (Agricultural Machinery (up to 30 HP, 30-50 HP, 50-70 HP, and 70+ HP), Construction Machinery (up to 100 HP, 100-120 HP, 200-400 HP, 400+ HP), Fuel Type (Gasoline, Diesel, and Other Fuels), and Geography (North America, Europe, Asia-Pacific, South America, and Middle-East and Africa). The report offers market size and value for the Off-highway vehicle engine market in terms of Value (USD billion) for all the above segments.
By Vehicle Type | Agricultural Machinery | ||
Construction Equipment | |||
Mining Equipment | |||
Forestry & Material-Handling Equipment | |||
By Power Output (HP) | Less than or equal to 30 HP | ||
31-70 HP | |||
71-120 HP | |||
121-400 HP | |||
More than 400 HP | |||
By Fuel Type | Diesel | ||
Gasoline | |||
Natural-/Bio-Gas | |||
Hybrid-Electric & Fuel-Cell | |||
By Engine Displacement (L) | Less than or equal 2 L | ||
2.1 to 3.5 L | |||
3.6 to 7 L | |||
More than 7 L | |||
By Propulsion Technology | Conventional ICE | ||
Hybrid | |||
Battery-Electric | |||
Fuel-Cell Electric | |||
By Geography | North America | United States | |
Canada | |||
Rest of North America | |||
South America | Brazil | ||
Argentina | |||
Rest of South America | |||
Europe | Germany | ||
United Kingdom | |||
France | |||
Russia | |||
Spain | |||
Rest of Europe | |||
Asia-Pacific | China | ||
Japan | |||
India | |||
South Korea | |||
Rest of Asia-Pacific | |||
Middle East and Africa | Saudi Arabia | ||
United Arab Emirates | |||
Egypt | |||
Turkey | |||
South Africa | |||
Rest of Middle East and Africa |
Agricultural Machinery |
Construction Equipment |
Mining Equipment |
Forestry & Material-Handling Equipment |
Less than or equal to 30 HP |
31-70 HP |
71-120 HP |
121-400 HP |
More than 400 HP |
Diesel |
Gasoline |
Natural-/Bio-Gas |
Hybrid-Electric & Fuel-Cell |
Less than or equal 2 L |
2.1 to 3.5 L |
3.6 to 7 L |
More than 7 L |
Conventional ICE |
Hybrid |
Battery-Electric |
Fuel-Cell Electric |
North America | United States |
Canada | |
Rest of North America | |
South America | Brazil |
Argentina | |
Rest of South America | |
Europe | Germany |
United Kingdom | |
France | |
Russia | |
Spain | |
Rest of Europe | |
Asia-Pacific | China |
Japan | |
India | |
South Korea | |
Rest of Asia-Pacific | |
Middle East and Africa | Saudi Arabia |
United Arab Emirates | |
Egypt | |
Turkey | |
South Africa | |
Rest of Middle East and Africa |
Key Questions Answered in the Report
What is the current size of the off highway vehicle engine market?
The off highway vehicle engine market size stands at USD 47.94 billion in 2025 and is projected to approach USD 66.21 billion by 2030.
Which vehicle segment accounts for the largest share of engine demand?
Construction equipment leads with 58.36% revenue share in 2024 owing to ongoing global infrastructure programs and urbanization.
Which region is expanding fastest through 2030?
Europe registers the highest 7.19% CAGR as Stage V emission compliance and infrastructure modernization boost equipment purchases.
How dominant is diesel technology in the market?
Diesel engines still hold 89.71% of revenue, although hybrid-electric and fuel-cell solutions are rising at 5.39% CAGR.
What impact will California’s Tier 5 rules have?
The Tier 5 proposal accelerates pre-buy cycles before 2029 and compels manufacturers to invest in deeper NOₓ cuts and advanced diagnostics, influencing engine design globally.
Why are mid-range 31-70 HP engines growing fastest?
Compact construction and mid-size tractors favor this power band, and OEMs incorporate telematics and fuel-saving features that raise demand, driving a 7.02% CAGR through 2030.
Page last updated on: June 27, 2025