Siemens Takes the Lead in the Billion-Dollar Electric Locomotive Race
It’s the biggest locomotive deal in history …
A $3.25 billion contract to supply and service freight trains in India.
But there’s something very unique about this deal. And it has nothing to do with the size of it.
You see, these locomotives aren’t your traditional locomotives.
The locomotives are electric.
And the deal calls for 1,200 of them!
The electric locomotives will be manufactured by Siemens (OTCBB: SIEGY), and they boast 9,000 horsepower with a top speed of 75 miles per hour. Over the course of their lifecycle, these new locomotives will replace as many as 800,000 trucks.
Not surprisingly, Siemens is also aggressively working on new train deals in India, which is the largest rail market in the world, with more than 24 million passengers traveling every day on more than 22,000 trains.
Worth noting, the New Delhi government has gone on record with its plans to increase its rail network’s share of freight transport from 27% to as much as 45%.
And make no mistake, these trains will also be electric. In fact, India is one of the few countries in the world with an almost fully electrified rail network. And globally, demand for electric locomotives is increasing.
According to market research firm the Business Research Company, the global electric locomotive market is expected to grow from $1.67 billion in 2022 to $2.73 billion in 2026. This is a compound annual growth rate (CAGR) of 13.07%.
And while we can’t figure this latest deal into the market equation yet, as deliveries haven’t yet begun, a $3.25 billion contract in 2023 in a market estimated to be valued at $2.73 billion in just four years is very telling.
Just as we are electrifying personal transportation vehicles and commercial trucks and buses, we’re also moving in the same direction with rail transportation. So for investors looking to get some exposure to the electric locomotive market, here are a few companies that are already in the game, either directly or indirectly …
- Alstom: (OTCBB: ALSMY)
- Wabtec Corporation: (NYSE: WAB)
- Construcciones y Auxiliar de Ferrocarriles, S.A. (MCE: CAF)
- GE: (NYSE: GE)
- ABB: (NYSE: ABB)
I said it before, and I’ll say it again: the future IS electric!
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