Electrification and efforts for carbon neutrality have upended the auto industry. And while there have been some recent hiccups, most agree the path towards battery electric power is happening — and not just with cars.
The future of sustainable motorboating is also rapidly approaching. Electrification is taking center stage with a number of boating companies large and small and e-fuels and hydrogen technology are also gaining traction as part of the green movement. Here's where the industry, and investors, are placing bets as sustainability comes to the seas.
The state of the marine market
The trend comes as the global recreational boat market itself is booming, with the nearly $19 billion market poised to jump almost 40% to $26 billion in only five years. Including marine products and ancillary services across the whole landscape, the global marine industry sits at $60 billion right now.
Read more: Financing a boat: What you need to know
But the industry is also transforming and going high tech, thanks for government subsidies and overall desire in the marine world to go "green."
From big players like Brunswick (BC) to smaller firms like Scandinavian startup Candela, companies are betting on the "electric" powertrain market for boats, which experts say will grow by $4.4 billion, more than doubling sales by 2030.
“One of the biggest if not the biggest boat manufacturer in the world, Brunswick Corporation, from the names that we look at, it's certainly at the forefront of electrification,” James Hardiman, Citi leisure and travel analyst, told Yahoo Finance.
“The whole concern about battery, energy, density is certainly an issue today, and so a lot of the propulsion electrification and electric outboard engines are just extremely expensive. We've seen some cool concept vehicle along those lines, but from a consumer perspective, it’s way too expensive today, but the hope is over the next five to 10 years, they'll take up a much bigger chunk of the majority,” Hardiman said.
It's more than electrification
Beyond electrification, and even hybrid power, are e-fuels, or sustainable liquid fuels. E-fuels are essentially synthesized fuels that are sustainably produced (using seaweed and carbon dioxide from the atmosphere, for example) to produce fuel that can be used in most gas- or diesel-powered motors. The fuel is considered carbon neutral since the same amount of carbon dioxide used to make the fuel is burned when used in an engine, for example.
Another emerging technology entering the boat market that’s also beginning to see some use in the commercial truck sector is hydrogen power. Hydrogen fuel cell powertrains offer clean, powerful propulsion and range fit for consumer and commercial applications.
“Because of the energy density issue, both (consumer and commercial boating) require a lot of energy to move through the water — it's a factor of roughly 10 compared to a car. So to pack that kind of energy density into batteries can be difficult for a lot of the vessels,” said Jeff Wasil, National Marine Manufacturers Association’s (NMMA) director of environmental health and safety, to Yahoo Finance.
Wasil believes hydrogen power and sustainable fuels will play a big role for two reasons. First, there are about 12 million registered power boats in the US today that are going to rely on liquid fuels for quite some time. Second, on the commercial side, going across oceans with large cargo requires an enormous amount of energy, more than what battery electric power is capable of providing at the moment.
While most consumers and boat fans aren’t necessarily buying boats with alternative propulsion tech just quite yet, tastes and technology can change quickly, and companies need to be ready to pounce when the opportunity arises.
“I think [manufacturers] need to meet consumers where they are, but ultimately prepare for a future in which this battery technology is not only able to create higher-horsepower applications that are lighter and don't impact the performance of the boat in a negative way, but also cheaper,” Citi's Hardiman said.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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