Strait of Hormuz. On Saturday, Feb. 28, the USA and Israel launched a joint attack on Iran which resulted, among other things, in the death of several of Iran’s senior leadership, including the Grand Ayatollah Ali Khamenei. Apart from targeting the leadership, the attacks were also aimed at the Islamic Revolutionary Guard Corps (the Iranian paramilitary organization whose official role is to support the Islamic Republic).

Iran has long threatened, if attacked, to drag the region into total war, including targeting Israel, the Gulf Arab states and the flow of crude oil crucial for global energy markets. So, in retaliation, Iran has launched a series of attacks on gulf states, Cyprus, the US Navy carrier groups in the Gulf and the Mediterranean. The US responded to these attacks by wiping out the Iranian navy and hitting various missile sites in Iran.

Iran then declared that any oil tankers using the Strait of Hormuz would be attacked, and they launched drone attacks on several tankers, and oil / gas sites in Qatar and Saudi Arabia.

More recently Iran has placed mines in the Straits and has attacked more tankers trying to flee the fighting. America and Israel have responded by more attacks on Iranian leadership. Ships attempting to leave the Straits are claiming connections to China, Turkey or that they are Muslim flagged ships. Others have gone through the Strait of Hormuz with their transponders switched off to conceal their position, sometimes only reappearing on marine trackers once safely out of the area.

In another twist, Iran’s Islamic Revolutionary Guard Corps has announced that European and Arab nations will be granted unhindered access to the Strait of Hormuz solely on the condition that they expel diplomats representing the United States and Israel.

The importance of these attacks cannot be underestimated as 20% of the world’s oil passes the through the Straits, and Qatar is one of the largest Natural Gas suppliers in the world. Iran’s stated aim is to close the straits and force the oil price up to $200 per barrel.

Oil and Gas prices have already risen by up to 75% and are expected to rise further or at best remain high for a period of at least 4 weeks as President Trump has declared that this operation will last for a period of 4 weeks. Countries that are heavily dependent on oil imports (China, India, Japan, S Korea and USA) can expect to see some supply distortions which will impact upon growth and GDP. Natural Gas importers will also face a growth risk (the largest being China, Japan, Germany and USA)

We can therefore expect this to have a negative impact on the 2026 Forecast for at least 4 weeks, but the oil and gas prices will probably remain higher than normal for some time after this military operation concludes. The longer that this continues, the greater the impact and the longer the aftermath will continue and this may even trigger a global recession, but this remains uncertain at this time.   PSR

What is the Strait of Hormuz and why is it so important?

Tariffs Continue To Cause Problems

Since the beginning of his second term Jan. 20, 2025, President Trump has increased tariffs on U.S. imports from all global partners, and to implement these tariffs, the President has cited in the International Emergency Economic Powers Act. These tariffs have been wide ranging and have been applied to over 180 countries worldwide, with rates varying based on trade agreements and specific goods.

The U.S. has imposed reciprocal tariffs on several countries, with a blanket rate of 10% for many trading partners. However, some countries like India and Brazil faced significantly higher tariffs of 50% due to specific trade issues.  These tariffs include:

• Mexico: 25% tariffs.
• Canada: Tariffs were increased to approximately 35%.
• South Korea: A 15% tariff is in place, while negotiations continue.
• China: Tariffs have been reduced recently, but they remain high compared to other countries.

Many other countries then started to negotiate with USA to reduce these tariffs.

In a 6-3 decision issued Feb. 20, 2026, the Supreme Court of the US (SCOTUS) ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs.

The ruling invalidates the administration’s sweeping country-level reciprocal tariffs and fentanyl-related levies, which had collectively accounted for roughly half of all US customs duties since their introduction in early 2025.

It is estimated that cumulative IEEPA tariff collections reached approximately $165 billion by January 2026, with potential refund exposure of up to $175 billion. The ruling invalidates the administration’s sweeping country-level reciprocal tariffs and fentanyl-related levies, which had collectively accounted for roughly half of all US customs duties since their introduction in early 2025.

The Supreme Court did not address the mechanics of refunds, leaving the matter to renewed proceedings before the Court of International Trade (CIT). While nearly 2,000 companies had already filed protective actions prior to the ruling, this represents a fraction of the 300,000+ importers that had paid IEEPA duties by December 2025.

The Trump administration responded within hours. On Feb. 20, President Trump issued a proclamation imposing a 10% ‘temporary import surcharge’ on all countries under Section 122 of the Trade Act of 1974, effective Feb. 24, 2026, for 150 days. The following day, he announced via social media his intention to raise the rate to the statutory maximum of 15%

A critical constraint within Section 122 is that the tariffs expire automatically after 150 days — by 24 July 2026 — unless Congress votes to extend them. This is politically uncertain because the US midterm elections are approaching and polls are showing voter opposition to elevated import costs

Who wins and who loses.

• UK and Australia both had negotiated 10% tariffs, so a 15% tariff is a loss, but does the agreed deal still apply (no one is certain yet).
• EU, Japan, S Korea and Taiwan all had agreements with a 15% tariff, so things are neutral for these countries, but they all had agreements to invest hundreds billions of US $ in the US, and to buy goods from the US. Yet again, no one knows whether these agreements still stand, or whether they will even go ahead.
• Mexico, Brazil, Canada, China & India all had tariff rates between 18% and 50%, so they are all winners in this instance. China and India also had agreements which may or may not be valid now

However, President Trump has warned that trading partners perceived to be ‘playing games’ on previously agreed terms may face punitive responses, which has further introduced continued uncertainty.

The EU’s decision to pause ratification of its trade deal with Washington pending legal clarity bears watching as an indicator for broader multilateral confidence. India retains additional flexibility as it finalizes the terms of its framework agreement.

Finally, Trump’s planned visit to Beijing on 31 March is significant for US–China trade dynamics — even after the ruling, China retains one of the highest aggregate tariff burdens among major US trading partners, with a trade-weighted effective rate of approximately 30%.

Recently Judge Richard Eaton of the U.S. Court of International Trade has issued an immediate compliance order on the question of refunds of the tariffs and has said that the Presidents team must issue an update on the processing of refunds by March 12, and a follow up update must be issued by April 20. Judge Eaton also stated that taxpayers will feel the burden by the end of the year should the admin not fulfil its refund obligations

The changes to the tariffs are an improvement for several large economies so this should be a boost to 2026 figures.   PSR

Guy Youngs is Forecast & Adoption Lead at Power Systems Research

The agreement makes the shipping industry the first sector to agree on an internationally mandated target to reduce emissions along with a global carbon price. The agreement includes standards for greenhouse gas intensity from maritime shipping fuels, with those standards starting in 2028 and reducing through 2035. The end goal is to reach net-zero emissions in shipping by 2050

Source: Electrek: Read The Article

PSR Analysis: Given that international shipping contributes 3% of global carbon emissions (or 4% depending on your source) this is an important first step. It will however, need to be expanded and improved upon in order to reach the 2050 target. PSR

Guy Youngs is Forecast & Adoption Lead at Power Systems Research

Power Systems Research (PSR) sent a team to Bauma to research new products and developing industry trends. This report was produced by analysts in the team using AI tools to research and compile information.

The 2025 show saw a strong rebound, with 3,601 exhibitors from 57 nations and around 600,000 visitors from over 200 countries—nearly matching the pre-pandemic 2019 figures (3,684 exhibitors, 627,603 visitors) and posting a significant gain from the 2022 show, which had 3,200 exhibitors and 495,000 visitors. The show covered 614,000 square meters, the same size it was in 2022.

These figures highlight a significant increase in both exhibitor and visitor numbers in 2025 compared to 2022, reflecting the industry’s strong recovery and growth. Another indicator of industry optimism is the return this year of major manufacturers that skipped the 2022 show, such as Volvo and CNH.

The 2025 show emphasized climate neutrality, alternative drive concepts (hydrogen, electric), networked construction, and sustainability—reflecting a sharper focus on decarbonization and digitalization compared to previous years. PSR

The complete Bauma Germany 2025 Show Report will be available for downloading soon..

Baidu and CATL say they will collaborate on unmanned driving and digital intelligence to promote unmanned driving services and industrial AI applications.

The cooperation is expected to leverage the advantages of both companies, including CATL’s battery, swapping, and skateboard chassis technologies for unmanned vehicle development, and to explore competitive products and business models to enhance mobility services.

Baidu will support CATL’s digitalization with its full-stack AI capabilities, spanning chips, platforms, and applications, injecting new energy into the green transition and jointly building a smart energy future.

Source: CATL     Read The Article

PSR Analysis. The collaboration between Baidu and CATL significantly boosts the technical prowess and global competitiveness of China’s new energy vehicle industry. By integrating Baidu’s advanced AI and autonomous driving technologies with CATL’s leading battery, swapping, and skateboard chassis technologies, this partnership elevates the technical standards of Chinese electric vehicles, driving the industry toward higher level development and strengthening market competitiveness.

It also accelerates the popularization of unmanned driving mobility services in China by advancing the application of autonomous driving technology in electric vehicles. Moreover, Baidu’s AI capabilities support CATL’s digital transformation, enhancing R&D and production efficiency in the new energy sector, promoting technological progress, and contributing to China’s green transition and carbon reduction goals.

This cooperation sets a new benchmark for the global electric vehicle market through technological innovation, enhancing China’s influence in the industry and giving it more say in technology R&D and application. It stimulates competitiveness and innovation among global electric vehicle companies, driving market growth. Additionally, the Baidu-CATL collaboration offers a model for the transformation of the global electric vehicle industry, accelerating the integration with emerging technologies like AI and IoT, and steering the industry towards intelligence and networking.

By combining Baidu’s autonomous driving technology with CATL’s battery and chassis technology, the partnership addresses practical technical challenges, accelerating the maturation and commercialization of autonomous driving technology. It explores diverse application scenarios and business models for autonomous driving, promoting service popularization globally.

Furthermore, the cooperation fosters collaboration between tech and automotive firms, forming close industrial alliances to boost the development of the autonomous driving industry.   PSR

Jack Hao is Senior Research Manager – China for Power Systems Research

This month, Alternative Power Report Editor Guy Youngs brings readers up to date on Elon Musk and Tesla activities around the world. Sales are down, stock price is down, and consumer anger is up. Read about it in the March issue of the Alternative Power Report produced by Power Systems Research. The March report also contains information on EV battery development and the tariff wars launched by U.S. President Donald Trump. PSR

Guy Youngs is Forecast and Technology Adoption Lead at Power Systems Research

The company’s solution has an energy density of up to 500 Wh/kg for lithium ternary batteries, 40% more than current batteries. However, the report said charging speed and cycle life are not quite where they need to be

Source: Electrek: Read The Article

PSR Analysis: With trial production reportedly kicking off, we could see CATL launch all-solid-state EV batteries soon. The benefits of solid state batteries (higher energy density leading to longer range, rapid charging, safety and lower weight) are well known.   PSR

Guy Youngs is Forecast & Adoption Lead at Power Systems Research

The global outboard engines market size was $10.58B in 2023 and is anticipated to reach $19.13B by 2034, growing at a CAGR of 5.53% from 2024 to 2034, according to Power Systems Research (PSR).

Source: Power Systems Research

Summary. The outboard engines market produces, sells, and distributes outboard motors. These engines are independent propulsion units positioned externally on a boat’s transom instead of being integrated within the hull. These engines, which are used to power a variety of watercraft, such as boats, dinghies, pontoons, and fishing vessels, usually consist of a powerhead, gearbox, and propeller.

Demand Drivers. Today, many people are participating in water-related recreational activities, and the economic growth of the country, increasing consumer confidence, and technological innovations by boat manufacturers all are driving growing demand.

• OEMs are focusing on building versatile and affordable products to appeal to youth.
• Intuitive marine technology makes it easy to operate these products.
• The growing boat rental market and shared boat ownership are pushing outboard motor ownership. 
• The surging popularity of environmentally friendly outboard engines cater to the preferences of eco-conscious consumers.
• While electrification addresses environmental concerns and the regulatory push for reducing carbon footprints, challenges like noise pollution and high initial costs persist. Hybrid and electric outboard engines, powered by lithium-ion batteries, offer alternative fuel options, catering to the evolving demands of maritime tourism, water skiing, and cruising.
• Government organizations, marine service providers, and scientific research entities drive environmental monitoring initiatives. 
• The demand for new boats and outboard engines is heavily influenced by factors such as fuel efficiency and income levels. Increasing disposable income plays a vital role.
• The tourism industry contributes significantly to the market’s growth, as recreational boating remains a popular activity for tourists and locals alike.
• The need for boats with dependable outboard engines has increased due to the expansion in maritime tourism, which includes activities like island hopping, whale watching, and sightseeing excursions.
• There is a natural market demand for replacement engines as older models age or become less efficient, especially from boat owners who value dependability and performance.

Market Trends. There are three important developing trends in this segment: Increased usage of turbochargers, a growing interest in electric outboard engines and expanded use of digital technology.

• Turbochargers increase the volume of air to the combustion process without any additional requirement for large displacement cylinders.
• Electric outboard engines offer quieter operation, reduced emissions, and lower maintenance requirements.
• Digital technology is increasingly integrated into outboard engines, offering features such as digital controls, touch-screen displays, and connectivity options. 

Market Challenges. The performance of the global economy is a critical factor affecting the boating industry as the demand for marine outboard engines is usually cyclic with fluctuations in the economy.

A growing number of purchasers are choosing engines built to reduce pollution in water bodies that either meet or surpass emission regulations. Greener consumers are increasingly drawn to outboard motors that run on natural gas or propane and electric outboard engines.

Market Overview. PSR anticipates steady growth in the coming years, driven by the rising popularity of watersports and recreational boating activities. More reliable and quieter new engine models cater to both younger and older generations, enhancing leisure experiences.

There is a rising need for greener and more sustainable outboard engine alternatives to conventional gasoline-powered ones as environmental concerns become more widely recognized. Outboard motors powered by electricity and hybrid technology have reduced noise pollution, emissions, and dependency on fossil fuels.  PSR

Michael Aistrup is Senior Analyst at Power Systems Research

Market Trends. Manufacturers are investing in developing PWCs made of environmentally friendly materials and e-powered personal watercraft that are cleaner and more efficient.

Manufacturing. There have been many product improvements made recently and more are under development.

• PWC components made of flax plants.
• An engine made of cellulose non-fiber reinforced resin, helping it achieve its carbon-neutrality goals.
• Electric watercraft developed to reduce emission levels, support longer run times and require limited charging infrastructure.
• Solar segments, which is expected to provide higher environmental benefits than electric-operated ones.
• Customization and personalization of watercrafts.
• Changing the engine, color, accessories, and adding or remove any other components, as per their choice
• Rental and sharing watercrafts provide flexibility of using watercrafts when needed, without owning them.

Growth Drivers. Several factors are pushing the growth of the PWC segment.

• Increasing R&D and product innovation investments provide technological advancements which enhance performance and safety.
• Growing government plans for the tourism industry encourage coordination between manufacturers and tour operators to develop new technologies.
• Expanding rescue operations/coastal patrolling programs enable rescue teams use PWCs to navigate in rough waters.
• Increasing popularity of water sports events increase the demand for high performance vehicles for competition. There’s also a growing trend towards outdoor activities.

Industry Challenges. The PWC industry is not without challenges. For example, there are

• Substantial expenses associated with owning and operating a PWC. Repair and maintenance costs such as insurance and storage can be expensive. It’s difficult and often expensive to keep a PWC in optimal condition, given the growing complexity of PWC technology
• Environmental Concerns. Irresponsible PWC use can cause increased emissions, noise concerns, disturbance to natural marine habitat, and fuel spills in water bodies leading to water pollution. To avoid such issues, jet skis based on renewable energy and regulations are expected to gain traction. 

The PWC Market is poised for growth and growth factors include increasing participation in water sports, expanded government use of PWCs, and innovative new products. Key industry players are focusing on product development and strategic partnerships to meet the evolving needs of consumers. Additionally, the growing popularity of water sports events and competitions is creating a favorable environment for market expansion.  PSR

Michael Aistrup is Senior Analyst at Power Systems Research

Volvo has announced plans to begin on-road testing of trucks equipped with hydrogen powered internal combustion engines starting in 2026 with the commercial launch planned towards the end of this decade. Trucks that run on green hydrogen provide a significant step for Volvo to achieve its net zero goal and support customers to reach their decarbonization targets.

Trucks that run on green hydrogen instead of fossil fuels provide one way to decarbonize transport. Hydrogen trucks will be especially suitable over longer distances and in regions where there is limited charging infrastructure, or time for, recharging of batteries.

The hydrogen-powered combustion engine trucks will complement Volvo’s offering of other alternatives, such as battery electric trucks, fuel cell electric trucks and trucks that run on renewable fuels, like biogas and HVO (Hydrotreated Vegetable Oil).

Other OEMs who will begin testing hydrogen combustion engines in the 2026/2027 timeframe include Iveco, MAN, Freightliner (Cummins) and PACCAR (Cummins).

Source: Volvo     Read The Article

PSR Analysis. There has been significant talk during the past few years about the viability of using hydrogen as a fuel for the internal combustion engine. While trucks powered by hydrogen ICEs would be ideal for longer haul routes, there are significant barriers to adoption including fueling infrastructure, availability of “green” hydrogen and the cost per liter/gallon compared with diesel and other alternative fuels.  The hydrogen ICE engine would also be competing with hydrogen fuel cell trucks in the next decade.

With the transition to zero-emission based vehicles, the cost of the engine would likely increase significantly due to the declining scale of ICE components which would drive up costs and potentially disrupt the supply chain for the engine components. Installing an internal combustion hydrogen engine may no longer be financially feasible.

In the United States, the EPA and state agencies such as CARB would like to eliminate the internal combustion engine and completely transition to zero-emission vehicles such as battery electric and hydrogen fuel cells.   PSR

Chris Fisher is Senior Commercial Vehicle Analyst  at Power Systems Research

The E-bike market size was estimated at USD 38.3 billion in 2023 and is forecast by Power Systems Research to increase to $97.3 B in 2033 with a CAGR of 9.77% between 2024 and 2033.  Cities globally are investing in dedicated bike lanes, charging stations, and bike-sharing initiatives for facilitating easier e-bike usage. Moreover, consumers are drawn to the substantial cost savings offered by electric solutions compared to conventional vehicles.

E-Bike Market Trends. Several important technological trends have boosted the production and sales of e-bikes.

• Battery Technology. Improved batteries provide lighter weight, lower cost, longer range and quicker charging times.
• Smart features, such as GPS navigation, app connectivity, and digital displays enhance the user experience, making e-bikes more appealing and user-friendly.
• Shared micro-mobility is part of the public transportation ecosystem. As a flexible transportation option with comparatively low overhead and operation costs, shared micro-mobility can complement higher-volume fixed-route transit services by offering mobility services for many trips at a lower per-traveler cost.

Source: Power Systems Research

RESTRAINING FACTORS. While the outlook for e-bikes is fairly positive, there are some negative factors to be considered.

• High Cost of E-bikes may hamper market growth. The high cost associated with the purchase of e-bikes is restraining the growth of the market. The additional cost of battery and electric motor makes it less accessible for some consumers.
• Lack of charging infrastructure. The lack of adequate charging infrastructure is one of the biggest challenges in the market. E-bikes rely on rechargeable batteries for power.

Demand Drivers. Demand for e-bikes is driven by several factors.

• Rising Cost of fuel. Increasing prices of fuels are shifting the demand toward the electric bike. 
• Infrastructure Support to promote growth. Germany, France, and Spain have made the construction of e-bike infrastructure a priority and are trying to boost expenditures to quicken the creation of a connected and secure bike network.
• Environmental Awareness. E-bikes are eco-friendly, and convenient. They are quiet, produce no carbon emissions, provide a cheap form of transportation, conserve space, and promote excellent health. Rising awareness of health hazards associated with the usage of traditional fuel-based vehicles is increasing the growth of the market.
• Traffic Congestion. As traffic congestion increases, E-bikes offer a practical solution for daily commuting.

PSR Analysis: The global e-bike market is a highly opportunistic and competitive market owing to the shifting consumer trend towards eco-friendly vehicles. In addition, manufacturers find the e-bike an economical alternate for electric vehicles. E-bike sharing services along with support from government organizations to promote the application and adoption of e-bike are expected to promote market growth in upcoming years.   PSR

Michael Aistrup is Senior Analyst at Power Systems Research