Manufacturers around the world are developing a wide range of innovative products, but diesel locomotives often remain irreplaceable in terms of operation. After initial enthusiasm and high expectations for new locomotives with innovative, environmentally friendly drives, disillusionment is increasingly spreading: The move away from the classic diesel locomotive is proving more difficult than expected. This is shown by the new study “Diesel and Alternative Drive Locomotives 2025 – Global Market Trends 2025” by SCI Verkehr.
Diesel locomotives continue to have a strong presence in Europe, especially in the high-performance shunting locomotive segment. There is no shortage of technical alternatives. Hybrid locomotives (diesel/battery) or dual-mode assets (pantograph and diesel engine or traction battery) could serve the many non-electrified branch lines and marshalling yards. But it is here, away from the main lines, that rail freight transport operators are under particular cost pressure. The cost pressure is even higher for single wagonload transport on these routes – especially in Germany, but also in countries such as Switzerland and France. The willingness of stakeholders to transform is being thwarted by economic reality, because state-of-the-art traction is far more expensive than conventional diesel locomotives. Complex approval processes are also delaying the start of operations for locomotives that have already been ordered. Some procurement projects that had already begun have even been terminated. Nevertheless, there is demand for greener locomotive traction for shunting locomotives. In the case of mainline locomotives, dual-mode locomotives have established themselves in the first national markets. SCI Verkehr sees a growing market worldwide in the medium term for new vehicles in the overhead line-independent locomotive traction sector. The main driver for this is the considerable global demand for replacement purchases. While diesel locomotives continue to be the majority of purchases, new products with alternative drive systems are geared towards regional infrastructure conditions. A wide range of technical solutions can therefore be observed.
The global market for new diesel-powered and alternatively powered locomotives stood at around EUR 3.8 billion in 2025. After a sharp decline, the new vehicle business has risen significantly again in recent years. In North America, moderate growth in the new-vehicle market has also been observed since 2021, starting from a historically low level in the United States. In Western Europe, the delivery of larger fleets of dual-mode mainline locomotives has caused market volume to rise sharply.
SCI Verkehr expects a significant increase in the new vehicle business to 4.5 EUR billion in 2030. Alternative drive systems will move beyond the testing stage and gain significant market share. In Europe, the popular dual-mode mainline locomotives will increasingly be available to Eastern European operators. Russia has now succeeded in producing its diesel locomotives with local components, thereby also strengthening the domestic market for replacement purchases. However, the increase in global market volume (EUR) can also be explained by significantly higher locomotive prices.
Overall, however, there is no sign of a move away from diesel traction in rail freight transport in most regions of the world market. In many regions with a low level of electrification, such as Australia/Pacific or Africa, freight rail operators rely on diesel traction with (more) modern technology. Due to the low level of electrification (33% worldwide), traction independent of contact wires will remain indispensable in freight transport in many regions in the long term.
The major Asian markets of China and India are taking a different approach. Extensive investments in line electrification are enabling a move away from diesel traction in the new vehicle business, while at the same time requiring only selective use of alternatively powered locomotives.
The market study ” Diesel and Alternative Drive Locomotives 2025 – Global Market Trends 2025” will be available in English from SCI Verkehr GmbH from December 2025. A data appendix in Excel format is also available for the study, which presents all the figures contained in the study in a transparent and clear manner.
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