The adoption of battery-powered electric commercial vehicles (BEVs) is rising fast, thanks to government regulations, tax incentives, and improved price parity, according to an industry report released Tuesday.

Early adopters include sectors such as municipal buses, refuse trucks, light-duty service vehicles, and terminal tractors. Together, they will help drive the number of BEV commercial vehicles to 3 million units worldwide by 2024, according to the Oyster Bay, New York-based market advisory firm ABI Research.

"Beyond the current headlines, companies including BYD, Proterra, and Peterbuilt are establishing a BEV market presence within key early verticals," Susan Beardslee, principal analyst, Freight Transportation & Logistics, at ABI Research, said in the report, "Global Battery-Powered Electric Commercial Transport Fleet Expanding to 3 million Units by 2024." That growth rate would calculate out to a 28% compound annual growth rate (CAGR) from 2019 to 2024, the firm said.

Other examples include Daimler Trucks North America delivering its first Freightliner, eCascadia, to both Penske and NFI, and Amazon ordering 100,000 electric trucks from Rivian. At the same time, new business models include Volvo Trucks North America's upcoming VNR semi-truck with an 'energy as a service' package.

According to ABI, further growth beyond those initial use cases will require a "significant investment" in charging infrastructure and new technology to reduce battery size and weight as well as significantly enhance range.

"Other factors yet to be fully addressed include battery life and recycling methods. Still, the elimination of fuel costs, second only to personnel, and a significant reduction in maintenance will continue to attract significant investment and adoption of commercial BEV's throughout the 2020s," Beardslee said.