Electric trucks have captured the imagination of activists, regulators and the general public, but not so much the minds and wallets of the fleets who buy vehicles.
In early 2020, the business case for medium- and heavy-duty electric trucks just doesn’t work, and there’s little if any public infrastructure in place to support the growth of the commercial electric fleet. If we are to see broad uptake of zero-emission transportation, manufacturers and consumers will need massive government support, possibly market intervention, and a serious examination of the regulations that apply to electric trucks.
That’s the view of Sean Waters, Daimler Trucks North America’s vice-president of product compliance and regulatory affairs, the keynote speaker at this year’s Green Truck Summit – an event ironically held in the shadows of a shuttered and converted 19th-century coal-fired electric generating station.
“People don’t buy our trucks because they want to. People buy our trucks because they have to.”– Sean Waters, Daimler Trucks North America
The Green Truck Summit was held, as usual, the day before the Work Truck Show, where enthusiasm for electric trucks was high. Bright orange high-voltage cable dangled from dozens of medium-duty vans and trucks on display. But across the street and a day earlier, things were a little more grounded. Speakers like Waters and others talked frankly about everything that still need to happen before the e-mobility ecosystem can be called viable.
“People don’t buy our trucks because they want to. People buy our trucks because they have to,” Waters said early in his address. “These aren’t toys. These are pieces of capital equipment, and capital goes where it can make money. If you found that an electric vehicle costs more than a diesel and you can’t make that money back, you’re not going to buy it.”
Waters’ sentiments were echoed in a subsequent presentation on the challenges of meeting sustainability targets.
“With the current state of the technology, it’s hard to get a return on the investment, even for the green image,” said Mark Wagner, Kenworth’s product planning manager. “With a purchase price [of an electric truck] two or three times higher than a diesel truck, along with the required investment in infrastructure, any energy or fuel savings is not enough to overcome the initial cost. That’s why local or federal incentives will be required to launch most fleets down the path to a zero-emissions vehicle.”
Several pieces of the puzzle are already in place, but the critical parts still elude industry. There are lots of companies building electric trucks. From the established OEM in the commercial space to a handful of startups, manufacturers have figured out how to do that. They are pouring development and testing dollars into applications that seem to hold the best near-term promise, such as school buses and last-mile delivery vehicles, but at some point they have to start selling the things.
“Any energy or fuel savings is not enough to overcome the initial cost. That’s why local or federal incentives will be required.”– Mark Wagner, Kenworth
The established OEMs have a leg up with existing revenue streams, but startups need sales too, and if consumers are not buying the well could eventually run dry.
While Waters and others agree that buying incentives are critical, there are other ways government can help, like getting out of the way.
“Will requiring [manufacturers] to certify their electric vehicles help to get more electric vehicles on the road? This is something we have to do now in one state. Is that something that the EPA should take on? Is that the type of policy that we want?” Waters asked.
He said settings standards for electric vehicles just makes it harder for OEMs to achieve the manufacturing scale needed to reduce costs. Daimler and other OEMs build diesel trucks on a global scale, but because of minute differences in the emissions regulations in various parts of the globe it’s impossible to certify a North American engine in Europe, for example, and vice versa. Waters is worried that the same divergence of standards will harm the rapid adoption of electric trucks.
Standardization, not more standards
“Not only do we have federal regulations in the U.S., but we have state regulations, and then we have different regulations in Europe and different regulations in Asia,” he said. “As a global company, we produce safe and clean vehicles in Europe, Asia and the United States. If we want to get faster deployment of electric vehicles, or really any technology, we need to figure out a way to standardize those regulations.”
Waters was referring to emissions regulations, but he is equally concerned about the lack of standards for something as seemingly simple as a charging plug. “Where are we at for heavy-duty commercial vehicle infrastructure? The answer is, we’re not there.”
He recalled a trip in the eCascadia from Portland to Los Angeles. Even bobtail, it wasn’t workable. Charging at the passenger car chargers took forever. And because the vehicle was so big it took up extra space at the charging stations, which was disruptive for the cars. And they were not even pulling a trailer.
“There are lots of questions on the mind minds of the electric truck buyers, but I think the infrastructure question is the big one that we’re really going to have to solve, and soon,” he said.
Work is underway to develop such a standard within an association called CharIN (Charging Interface Initiative). It’s a Berlin-based association of global auto and truck makers, including Daimler, Audi, BMW, Volkswagen, Tesla and others. CharIN’s purpose is to develop, promote and support a worldwide Combined Charging System (CCS) standard. Its work also includes defining a new commercial vehicle high-power charging standard, or High Power Charging for Commercial Vehicles (HPCCV).
Waters noted that it’s still early days as far as commercial vehicle charging is concerned, but he stressed that truck builders need such a standard now so it can be incorporated into chassis and infrastructure designs going forward.
“We’d like to get to 1,500-volt charging,” he said. “Or maybe it’s 1,000 volts. I don’t think we know exactly where we’ll end up as an industry. But we know that we’ll need more power than the passenger car industry.”
Currently, CCS DC charging can deliver up to around 1,000 volts/200 amps with traditional copper cables, while higher currents (1,000 volts/500 amps) can be delivered via liquid-cooled cables. Such systems can chare up to 80% of 100 kWh battery in less than 20 minutes.
CharIN is exploring an HPCCV standard that would make it possible to recharge Class 6, 7 and 8 commercial vehicles, with batteries up to 500 kWh, in 20-30 minutes. To get there they will need liquid-cooled cables, and a dedicated connector delivering 1,500 volts/3,000 amps.
“We’re working with CharIN and a lot of other OEMs to try and put together the right charging standardization so we can have that up front while we’re early in this process,” said Waters.
He noted there’s also a lot of work to be done with the public utilities that supply electricity. They will be asked to build out a lot of infrastructure to support the delivery of energy for commercial vehicles.
“The only way they’re going to do that is by being able to increase rates and pass the increases along to consumers,” Waters said. “Are we ready for that? It’s certainly something that needs to happen if society really wants to push forward with electric vehicles. We need to make sure we get the infrastructure in place and [the utilities] going to be a big part of that.”
It has been said many times that the business case for electric trucks is viable on a total cost of ownership (TCO) basis, but most buyers can’t get past the upfront cost. In the short term, Waters would like to see the removal of barriers such as the U.S. Federal Excise Tax, which adds 12% to the cost of a truck to cover highway funding. Since electric trucks are so much more expensive right out of the gate, the FET payable is also two to three times what it would be on a diesel.
“As a matter of policy, we should not have the excise tax on commercial trucks for the next 10 years,” he suggests. “That’s not going to hurt the highway fund that much. The volumes will be low enough at first, and enough diesel product is still being sold in that time period. Let’s do something to help boost the electric vehicle market in a smart way.”
But the absolute best way to bring upfront cost down is to build economies of scale, Waters said. “We need to have common regulations. I can’t just bring over an electric vehicle from Europe to the U.S. because of all of the different regulations we have in here. And it’s not because one set of regulations is better than the other. They’re just different.
“We can get better economies of scale quicker if we were allowed to transfer technology across the oceans. That’s something that we really need to take a close look at,” he added.
But at this point, government are draining their coffers to support business and citizens through these bleak days of Covid-19. How much money will be left for electric vehicle incentives is anyone’s guess.
“While governments are spending a lot of lifesaving money as we speak, they will have to restart the economy,” said Lion Electric director of business development Yves Provencher, sharing his personal opinion.
“I think that the expression ‘balanced budget’ will disappear for quite a few years. But money will eventually flow to job creation, and we are very confident that major government economic investments will go toward the ‘new economy’. Electric vehicles will be in that mix.”
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