Jan 22, 2024

Why Electric Trucks are Poised for Success Despite Recent Challenges in 2024

The transportation industry, auto industry, or automotive industry has undergone significant changes in recent years, with a growing emphasis on sustainability and reducing carbon emissions. As a result, there has been a surge in the development and adoption of electric vehicles, including trucks.

While electric trucks have faced some challenges in the past, such as limited driving range and high upfront costs, they are now poised for success in 2024. This is due to several factors, including advancements in technology, supportive government policies, and increased demand from consumers and businesses for eco-friendly transportation options.

Despite the recent challenges faced by the electric truck industry, the future looks promising and it is clear that they will play a crucial role in shaping the future of transportation.

In this article, we will explore the reasons why electric trucks are set for success in 2024 and how they are revolutionizing the commercial transportation sector.

Numerous Obstacles

Last year, the heavy-duty electric truck industry faced numerous obstacles that hindered significant rapid growth. Challenges such as a lack of charging infrastructure, recalls due to battery fires, and financial troubles in the battery manufacturing sector prevented widespread adoption of these vehicles.

However, there were a few positive developments amidst the setbacks. Real estate developers recognized the potential of electric charging depots and began investing in their construction.

Additionally, certain established original equipment manufacturers witnessed improvements in the driving range of their Class 8 electric models. Furthermore, a promising startup focused on lithium-iron phosphate chemistry achieved an impressive milestone of over 600 miles on a single charge, albeit in a passenger vehicle.

Although the issue of matching electric trucks with convenient and reliable charging remains an ongoing challenge, there are signs that 2024 might bring about some resolution to the growing pains experienced in 2023.

Next-Generation Electric Trucks Promise Greater Range

Truck manufacturers with a long-standing legacy are set to introduce their next-generation battery-electric trucks to the United States, following their successful launches in Europe this year. These manufacturers possess substantial financial resources and engineering expertise stemming from their global operations.

One particularly promising electric truck is the eActros 600 from Mercedes-Benz Trucks, which is anticipated to provide an impressive driving range of 310 miles on a single charge. Additionally, a conventionally designed Freightliner eCascadia will soon enter production as the second-generation eCascadia, boasting an enhanced single-charge range of 230 miles, up from the previous 150 miles.

Volvo Trucks North America is also making strides in the electric truck market, advertising a noteworthy range of 275 miles for their VNR Electric model. This achievement is made possible by equipping the vehicle with six battery packs instead of the standard four.

Furthermore, the introduction of a new DAF Trucks entry in Europe will benefit manufacturers like Peterbilt and Kenworth, as this model offers an impressive single-charge range of 310 miles. This exceeds the current range of both the Peterbilt Model 579EV and the Kenworth T680E, which were among the earliest electric truck models available for purchase in the United States.

In conclusion, the arrival of these next-generation battery-electric trucks from legacy manufacturers is set to revolutionize the American market, offering improved driving ranges and pushing the boundaries of electric truck technology.

Tesla Semi Takes Long-Range Electric Truck Lead

Limited production of the highly anticipated Tesla Semi finally commenced in 2023, marking a significant milestone for the electric truck industry. Boasting an impressive range of up to 500 miles between charges, the Tesla Semi surpasses its competitors by drawing in a remarkable 750 kilowatt hours of electricity.

In a remarkable feat, one of these Semis managed to cover a distance of 1,000 miles in a single workday in September. However, Tesla CEO Elon Musk's ambitious target of producing 50,000 Semis this year appears to be an incredibly challenging goal to achieve.

The North American Council for Freight Efficiency Run on Less Electric Depot conducted a thorough study of 10 electric depots and their charging capabilities, and their findings confirmed Tesla's undeniable dominance in terms of charging efficiency among heavy-duty trucks.

Sadly, the exciting Hyliion Hypertruck ERX natural gas-electric powertrain, showcased in the Peterbilt Model 579 gliders, disappeared from the market towards the end of 2023. The startup's board of directors concluded that the path to profitability was unclear due to increased costs from suppliers and a lack of serious interest from fleets.

Instead of pursuing a more complex solution to zero-emission driving, which involved a combination of natural gas and electric power, Hyliion made a strategic pivot towards utilizing Karno generator technology acquired from GE for stationary electric generation. The developments surrounding this shift will undoubtedly be captivating to watch in 2024. Notably, a recent test utilizing untreated natural gas directly from the Permian Basin demonstrated that the generator could achieve the necessary heat levels to generate electricity with an ultra-low emissions profile.

Incentive Picture for Electric Trucks Begins to Shift

California's HVIP program, known as the Hybrid and Zero-Emission Truck and Bus Voucher Project, has been instrumental in providing substantial financial support to assist fleets in managing the higher initial costs associated with acquiring electric trucks. However, this year marks the final opportunity for most fleets to benefit from the program's generous incentives, which can reach up to $168,000 per Class 8 battery-electric truck.

One notable example is Schneider, a prominent transportation company that has made significant strides in embracing electric truck technology. Through California's Joint Electric Truck Scaling Initiative, Schneider successfully obtained 50 Freightliner eCascadias. Building on this success, the company expanded its electric truck fleet by an additional 42 eCascadias by the end of the year.

To contribute towards the acquisition of these electric trucks, Schneider availed HVIP vouchers for 30 of them. The Environmental Protection Agency funds also played a role in supporting five trucks, while the Volkswagen Environmental Trust, established in the aftermath of the 2015 "Dieselgate" emissions scandal, partially financed seven vehicles.

Although Schneider's fleet of 92 electric trucks is an impressive accomplishment, it constitutes less than 1% of their total fleet of 10,200 tractors. Furthermore, while celebrating the remarkable milestone of covering 1 million miles through electric driving in November, it is important to note that this achievement pales in comparison to the staggering 9.8 million freight miles covered by Schneider's fleet on a daily basis.

Doubling Discounts for Smaller Fleets

Calstart, an organization working in partnership with the California Air Resources Board (CARB), oversees the administration of the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP). As part of its efforts, Calstart is implementing changes to enhance the program's efficacy.

These changes involve redirecting funds towards smaller fleets and increasing the available discounts. Notably, the program now permits truck-as-a-service providers, offering comprehensive packages that encompass equipment, maintenance, and electricity, to receive vouchers.

This shift in focus towards smaller fleets may result in larger fleets considering alternative options, such as outsourcing certain routes to independent operators, instead of directly purchasing vehicles. However, it is important to mention that if the Advanced Clean Fleets rule, which has recently been postponed, comes into effect, fleets comprising 50 or more trucks will no longer be eligible for HVIP incentives.

Nevertheless, there is an exception for companies that exceed the required number of electric trucks. Such companies will retain their eligibility for HVIP vouchers, even for vehicles beyond their required quota.

These adjustments aim to promote the adoption of electric trucks and contribute to the development of a cleaner transportation industry in California.

In December, several states, among them Maryland and Rhode Island, made the decision to align with California's Advanced Clean Truck rule. This groundbreaking regulation mandates automobile manufacturers to increase the availability of zero-emission trucks significantly within the next twenty years.

The Medium-Duty Electric Truck Picture

This year, we can anticipate an increase in the number of medium-duty electric trucks on the market. Daimler Truck is introducing the Rizon Class 4-5 models, while Freightliner is expanding its Class 6 eM2 for hub-and-spoke deliveries. Furthermore, there are plans for an electric chassis suitable for utility and vocational purposes.

When it comes to charging, medium-duty trucks can be charged using either direct current or alternating current, commonly known as Level 2 charging. Level 2 charging is particularly advantageous for trucks with set routes and return-to-base operations, as they can conveniently charge overnight.

Mack Trucks has decided to include Mexico as one of its markets for its MD Class 6 and 7 electric trucks. These electric trucks will be manufactured alongside diesel-powered MD Series trucks in Roanoke, Virginia.

Navistar is also selling its MV Electric Class 6 and 7 trucks, with production being relocated from Escobedo, Mexico to San Antonio.

Moreover, Isuzu has unveiled its first-ever all-electric production model, the Class 5 N-Series EV. Hino has also introduced the Class 5 M5e cabover and Class 6 L6e conventional medium-duty truck models during Work Truck Week in Indianapolis.

Workhorse Group has started early production of its W56 electric step van, starting from scratch after facing difficulties with their previous C-Series electric vans. The company managed to convince shareholders to authorize new stock and expanded its dealership network to eight locations, including outlets in Southern and Northern California.

Due to the declining stock price, which was trading at only 37 cents a share on Tuesday, the Nasdaq issued a warning to delist the company in September. To potentially boost the share price artificially, the company has sought an increased share authorization from 200 million to 450 million shares, which could lead to a reverse stock split.

Infrastructure For Electric Trucks Took Major But Inadequate Strides in 2023

In 2023, notable real estate developers such as Prologis and CBRE, alongside well-funded startups, showed a keen interest in electric trucks. They acquired land and collaborated with utilities to ensure the delivery of multiple megawatts of electricity to electric truck depots.

While some of these plans will come to fruition in 2024, their combined efforts still fall significantly short of the 157,000 truck charging points estimated by the California Energy Commission in 2021. This estimate was based on the anticipated need to support 180,000 medium- and heavy-duty electric trucks and buses by 2030.

Two notable players, Schneider and NFI Industries, have taken matters into their own hands by creating their own charging depots for drayage trucks. Schneider is on the verge of fully energizing a 4.8-megawatt facility in El Monte, capable of charging 32 trucks simultaneously. However, delays in receiving switchgear have pushed back NFI's depot in Ontario, California, to sometime this year.

Meanwhile, the startup WattEV has opened a public truck charging depot at the Port of Long Beach and has plans to establish three more in California, specifically in Bakersfield, San Bernardino, and Gardena.

Forum Mobility has supplied Hight Logistics with four electric trucks and charging in Long Beach, with future plans to energize a depot near the Port of Oakland. This depot will have the capacity to charge 90 trucks simultaneously.

On a larger scale, the Greenlane charging infrastructure joint venture, valued at $650 million and comprised of Daimler Truck North America, NewEra Energy, and BlackRock Climate Infrastructure, appointed a chief executive in 2023. The joint venture aims to establish medium- and heavy-duty truck electric charging and hydrogen fueling locations on both the East and West coasts, as well as in the Texas Triangle region formed by Austin, Dallas, Houston, and San Antonio, which are interconnected by Interstates 45, 10, and 35.

2 Battery Startups Hit The Wall in 2023

Two new players in the electric truck industry have experienced setbacks in 2023. Romeo Power, a high-voltage battery manufacturer, had to close down after its assets were acquired by Mullen Automotive due to a troubled purchase by Nikola Corp.

This was prompted by fires in Romeo battery packs, leading to a costly recall and a pause in Nikola's production of battery-electric vehicles. Similarly, Volvo Trucks North America had to recall their heavy-duty electric trucks because of potential battery fires.

On the other hand, Proterra Inc., a financially struggling company, had to enter Chapter 11 bankruptcy reorganization in August. However, Volvo Group stepped in and purchased Proterra's battery supplier business for $210 million in November.

This move by Volvo will benefit their rival Daimler Truck North America's Freightliner Custom Chassis and Thomas Built Buses, as well as Nikola's hydrogen-powered fuel cell electric truck.

Interestingly, Our Next Energy (ONE), a startup based in Michigan, has managed to thrive amidst these challenges. They specialize in supplying lithium-iron phosphate batteries to medium-duty truck manufacturers such as Motiv Power Systems and the Shyft Group.

ONE's strong focus on increasing driving range has resulted in an impressive milestone of 608 miles on a single charge in a BMW iX SUV, thanks to their innovative dual-chemistry battery.

Hydrogen-Powered Fuel Cells Trucks Gain Acceptance

The current sales of hydrogen-powered fuel cell electric trucks are still quite low and can be counted on just a few fingers and toes. However, this is expected to change significantly in 2024 as Nikola expands its production of the Tre FCEV specifically designed for the California market, which already has a growing hydrogen infrastructure in place.

In order to support this expansion, Nikola has entered into a 10-year partnership with FirstElement Fuel, becoming a customer of their hydrogen fueling station near Oakland. Additionally, Nikola is collaborating with partners like Voltera to establish a network of Hyla-branded fueling stations, ensuring an adequate supply of hydrogen for the trucks it sells.

Most of these new fueling stations will be strategically located to support drayage electrification, which involves the transportation of goods over short distances. This move towards drayage electrification is further encouraged by the availability of HVIP incentives, which can provide up to $288,000 per truck.

This incentivizes the adoption of hydrogen-powered electric trucks and contributes to the overall growth of this emerging industry.

Additional positive developments in the field of green technology include:

  • Hyzon Motors is actively pursuing the production of its 200kWh fuel cell, specifically designed for heavy-duty trucks. Concurrently, the company is seeking potential customers interested in implementing fuel cells for stationary applications.
  • Toyota has initiated the manufacturing of heavy-duty fuel cells at its facility in Kentucky, with the intention of supplying Kenworth and Peterbilt vehicles starting from the upcoming year.
  • DTNA (Daimler Trucks North America) is collaborating with Cummins Inc. to develop fuel cell retrofits for Freightliner Cascadias, showcasing their commitment to implementing sustainable solutions in the trucking industry.
  • Daimler Truck, in partnership with Volvo Group, has formed the cellcentric joint venture, which aims to bring the production of fuel cells back to their respective regions. Although this initiative is still a few years away, Daimler is already conducting trials of its GenH2 truck with European customers. Notably, in October, the GenH2 truck successfully completed a remarkable 647-mile journey on a single fill-up in Germany, demonstrating its efficiency and potential.

Federal funding for hydrogen-making hubs has the potential to substantially reduce the cost of hydrogen fuel. However, the implementation of renewable energy mandates by the Biden administration, such as the use of solar and wind power for generating green electricity, may impede the pace of advancement in this area.

Despite these challenges, Plug Power has successfully installed a one-megawatt electrolyzer at an Amazon distribution center in Colorado. This cutting-edge technology is employed to produce hydrogen fuel specifically for 225 fuel cell forklifts that are utilized within the facility.

In Conclusion

Despite the recent challenges faced by the electric truck industry, it is clear that they are still on track for success in 2024 and beyond. With the advancements in technology, increasing demand for sustainable transportation, and supportive government policies, electric trucks have a bright future ahead.

As we move towards a greener and more environmentally conscious society, it is only a matter of time before electric trucks become the go-to choice for commercial transportation. So, let's keep our eyes on the road and see where this exciting journey takes us.

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