Market Overview

Sticks And Carrots Drive Heavy-Duty Electric Truck Adoption

Share:
Sticks And Carrots Drive Heavy-Duty Electric Truck Adoption

Tighter greenhouse gas regulations around the world are the sticks forcing truck makers to at least experiment with electrification. Generous incentives, especially in California, are the carrots helping them pay for it.

"This will revolutionize our industry," John Bennett, chief technology officer at Meritor Inc. (NYSE: MTOR) told the FTR Transportation Intelligence conference in Indianapolis. "Every OEM is working on electric vehicles."

The sticks

Toughening regulations around the world are making it more difficult to drive diesel-powered trucks near some city centers. London, for example, is expanding its Ultra Low Emissions Zone outward from central London to circular roads around inner London in October 2021. A less-restrictive Low Emissions Zone for Greater London goes into effect in October 2020.

In the U.S., 16 states have targets that will require 50% clean electricity in the coming years. Twenty-four states are part of the U.S. Climate Alliance, which aims to reduce greenhouse gas emissions by at least 26-28% below 2005 levels by 2025.

Calstart, a non-profit focused on clean transportation, launched its Global Commercial Vehicle Drive to Zero initiative in 2018. Its "Beachhead Strategy" identifies commercial vehicle market segments where zero-emission and near-zero technology is most likely to succeed first and can move next.

"Instead of getting beaten into submission, it's going to make sense" to electrify trucks because the cost of batteries is coming down while the cost of emissions-curbing after-treatment for diesel trucks is rising, Bennett said.

The Carrots

Incentives that cover significant portions of the cost of more expensive plug-in battery-powered trucks are charging the slowly developing revolution. 

The California Air Resources Board (CARB) uses money from the sale of permits that allow excessive pollution to pay for grants intended to get zero-pollution trucks to replace diesel-powered trucks. Vouchers from $20,000 to $315,000 per vehicle are available depending on the size of truck and technology used.

Daimler Trucks North America and Volvo Trucks North America lead separate multi-partner efforts in California to test electric trucks in drayage at the ports of Los Angeles and Long Beach and in regional haul. Both plan commercial production of electric vehicles early in the next decade.  

"There are new names, Tesla, Nikola, XOS, Change," Bennett said. "A lot of these startups are coming in because they see an opportunity."

XOS, formerly Thor Trucks, said it would be profitable from Day One because of incentives.

With current incentives, the payback is immediate for the incremental cost of acquisition, charging infrastructure and battery replacement for Class 4-5 parcel delivery, Class 6-7 local delivery and Class 8 straight trucks, Bennett said. 

"Try it now and don't get caught off guard," he said during his presentation.

Meritor's electric plays

Meritor, which makes heavy-duty drivetrain and mobility systems, is incorporating electrification into every component it makes, Bennett told FreightWaves. 

Meritor in May acquired AxleTech, which makes heavy-duty electric powertrain systems. On Wednesday, Sept. 11, it introduced an electric independent suspension for tactical and combat vehicles, the first product from the $175 million AxleTech purchase. The e-suspension is engineered to charge its batteries while decelerating and braking.

Separately, Meritor has invested four times in TransPower, a California-based maker of electric propulsion systems for trucks. The most recent project with TransPower is for 38 terminal tractors that move goods around the ports of Long Beach and Oakland.

Meritor said it January it has 22 electrification programs with global OEMs expected to put at least 130 fully electric medium- and heavy-duty commercial trucks on the road through 2020.

Image Sourced from Pixabay

Posted-In: electric trucking Freight Freightwaves truckingNews Markets Tech General

 

Related Articles (MTOR)

View Comments and Join the Discussion!

Ocean Rate Report: Jitters For Bulkers, Steady For Boxes

Today's Pickup: Idaho Prosecutor Drops Drug Trafficking Charges Against Truck Driver Hauling Hemp