麻豆传媒

Key takeaways

The challenge

As well as infrastructure and cost, the need for viable technology to address longer journeys and heavier loads is the most prominent barrier to increasing the uptake of electric fleets.

The solution

More robust regulation and stronger industry collaboration can both help overcome the infrastructure and cost parity challenges that stand in the way of greater heavy-duty EV adoption.

Electrification appears to be one of the leading solutions when it comes to decarbonising much of the world鈥檚 transport. In 2050, for instance, electricity is projected to meet one-third of the energy demand in all road transport and power nearly 80% of the global vehicle fleet. However, in comparison to light- and medium-duty vehicles, heavy-duty fleets have always been a slight outlier in this regard due to the difficulties involved in developing technology that can meet its longer journey and heavier load requirements.

Until now, that is. For years, the primary challenge was to prove the viability of electric truck models. But now that original equipment manufacturers (OEMs) have helped get electric trucks on the road, it鈥檚 time for the focus to shift to the next innovations, regulations and collaborations that will help keep them there 鈥� and in greater numbers. As such, the industry looks set to enter a new phase of the electric truck revolution.

Can innovation spark a heavy-duty evolution?

Like many of the low-carbon and zero-emission solutions that will play a part in the industry鈥檚 energy transition, a supply and demand deadlock has hampered the development of electric truck adoption. Increasingly, OEMs have been taking the bold decision to manufacture more models. However, these hardware breakthroughs can be more impactful. Similar innovations in cost parity and charging infrastructure will be the next most important hurdles in pursuing wider battery-electric adoption.

Since many factors feed into overall expenditure, achieving cost parity between battery-electric trucks and their diesel counterparts will be complex. Therefore, a total cost of ownership (TCO) approach is vital. However, the TCO parity timeline depends largely on tolls, fuel and operations costs, and capital expenditures (CapEx) subsidies to reduce the upfront cost gap. This gap is often dictated by the relatively high cost of the larger batteries used by heavy-duty vehicles.⁴

Finally, the time horizon is important here too, especially when you consider the average age of trucks on the road. This figure sits at 14.2 years in the European Union (EU), for example, though is likely higher in other markets.⁵ As a result, the shift to EVs will not happen overnight, particularly as some operators are likely to hold off on switching until either greater certainty exists around infrastructure or upfront prices fall.

When it comes to charging infrastructure and practices, there are several innovations that promise to accelerate progress. And while the expansion of these physical charging networks is underway, it will take significantly more investment and time to meet the growing demand. Therefore, innovative changes to fleet operations are being used to accelerate progress in the meantime.

Charging vehicles around driver shifts is one, since it can help ensure the economics of battery-electric trucks make more sense to those purchasing and operating them on a daily basis. The EU鈥檚 Alternative Fuels Infrastructure Regulation (AFIR) is a prime example, as it looks to enable mid-shift (i.e. during breaks) charging across the EU鈥檚 core Trans-European Transport Network (TEN-T).⁶ Whereas, off-shift charging is likely to be a common occurrence when private or semi-private charging depots are available.

Other ideas revolve around less widely implemented areas like battery-as-a-service, which can potentially reduce upfront costs, or electric road systems 鈥� with battery-electric trucks connected to overhead cables. Together, these developments feed into a wider ecosystem, which will combine heavy-duty public charging along key corridors, with private chargers located at depots and hubs that are either owned by, or privately accessible to, the companies in question.

How regulation is changing the global landscape

As promising as these innovations may seem, they will only be effective commercially if a conducive policy environment exists in which to scale them. Fortunately, national governments are moving the needle when it comes to policies that will help progress battery-electric truck adoption. Albeit, at different rates across different regions:

• China still dominates the market, with more than 95% of the global fuel cell truck fleet calling the region home.⁷ This is largely due to government support for battery-swapping technology, which saw 49.5% of battery-electric trucks sold there in 2022 being swap-capable.⁸
• The United States is responding through its 2022 Inflation Reduction Act, which involved a $1 billion commitment to incentives and infrastructure projects for heavy-duty vehicles until 2031, including tax credits of up to $40,000 for vehicles over 14,000lb and $100,000 per charging station.⁹
• The European Commission proposed revisions of regulation on heavy-duty vehicle emissions in early 2023. This includes medium lorries, buses and coaches 鈥� covering 98% of sectoral emissions 鈥� and will see targets levels rise to: -45% in 2030; -65% in 2035; and -90% in 2040.¹⁰
• Meanwhile, Australia has a that has been extended to include heavy-duty vehicles and their charging. Japan also aims to introduce 5,000 battery-electric heavy-duty vehicles by 2030, thanks to a $120 million electrification plan.¹¹

While ambitious in scope, these decisions have yet to translate into greater numbers for many of these regions. For instance, just under 2,000 battery-electric trucks were sold across the entire EU in 2022.¹² However, regulations are increasingly encouraging synchronous uptake of vehicles and charging infrastructure, though significant investment in electricity grids will be continually needed to accommodate increased charging demand.

Why public and private spheres must work together

One way of boosting the impact of innovation and policy leadership alike is to ensure a good working relationship between the public and private spheres. That way, the 鈥榗hicken and egg鈥� scenario of neither the supply nor demand side wanting to move first can be further avoided.

A good example is Shell鈥檚 involvement in the Volvo LIGHTS initiative, which has seen Shell Recharge Solutions join Volvo and others to help commercialise battery-electric trucks, installing 58 networked public and private charging stations across South California.¹³ This shows how an environmental approach to heavy-duty electrification 鈥� which brings customers, transport companies, truck manufacturers, investors and governments together 鈥� can help shape a net-zero pathway for the road freight sector.

_{¹ DNV. 鈥�.鈥� 2023.}  

_{² Volvo Group North America. 鈥�.鈥� May 18, 2022.}

_{³ DNV. 鈥�.鈥� 2023.}  

_{⁴ Beia Spiller. 鈥溾�� Resources for the Future. May 3, 2023.}

_{⁵ European Automobile Manufacturers鈥� Association. 鈥�.鈥� ACEA. January 17, 2023.}

_{⁶ Forming part of the European Union's "Fit for 55" regulatory package, AFIR was proposed on July 14, 2021 and sets legally binding targets for deploying alternative fuels infrastructure regarding road vehicles as well as vessels and stationary aircraft. The International Council on Clean Transportation. April 26, 2023.} 

_{⁷ International Energy Agency. 鈥�.鈥� April 2023.}  

_{⁸ Hongyang Cui, Yihao Xie and Tianlin Niu. 鈥�.鈥� The International Council on Clean Transportation. August 9, 2023.}

_{⁹ Emma Deangeli and Nafisa Lohawala. 鈥�.鈥� Resources for the Future. May 31, 2023.}

_{¹⁰ European Automobile Manufacturers鈥� Association. 鈥�.鈥� ACEA. February 17, 2023.}

_{¹¹ International Energy Agency. 鈥�.鈥� 2023.}

_{¹² International Energy Agency. 鈥�.鈥� April 2023.}  

_{¹³ Volvo Group North America. 鈥�.鈥� May 18, 2022.}  

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