Electric Vehicles

The State of All-Electric Trucks in the U.S. Medium-Duty Market

January 2014, Green Fleet Magazine - Feature

by Sean Lyden - Also by this author

The Operational Advantages

Here are three areas where E-truck payback in urban delivery applications can be especially attractive:

1. Fuel Cost Savings

How do you compare the cost of electricity to recharge an E-truck versus a conventionally fueled vehicle?

The U.S. Department of Energy (DOE) recently launched an online resource (www.energy.gov/maps/egallon) that compares the cost of driving with electricity with gasoline, with the unit eGallon, which is the cost of fueling a vehicle with electricity compared to a similar vehicle that runs on gasoline. As of press time, the national average for gasoline is $3.22 per gallon, whereas the electric eGallon is $1.23 — about one-third the cost. While this is based on the price of gasoline, not diesel, it at least provides a frame of reference to perform reasonably accurate payback calculations.

2. Lower Maintenance Costs

The CalHEAT report noted that vehicles driven 15,000 miles per year achieve maintenance savings around $1,300 compared to conventional trucks.

The report cited the following reasons for the savings:

  • The battery, motor, and associated electronics require little to no regular maintenance.
  • There are fewer fluids to change.
  • Brake wear is significantly reduced, due to regenerative braking.
  • There are far fewer moving parts, relative to a conventional internal combustion engine.

3. Increased Productivity

Short-range applications that exceed 50 stops per day actually prove problematic for diesel-powered trucks with new diesel emissions technologies, such as diesel particulate filters (DPF) that require periodic regeneration cycles to burn off soot.

Since the vehicles rarely go faster than 45 to 50 mph in these applications, they don’t have sufficient time to travel at highway speeds to allow for a full regeneration cycle during the course of daily business. Therefore, drivers need to take time out of their delivery schedules to either stop for DPF regeneration or travel at highway speeds long enough for the regeneration cycle to complete. Either way, this eats into driver productivity and fuel efficiency. With E-Trucks, the time lost for DPF regeneration is eliminated.

Overcoming the Challenges

The biggest challenge for E-truck expansion is the price premium above conventional trucks, which is largely driven by high battery costs. But, according to CALSTART’s most recent E-Truck Task Force Report entitled “Best Fleet Uses, Key Challenges, and Early Business Case for E-Trucks,” battery costs have been dropping and are expected to continue the trend, from a current $800 per kilowatt hour (kWh), to $500-$600 in 2015, $450 per kWh in 2020, and $300 per kWh by 2025.

To narrow the price gap in the near term, the report recommends rightsizing batteries to better match how the vehicle will actually be used. But, it’s crucial to strike the right balance, said the report, because a smaller battery would require more frequent, deeper discharges, which could reduce battery life and increase cost in the long run.

Another cause for concern for fleets is the limited dealer and service network for E-Trucks. According to the E-Truck Task Force Report, fleets perceive there is little local support for E-Trucks and there are some high initial vehicle failure and reliability rates.

“While manufacturers have been generally very responsive to problems, local and regional support needs improvement, as does training for fleet technicians. The service network is not sufficiently built out, and parts are not in local supply,” the report said.

One key for E-truck OEMs to expand their footprint and production capacity is greater access to capital, said Abramson with ZeroTruck.

“The industry needs investment banks, private equity, and venture capitalists to take another look at the commercial side of EVs versus just passenger EV markets. With EV trucks, there is a definable ROI for fleets of about three to five years,” he said.

“The biggest challenge at this time is the lack of mass-produced medium-duty vehicles,” added Andrew Daga, chief executive office for Momentum Dynamics, which develops high-power wireless charging technologies for the automotive and transportation sectors.

Daga noted that commercial EVs represent a vast market opportunity, where the economic justification is objective and clear to fleet operators. “To open this market, what is needed is the economic advantage of mass production to bring vehicle acquisition costs down,” he explained. “The movement of a major commercial vehicle OEM into the medium-duty EV market will provide the business stability that fleet buyers are looking for. They require vehicle reliability, dependable supplies of spare parts, and warranty coverage. There are numerous smaller companies that can meet the technology need, but lack either stability or the ability to mass-produce and leverage an established supply chain.”

Taking a Market Outlook

What are the prospects for E-Trucks going forward?  “ZeroTruck believes that medium-duty EVs will represent 25 percent of the medium-duty market for fleets driving under 100 miles,” said Abramson with ZeroTruck. “In 10 years, that number will double due to mandates for carbon output which only electric can achieve at sufficient payback. And, as battery technology evolves, longer-range markets will open up after the initial fleets demonstrate the reliability and return that EVs can offer.”  

Momentum Dynamics’ Daga agreed: “Medium-duty electric vehicles will gain in range and reliability through the practice of rapid opportunity recharging. In the near term, we will see fleet managers assign EVs to their shortest routes until they gain confidence, but they will soon learn that they must put that vehicle to use on the longer, most stressful routes so it can really impact their costs. Again, it is rapid opportunity charging that will enable this to happen because rapid opportunity charging extends vehicle driving range.”

Daga predicted that there would be major automaker investments in the smaller “technologically agile” companies that are developing efficient EV power systems and drivetrains for the medium-duty market, with acquisition activity beginning in 2014. “I would also expect the major leasing and finance companies to move in concert with OEMs to provide EV-specialized financing programs that account for longer vehicle lifetimes and the inclusion of charging infrastructure,” he said.

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