Despite significant government and private-sector investment over the past 10 years, the global market for hybrid, plug-in hybrid, and pure electric trucks has been slow to grow. Although it’s challenging to get fleets to provide numbers on how many of these trucks they are running – many companies view it as competitive information –the Navigant Research report, Transportation Forecast: Medium and Heavy Duty Vehicles, estimates that, in 2014, hybrid and plug-in technologies constituted well under 1% of medium and heavy duty (MHD) trucks fleets in North America and Western Europe. This lack of progress matters, because MHD trucks account for 32.6% of U.S. fuel consumption. Electrification could significantly reduce this rate of fuel guzzling. Yet, as my colleague John Gartner noted in a recent blog, there is a real lack of PEV options in the trucking world.
Investment in these technologies has borne fruit, however, and will help the electric drive truck market grow. Deployments have helped fleets determine the applications for which hybrid or plug-in trucks will work best, both in the sense of being able to meet the demands of the duty cycle, but also providing the greatest fuel savings benefit. The range of MHD truck applications into which hybrid and plug-in technology can be integrated is broad, with widely varying performance requirements.
Filling the Gaps
First are vocational applications, including delivery and distribution trucks, such as refrigerated vehicles and service vehicles, especially those used by the utility and telecommunications sectors. And within these segments, there is a multitude of usage patterns. Delivery trucks may be long haulers, traveling at steady, high speeds; used for suburban delivery, operating with both high and low speeds; or used for delivery exclusively within an urban center, with stop-and-go driving and very low mileage.
All of these variances mean that there is no single technology that will meet all the needs of the trucking sector. Thus, this sector will be highly segmented, with each technology option fitting into certain niches. While hybrids have no range limitations, it can be challenging to achieve payback of the price premium unless the vehicle operates with some stop-and-go driving and accrues significant mileage – probably a minimum of 20,000 miles annually. By contrast, while the range of a pure battery electric truck has proven too short for most applications, these trucks are ideal for deliveries within an urban center. This application is likely to see more interest in the Western European market in particular, as cities are increasingly looking to limit vehicle access to the city center.
So, as the British say, it’s horses for courses for the trucking industry. This will pose a challenge for the sector given the very high percentage of small firms supplying this market. These are companies that may struggle to stay afloat in a market with low volumes in its early stages.
But pressure on truck OEMs and fleets to reduce the environmental impacts of their vehicles – a major theme of the Automotive Megatrends conference held by Automotive World in Brussels in September – is likely to increase. A small company with a proven technology will find increased interest from fleets to trial new vehicles and perhaps interest from the major vehicle manufacturers in securing access to their technology through investment or acquisition.