The reality of e-trucks: challenges and opportunities
By: Diederick van Haselen, Global Equipment Director at TIP Group
E-trucks are a hot topic, but the reality is less rosy than often portrayed. The adoption of electrification is progressing more slowly than anticipated. Nevertheless, there are steps the sector can and must take to achieve more sustainable transport. The transport sector is at a tipping point where transitioning to electric trucks presents complex challenges and new opportunities.
Feasibility of using e-trucks
For transport companies, switching to e-trucks must be financially attractive or feasible. The sector is highly competitive, transport companies often operate with small profit margins (0 to 2%). Therefore, these companies try to cut costs as much as possible to remain profitable. Something important to keep in mind when thinking about switching to e-trucks. The investment should pay for itself through lower operating costs, subsidies, or other benefits. With the help of subsidies, some countries, such as the Netherlands, Germany, Norway, and Switzerland, can achieve a break-even point between diesel and e-trucks. This means the total cost of ownership of e-trucks become comparable to diesel trucks. Extensive subsidy programs are still needed to make electrification across Europe attractive and a positive business case.
Expanding charging infrastructure
Improving and expanding the charging infrastructure is another major challenge. Charging an electric truck is comparable to charging seven Tesla cars simultaneously, which must happen daily. This requires a robust charging infrastructure, which is very different and much more expensive than passenger car chargers. Another important aspect is the capacity of the electricity grid. The current grid cannot handle the additional load of a large number of electric trucks. Therefore, investments in grid expansion and smart networks are necessary.
Although the transport sector is often seen as conservative, there is a willingness to look ahead and contribute to a greener future.
Decreasing purchase costs of e-trucks
Despite the challenges, there are also positive developments in the sector that are slowly but surely supporting the transition to greener transport. While it is still possible to continue using and ordering diesel trucks, this will become increasingly more expensive due to rising tolls, taxes, and diesel prices. Currently, the total costs of ownership for electric trucks are higher than for diesel trucks, but this gap is slowly closing. The exact timeline is difficult to predict, but it is expected to change within the next five to ten years. In the market, we are already seeing a decrease in the purchase costs of e-trucks. Where prices were once four times higher than diesel trucks, they have now dropped to two and a half times in some countries. And this decline will continue, similar to the development of electric passenger cars.
The decreasing purchase cost of electric trucks is not the only driver of adoption; innovations in battery technology are also a factor. Future batteries will charge faster, last longer, and weigh less. Within five to ten years, batteries will have a better range and be lighter, which is necessary to solve the payload problem. Currently, batteries are still relatively heavy, limiting the amount of cargo drivers can carry. And it is this cargo that is their livelihood. There are already regulations for light commercial vehicles, such as vans and buses, that allow higher weights, making electric driving more attractive.
In addition, many transport companies are beginning to realise they may not need as much range as they initially thought. A diesel truck can travel over 2,000 kilometres without refuelling, while an average electric truck can travel about 300 kilometres. However, the ability to travel such long distances is often an unnecessary old habit. About 60 per cent of transport companies drive less than 400 kilometres a day, so they can operate with an electric truck if the goods they transport are not too heavy. Driving during the day and charging at night, or vice versa, is feasible. Drivers need to stop regularly to rest, which is a good time to charge both themselves and the truck. This requires a change in mindset but can be practical and efficient.
What needs to be done?
To take greener steps into the future, it’s beneficial for transport companies to begin making changes now, even if there are challenges. Here are two steps that can help ensure a smoother transition to electric trucks in the future.
- Ensure energy supply
One key piece of advice for transport companies is to secure the energy supply for the future now. This can become a problem, as we already see in Amsterdam, where energy availability is limited. For areas with enough energy available, it is crucial to claim it now. The electrification of households, passenger cars, and transport has just begun and will increase significantly. The current electricity grid is not ready for this rapid growth. Therefore, plan and request the necessary power supply from local governments and grid operators in a timely manner. This is a necessary step; without sufficient energy capacity, charging stations cannot function properly. Both processes need to run in parallel. While companies arrange the power supply, they must simultaneously determine the locations and numbers of charging stations. For example, a leading truck manufacturer only start discussions with customers about purchasing e-trucks once the charging infrastructure is in place.
- Invest cautiously in e-trucks
Start immediately by investing in charging infrastructure and requesting power from the grid but be cautious with large-scale investments in e-trucks. We are currently in the first generation of e-trucks, and the technology is rapidly evolving. The second generation is coming with notable changes to specifications, such as double the range for half the price. Large companies with a green agenda and early adopters have invested in a small number of e-trucks to gain experience and to test the technology. Many are now waiting to see how truck prices and specifications develop and how the charging infrastructure improves. This approach ensures they gather valuable insights while preparing for larger investments in the future.
Companies need to strategically invest and plan now to pave the way for the adoption of electric trucks. Just as a farmer prepares and sows his fields to harvest later, transport companies need to start sowing now. By acting proactively and making smart choices, we can reduce the ecological footprint and reap the benefits of lower operating costs and improved efficiency. The result? A stronger market position in the future. I invite you to reach out to your local TIP experts to electrification of your fleet, and find the best solution for your business needs.
