Electric trucks take to the fast lane, study says

Market news |
By Christoph Hammerschmidt

By 2035, more than half of newly registered trucks in Europe, the US and China will be electric. By 2040, the share of battery-electric commercial vehicles and those with fuel cells will rise to more than 85% of new registrations. This is the result of a study presented by the consulting firm McKinsey & Company at the IAA Transportation 2022 in Hanover.

Decarbonisation is the maxim to which the entire economy is currently orienting itself – and so is the mobility industry. But while there is already a clear trend towards electrification in passenger cars, the manufacturers of commercial vehicles, especially heavy ones, seem much less determined, apart from prototypes, pilot projects and a few practical tests: the batteries are too heavy, the ranges too short, the fuel cell drives too expensive as an alternative to battery drives.

But this is changing, as can be seen at the commercial vehicle trade fair IAA Transportation (20-25 September). “As far as decarbonising their vehicles is concerned, the commercial vehicle industry is in the starting blocks,” says Bernd Heid, senior partner at McKinsey and co-author of the study “Preparing the world for zero-emission trucks.”

“The industry represents 5% of global greenhouse gas emissions worldwide,” Heid said. “The path to decarbonisation will be shaped by regulation, advances in technology and cost, as well as market dynamics and infrastructure.”

Total cost of ownership (TCO) is the most important parameter from a user’s perspective when choosing a commercial vehicle. Here, the McKinsey analysis shows that in 2030 battery-electric and fuel cell-powered trucks will be more cost-effective than diesel-powered trucks in almost all segments. In certain niche applications, biofuels or synthetic fuels may also play a role in the future – despite higher costs. “We will see a portfolio of decarbonisation solutions in the commercial vehicle industry,” says Heid. Differences in technology costs, infrastructure availability, different usage profiles and local energy prices would have an impact on fleet operators’ purchasing decisions.

The powertrain transition requires substantial investments in production capacities and infrastructure in Europe, the USA and China. 12 additional battery factories, each with a capacity of 25 GWh per year, would need to be built by 2030; the infrastructure – charging stations and hydrogen refuelling stations – will require investments of $450 billion. Commercial vehicle manufacturers will launch more than 70 zero-emission truck models in Europe and the USA by 2024. Because of the still comparatively short ranges, these models will be designed primarily for urban and regional delivery traffic. However, these models will still only account for 2% of the total production volume in 2024. “The changeover will be gradual,” explains Heid. Thus, in 2030, 9 out of 10 trucks on the road will still be conventionally powered, and in 2040, 6 out of 10.

Nevertheless, the momentum is also noticeable on the part of commercial vehicle buyers. In a global survey of more than 400 fleet operators in spring 2022, 60% said they had announced specific decarbonisation targets. Around one-third of the respondents in each case cite limited battery life – trucks have a longer period of use than passenger cars – long charging times and limited range as key obstacles to the introduction of battery-powered trucks. For fuel cells, 3 out of 10 fleet managers express concerns about higher maintenance costs and possible higher total cost of ownership; a quarter worry about possible reliability issues.

“The value chain in the commercial vehicle industry is being reassembled by decarbonisation,” says Philipp Radtke, senior partner at McKinsey and also a co-author. For example, he says, battery production – which accounts for 30-50% of the value of a commercial vehicle – is being fought over between manufacturers, suppliers and battery specialists. The new technologies also show up in the operation of the vehicles. Radtke: “We will see a swing to ‘truck-as-a-service’, where new offerings will emerge from financing and insurance to maintenance and services to infrastructure and energy provision.”

The study can be downloaded here.

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