Commercial vehicles charge toward electric future

Electric charger outside office building

Commercial vehicles are going electric through launches of demonstration fleets of varying sizes testing the viability of running on battery power or hydrogen fuel cells instead of diesel.

In a study by M.A. Mortenson Co. based on interviews at the 2019 Advanced Clean Transportation Expo, 60% of respondents said electricity is the best clean technology option and 80% said they think the range between charging will meet their needs within five years. 

“We have high confidence that in a couple of decades moving freight with electric and hydrogen fuel cell trucks is very possible and probable,” said Mike Roeth, executive director of the North American Council for Freight Efficiency. “I’m not so sure we would have said that two years ago.” 

Pickup and delivery

Smaller commercial vehicles, like pickup and delivery vans, get the most interest because their electric propulsion systems require fewer batteries that take up space for cargo. They also keep regular routes and can be recharged after hours at a centralized facility with a minimal energy draw. Frequent stops add energy back into the vehicles through regenerative braking.

According to the U.S. Department of Transportation, 37% of freight moved less than 100 miles in 2015.

Startup van makers like Chinese-backed Chanje Energy are already deploying their products. Chanje’s 30-foot-long V8100 Class 5 electric medium-duty panel van can travel 150 miles between chargings and carry a 6,000-pound payload. Ryder System Inc. (NYSE: R) purchased 1,000 of the vans, which it is leasing to FedEx (NYSE: FDX). 

Workhorse Group Inc. (NASDAQ: WKHS) has a pending order of 950 composite body electric stepvans from United Parcel Service (NYSE: UPS).

Electric pickup truck startup Rivian has a record order from Amazon (NASDAQ: AMZN) for 100,000 vans built on its skateboard chassis. Amazon led a $700 million investment round for Rivian in February 2019.

Regional delivery

Regional delivery and the rise of hub-and-spoke distribution is driving interest in Class 6 medium-duty electric trucks. 

Freightliner, the nation’s leading commercial truck maker and a Daimler Trucks North America brand, has placed 10 eM2 Class 6 box trucks with Penske Truck Leasing. Daimler’s Fuso brand has more than 50 electric-powered cabover Class 6 eCanter box trucks being tested in major cities around the world.

Kenworth and Peterbilt, sibling brands of Paccar Inc. (NASDAQ: PCAR), have retrofit versions of their cabover Class 6 and Class 7 trucks coming this year from powertrain supplier Dana Corp. (NYSE: DAN).

Peterbilt also worked with Meritor (NYSE: MTOR) and electric subsystem supplier TransPower on several dozen medium- and heavy-duty electric trucks. Five of the medium-duty electrics are being used by Frito-Lay for deliveries in Southern California.

Navistar International Corp. (NYSE: NAV) showed its first electric truck, a medium-duty International eMV, at the North American Commercial Vehicles show in October. Navistar’s plan is to offer end-to-end support for electric truck customers, including assessing and locating power sources for charging, maintenance and battery swapping when it becomes necessary.

“The complicated piece of this is not the truck,” Rich Mohr, Ryder chief technology officer for fleet management solutions, told FreightWaves. “It’s really charging and visibility.”

XOS Trucks, a Los Angeles startup that assembles electric system components, has retrofitting deals with UPS for two demonstration electric trucks and with Loomis Armored for two cash-hauling armored vehicles.

Mack Trucks recently delivered its first electric-powered refuse truck to New York City for testing. It is based on parent Volvo Group’s European executions for trash hauling and city delivery. Daimler also has a Mercedes-Benz electric refuse truck coming in Europe.

Motiv Power Systems, a 10-year-old company that converts medium-duty truck chassis from gasoline to run on batteries, raised $60 million in equity funding in 2019 from Winnebago Industries Inc. (NYSE: WGO) and a private holding company in Colorado. It has even electrified Winnebagoes for use as medical labs and preschools. 

Dockside applications

XOS also created the propulsion system for a Wiggins Lift Co. electric-powered forklift capable of handling 30,000 to 70,000 pounds.

Meritor and TransPower teamed up on a deal to retrofit 38 Kalmar Ottawa electric yard tractors for the ports of Long Beach and Oakland, California, where pollution from idling trucks and conveyance vehicles is so great that it causes upper respiratory health problems in neighboring communities. Penske ordered one of the yard Kalmar Ottawa tractors in October.

California is the state most motivated by the need for reduced emissions from commercial trucks. The state uses money it collects for excessive pollution by trucks to pay for incentives that reduce the cost of acquiring electric trucks. Grants for big projects like Volvo LIGHTS and the Freightliner Electric Innovation Fleet require participating companies to share in the costs.

In the Mortenson survey, fleets said they think it will take another dozen years of incentives before electric vehicles would be on a level playing field with conventional vehicles in up-front cost. The total cost of ownership (TCO) continues to fall as battery costs come down.

“We’ve gone from a place where a year and a half ago, we were at $350 a kilowatt hour to $160 an hour now,” Mohr said. “Imagine where it’s going to be in another 12 to 20 months from now.”

Heavy duty

Whie pickup and delivery and medium-duty applications make sense for electrification, there are some skeptics about the application to heavy-duty electric trucks, which continue to run primarily on diesel fuel.

The massive amount of batteries needed for a truck hauling up to 80,000 pounds crimps room for freight. The time needed to recharge, even with direct current to direct current fast charging, is still four to five times longer than filling up with diesel.

The biggest truck makers are undaunted.

Daimer launched 20 Freightliner eCascadia models into experimental use with Penske Truck Leasing for local deliveries and with NFI Industries for drayage runs to the ports of Long Beach and Los Angeles.

Chinese electric truck maker BYD plans 21 Class 8 electric trucks for use by Anheuser-Busch, which plans beer runs in four Southern California cities. The trucks have a range of 125 miles between charging and a top speed of 65 mph.

Peterbilt model 579EVs are in testing with several companies, including a one-year deal with Werner Enterprises (NYSE: WERN).

The Volvo LIGHTS consortium of 16 partners plans to launch 23 electrified Volvo VNR models as demos in Southern California. Its collaborators include Southern California Edison, which like other utilities, needs to figure out how to address the power demands of large electric fleets.

In a 2018 survey conducted by UPS and Greenbiz, 92% of respondents said their facility was not “very well equipped” to accommodate commercial charging needs. The Mortenson survey found infrastructure was the No. 1 barrier to clean transportation. Mortenson does commercial construction and develops real estate and energy infrastructure. 

The company that kick-started the shift to electric vehicles — Tesla Motors (NASDAQ: TSLA) —  unveiled its electric semi-truck in November 2017. Limited production is expected in late 2020, with volumes eventually reaching 100,000 trucks a year. 

One demonstration partner is Pepsico Inc. (NASDAQ: PEP) unit Frito-Lay, which took delivery of 15 units in Modesto, California, in October.

“I think [Telsa] kind of normalized it for everyone where they would discount it before,” said Ryder’s Mohr. “When you have someone that’s reputable like that pushing a product, I think it makes it more acceptable, so companies are willing to take a harder look at it.”

Battery breakthrough

The holy grail for electrification is better batteries that would allow longer ranges between charging. One such breakthrough may come from startup Nikola Motor, which is primarily working on hydrogen-powered fuel cell electric Class 8 trucks.

CEO Trevor Milton said chemical changes to the battery his company is working on would remove the nickel, magnesium and cobalt.

“All those are the heaviest and biggest materials in the battery,” Milton told FreightWaves. “So if you get rid of that, it opens up space for the rest of it. Theoretically, you could get four times the energy density of a regular lithium ion battery, but you won’t always get that. But you’re going to at least double or triple what a regular lithium ion would be.”