Is The Future Focused On Electric Auto Transport Carriers?

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Is The Future Focused On Electric Auto Transport Carriers?
Is The Future Focused On Electric Auto Transport Carriers?

Today, less than one percent of fleet vehicles run on by electricity, but that is rapidly changing, with the total expected to reach 12 percent in the next ten years, according to a survey reported in Greenfleet Magazine in December. Interest in zero-emission trucks is rapidly growing. Trucks.com predicts a tremendous surge in the variety of models available in the US and Canada—195 by the end of 202, compared to just 90 last year. 

What are the pros and cons of electric fleet vehicles?

60% of the fleet owners surveyed said that electric trucks are their best option for clean vehicles, although they express concerns about charging infrastructure, range, and price. Although Greenbiz reports that 80 percent of freight in the US travels less than 250 miles, fleet owners are concerned about their company's ability to support charging capability. Fleet owners who are considering converting to electric may be responding to various factors, including changing regulations. In June, California adopted the Advanced Clean Truck rule, which requires the sale of electric trucks in the state to begin in 2024 and moving exclusively to electric truck sales by 2045. California's Air Resources Board lauds this first-of-its-kind measure for its significant potential to reduce emissions. The Board stated that despite accounting for only 2 million of the 30 million vehicles registered in California, trucks account for 70% of pollution and 80% of diesel soot and are more likely to impact low-income neighborhoods adjacent to ports and other commercial areas.

California often leads the way for the country in environmental standards relating to vehicles, which has given the state a great deal of influence with manufacturers, as evidenced by the recent negotiations to continue adhering to the 2012 environmental standards agreement even as the EPA has loosened regulations. All of this points to a surge in demand for electric options for commercial fleets. 

Who are the power players in electric truck manufacturing?

Roger Nielsen, CEO of Daimler Trucks North America, believes that the future is electric, but doesn't think that electricity will overtake diesel as the primary fuel for long-haul trucking anytime soon. Daimler has renovated a plant in Oregon to produced battery-powered trucks. However, Nielsen maintains that the acceptance of electric-powered commercial trucking still has three obstacles:

  • Common charging infrastructure
  • Cheaper, lighter and more powerful batteries
  • Lower total cost of ownership driven by increased incentives and lower maintenance and energy costs.

Daimler’s Freightliner eCascadia will only have a 250-mile range, and the eM2 106 will top out at 230. Neither is ideal for long trips. Daimler presently holds 40 percent of the US heavy-duty truck market but is unlikely to lead the way into long-haul zero-emission. 

Daimler will be challenged by start-up (and upstart) Nikola Motors, based in Phoenix. Nikola is developing two models for the US, which will have the option of electric or hydrogen fuel cell electric capabilities, and ranges between 500 and 700 miles. Nikola is planning to build out a network of 700 hydrogen fueling stations across the US by 2028. The anticipated fueling time is 10-15 minutes, and Nikola says the stations will be open to other models and will use renewable energy. Nikola, which notes that production will begin in 2021 and will begin with the electric-only vehicles before the hydrogen fuel cell option, has 14,000 pre-orders. 

Nikola recently went public in a reverse merger, according to CEO Mark Russell, and will start producing the hydrogen cell and electric battery semis in Ulm Germany, followed by the Arizona plant at the same time that the refueling stations are being built out. Nikola is continuing to pursue advances in battery technology but does not anticipate significant changes before the rollout of the inaugural models. 

Tesla, well-known for electric cars, is also preparing to produce semi-trucks. Production was initially announced for 2019 but has not started. Two models are planned; one with a range of 300 miles on a charge and the other with a range of 500 to 600 miles. Tesla claims that the semis will use less than 2 kilowatt-hours of power per mile and can sustain 60 MPH on a five percent grade. Further, Tesla touts a convoy advantage, which will enable two or more Tesla semis traveling together to save energy via drafting. Tesla also needs to build out its network of charging stations along with initiating vehicle production. Part of the “sell” for Tesla is that the operating costs will be substantially lower – as much as $200,000 per year more economical than a regular diesel. The Tesla prototypes look very futuristic, with a sleek visage, a central driving position, and huge screens on both sides of the driver. 

The others planning entry into this arena are focused on the short-range or local and regional delivery markets. BYD, Rivian, Workhorse, Volvo, and others are concentrating on short-range charges that involve fewer challenges than the long-haul mileage poses. For car carriers, it's mostly about the long haul. Industry thought leaders like Cristiano Façanha,  global director of green commercial vehicle accelerator Calstart’s Global Commercial Vehicle Drive to Zero program, believe that the advances being made in short-haul trucking and delivery vehicles now will pay off in results applicable to heavier duty, long-distance trucks soon.

Meanwhile, Hyliion has just announced the development of an electric drivetrain that can be built into a new class 8 truck or retrofitted into an existing one. The drivetrain is said to go up to 1000 miles between charges at a natural gas charging station (there is a network of 700 existing refueling stations). 

Will the car carrier industry convert to electric vehicles?

In 2019, the car hauling industry had revenue of over $12 billion ( according to the Global Car Carrier Market Report), spread across 4,500 companies. This figure has grown by 1.2% between 2014 and 2019. The report also noted that open-air car carriers still account for 82% of the business. 

Because the industry impacts public safety, it is heavily regulated. A trucker may not drive for more than eleven hours and perform other duties for more than 3 hours within any twenty-four-hour period. They must get 10 hours of rest in every 24 hours. There are weekly limitations, as well. Since drivers are usually paid by the hour or mile, they have an incentive to maximize their working hours. This compensation structure may cause reluctance to drive trucks that require more frequent charging. Still, that obstacle will decrease as the battery life increases, and charging facilities' convenience improves.

On the other hand, like all transportation-related fields, profitability hinges on the ability to keep costs down. As the cost of batteries improves, electric trucks may make more economic sense than diesel. Both Tesla and Nikola predict that the maintenance costs of their electric trucks will be more attractive over time than diesel, making that tide likely to keep rising.

Sources used

Greenfleet Magazine

Trucks.com

Greenbiz.com

Greencarreports.com

Lexisnexis.com

Washingtonpost.com

Autoevolution.com

Transporttopicnews.com

Joe Webster
Written By:Joe Webster
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Joe Webster began his journey in the auto transport field by attending the University of Southern California (USC), where he graduated with a Bachelor of Business Marketing. 

After college, he started his career in the auto transport industry from the bottom up and has done virtually every job there is to do at A-1 Auto Transport, including but not limited to: Truck Driver, Dispatch, Sales, PR, Bookkeeping, Transport Planner, Transport Manager, International Transport Manager, Brokering, Customer Service, and Marketing. Working with his mentor Tony Taylor, Joe Webster has learned the ins and outs of this industry which is largely misunderstood. 

With over 30 years experience in the industry, we've been helping people ship their vehicles, motorcycles, RV's, heavy equipment, household goods and more across the country or overseas without a hitch. Ask us anything.

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