Electric trucks: a worthwhile investment?

The United States auto industry has been producing and creating more cost-efficient electric cars since the 1970’s. Companies such as Tesla and Nissan are the pioneers in this type of technology and now have competition from other world automakers. The demand continues to increase for more sustainable consumer products. However, one sector that is often overlooked is the electric truck freight automotive. Despite the lack of popularity and visibility compared to consumer automobiles, the fright and semi-truck business is quite crucial for the logistics of goods both in the U.S. and abroad. As governments and corporations find new ways to reduce carbon emissions, the supply chain infrastructure offers a perfect opportunity to reduce carbon emissions. 

Freight truck emissions are one of the more substantial carbon emitters in the world with an estimated 1.8 billion tons of CO2 released into the atmosphere in 2019* (62% of all cargo freight emissions). One of the easier ways that business could decarbonize their supply network distribution is to invest in electric trucks and freights.

The cost-effectiveness of Electric freight trucks.

• One of the important aspects in the push for a greener supply chain is making ensure “greener” provides a cost-effective solution. The cost analysis of operating a transport truck is based on several factors: 

• Electric Freight trucks are still more expensive to purchase upfront than their diesel counterparts due to the high battery costs. 

According to Forbes, A 375-mile range truck with the current battery price of $135/kWh is expected to cost as much as 75% more than a diesel counterpart. 

• In terms of cost per mile efficiency the electric trucks already seem to be a substantial cost-effective option.

“A Class 8 electric truck—the heaviest long-haul trucks, weighing more than 33,000 pounds -traveling an average of 300 miles a day would cost 13% less to own per mile than a conventional diesel truck” (Forbes). 

• Electric costs are based upon electricity demand; the cost of fueling can be substantially cheaper by charging during off demand hours. 

• There is a lower maintenance cost because the electric engines have fewer moving parts and thus receive less wear and tear than a normal diesel engine. 

A study of the Argonne National Laboratory shows that maintenance costs are 40% cheaper for Electric Vehicles (EV’s) than Internal engine combustion (ICE) vehicles.  

Total Cost of Ownership (TCO) – some additional factors:

• Depreciation

• Tax benefits

• Insurance 

The bottom line –This elevated initial investment makes most companies unwilling to switch their fleet, when considering that electric trucks do not have an efficient driving range compared to a diesel truck. For reference a normal diesel semi-truck can drive 2,100 miles before having to refuel the tank**, compare this to an electric truck that at 375-miles needs to recharge. 

How Sustainable are Electric Vehicles?

The three main factors to consider: 

• Electricity power matrix

• Freight production emissions 

• Battery waste management

One big caveat in the sustainable potential of this technology is the electric grid of the country where the freight trucks is being used. If the local energy matrix used to charge truck relies mostly from fossil fuels, then the carbon emission reduction becomes less expressive. 

The EPA points out Electric Vehicles (EV’s) are comparably better than fossil fuel engines since they have a 100% rate of carbon emission compared to the more reliant fossil fuel matrixes that use a high percentage but generally not 100% carbon emitting sources. The energy matrix across every country in the world is decarbonizing which makes EV’s a better sustainable solution in the long run. 

In addition, there is the issue of production; electric freight trucks can produce more carbon emissions in its production than normal trucks due to the energy intensive process require to produce the batteries in the first place. Overall, the total Green House Gas (GHG) emissions per lifetime for electric vehicles is lower than fossil fuel engines so it is a better option in the long run despite the short-term trade-off in increased carbon emissions. 

An outlying issue, yet to be addressed is the recycling of the EV batteries and the fossil fuel cars that are going to be replaced. For the solution to work diesel and gas automobiles will have to be reused or recycled. The solution for lower carbon emissions should not come at the trade-off creating another negative environmental externality.

Conclusion

In 2021, electric trucks are still in proof of concept, that has yet to be fully implemented. Additional research is needed to reduce electric battery cost and increase the mileage range per electric charge. There is potential for success in this environmentally friendly solution but it’s yet to prove to be economically feasible.

Companies should be on the lookout for improved electric truck technology, which will down the road create a greener supply chain.

If you have any questions about this blog post please email me at ppeebles@corcentric.com for information about our fleet procurement, fleet financing  and the GPO please click https://www.corcentric.com/fleet-solutions/.

Sources:

*According to our world in data

**According to Schneider National