Major manufacturers are collaborating to promote the rollout of infrastructure for electric heavy-duty vehicles
EXPENSIVE TOLLS
Government subsidies can help lower the initial outlay for transport operators to purchase electric trucks before costs are competitive with the diesel-powered incumbents
POWER LINES
Charging infrastructure along major transport routes in Europe is lacking, particularly for heavy-duty vehicles
KEY QUOTE
Within a few years, we will witness a massive shift towards electrified battery-driven HDVs and the share of electrified HDVs will grow much faster than we have expected so far
In April, Swedish company Volvo Trucks put three new heavy-duty electric truck models up for sale. With this launch, the manufacturer now has six heavy-duty battery-powered electric trucks ranging from 16 to 44 tonnes available for purchase across northern Europe. HDVs are defined as freight vehicles of more than 3.5 tonnes. The announcement forms part of a growing trend. Volvo Trucks is just one out of several heavy-duty truck manufacturers expanding their portfolio of battery-powered vehicles. After many years of questioning the feasibility of electrifying the heavyweights of road transport—the haulage industry is on the verge of a, “Breakthrough for electric heavy-duty vehicles,” says Daria Rivin from Green Transition Denmark, an NGO. To date, deployment of electrified heavy-duty vehicles (HDVs) has remained at a pilot project level. According to the European Automobile Manufacturers Association (ACEA), almost 98% of all trucks in the European Union still run on diesel fuel. At the start of 2021, just 2300 vehicles—0.04% of the bloc’s total fleet—are currently zero-emission trucks, however, “electrically-chargeable” trucks comprised 0.4% of all new truck registrations in 2020, according to ACEA. “We are witnessing a growing momentum brought about by technological advances from manufactures and increased political ambitions. Within a few years, we will witness a massive shift towards electrified battery-driven HDVs and the share of electrified HDVs will grow much faster than what we have expected so far,” says Rivin. Transport & Environment (T&E), a European think tank that focuses on mobility, believes the number of new electric HDV models being announced by manufacturers is a sign of confidence in a rapidly growing market. “If you combine these announcements, it shows that you can expect 40-50% of the HDVs sales will be zero-emission by 2030 in the EU. We expect to see the same development in regards to electric HDVs as we have seen the last couple of years in the private car market,” says Lucien Mathieu from the think tank.
POLITICAL PUSH In 2019, the global electric HDV market was valued at €375 million but is now projected to reach €1.7 billion by 2027—a 25.8% average growth rate. At Volvo Trucks’ Swedish headquarters, they are acutely aware of the business opportunities the stirring market will create. “We are seeing better performance of batteries, clearer financial logic, new industry partnerships, growing customer demands and government incentives that are pushing electrified HDVs forward,” says the manufacturer’s Jonas Odermalm. Road transport currently accounts for almost one quarter of Europe’s total CO2 emissions with HDVs responsible for 27% of that total. Transport related carbon emissions have not yet been curbed. But with the EU’s Fit-for-55 package of climate policies for the next decade, unveiled in July 2021, efforts to accelerate the electrification of transport and HDVs more specifically has been increased. The EU has upped its ambitions and now aims for 110,000 battery-powered trucks and 60,000 hydrogen-powered HDVs by 2030. According to the ACEA, however, the EU needs to grow its electric fleet of HDVs to more than 200,000 by 2030 to meet the CO2 targets for transport.
COST OF TRAVEL The EU has revised its so-called “Eurovignette Directive” that set out standards for an optional levy for road users based on vehicle CO2 emissions standards. The European Council and Parliament recently agreed to revise the directive so diesel and gas HDVs would be charged a higher price when driving on toll roads in Europe. At the same time, road pricing will be significantly lower for electric HDVs. Until 2025 zero-emission trucks can be fully exempt from paying the road tax. The EU has also recently revised the so-called Alternative Fuel Infrastructure Directive and proposed binding targets for setting up charging stations along the core European Trans-European Transport Network (TEN-T) and in urban areas by 2025 before expanding further by 2030. According to Green Transition Denmark’s Rivin, these changes are a main driver of demand for electric HDVs. “We can now see an expiration date of fossil-fueled transport and that is something that the entire transport sector is realising,” Rivin says. At a national level, the political incentives and regulations pushing towards electrification are also moving fast. Sweden’s government has allocated more than €123 million to set up fast chargers for electric HDVs by 2021-22 and has provided a subsidy to cover 40% of the additional costs of buying an electric HDV. In Germany, the government plans to spend over €5.5 billion to ensure that a third of all distance driven by trucks in 2030 is powered by electricity. Germany is considering a subsidy to over 80% of electric HDV purchase costs. The pressure to electrify heavy-duty transport is also increasing outside of the EU. In 2020, the US state of California passed the Advanced Clean Trucks Regulation, which states that a set percentage of HDVs sold must be zero-emission from 2024. The percentage increases each year and varies depending on truck classification. DANISH DELAYS In Denmark, the market for electric heavy-duty vehicles is slower than its regional neighbours. Joakim Bansholm Nilsson from Volvo Trucks Demark believes the difference in running costs between electric HDVs and diesel-powered vehicles, and an absence of government support are the two main reasons for the lacklustre Danish electric HDV growth. “The market is there, the interest is there, but due to the fact that the total cost of ownership (TCO) is so far from where diesel is at the moment then we see that it is really a tough sell. We can only sell to those companies who have the financial muscle and also the willingness to be pioneers,” Nilsson says. As is the case in many areas of the energy transition, it is the upfront costs of new technologies that prove to be a barrier for many end-users. “With a truck that could run 50,000 kilometres, it’s approximately two and a half times more expensive than the diesel truck,” Nilsson explains. “What we’ve seen from other countries is that in order to get the sales moving, you need to at least cover somewhere between 60% and 80% of the difference in price. Germany has gone in with an 80% incentive scheme that covers the difference and that has started to really shift the market.” Nilsson says a change in Denmark’s tax law and a support scheme should be implemented if the country is serious in cutting its transport emissions total. “It should be technical barriers and not financial barriers that hinder us at this moment,” he adds.
IMPROVING BATTERIES The development of battery technology, once seen as a major barrier for heavier forms of transport, has advanced to the point where it is now the preferred technology of choice among HDV manufacturers. German manufacturer MAN is aiming to develop electric trucks capable of travelling 500 kilometres on a single charge by 2024, followed by models capable of achieving 700-1000 kilometres. Volvo Trucks’ new electric models, weighing up to 44 tonnes, already boast a range of up to 300 kilometres. The Swedish manufacturer believes with the technology already available up to 45% of all heavy-duty transport in the EU could be electrified today. “Battery-driven electrified HDVs are currently the alternative [technology] that we are closest to being able to scale, make profitable and roll-out—and which is also the most energy efficient,” says Henrik Gudmundsson from Danish green think tank Concito. Gudmundsson says biofuels are being ruled out and there are, “Indications that with the current pace progress, direct electrification will likely supersede hydrogen also in regards to the longer distances,” he says. T&E’s Mathieu also regards hydrogen as a niche solution for HDVs which could see some applications for specific use cases like at seaports or industrial clusters where green hydrogen ecosystems develop. Thanks to the development of batteries and because of hydrogen’s higher energy loss when converting power into fuels, battery electric trucks are bound to be the dominant technology. Hydrogen is three times more energy heavy than batteries, he says.
SERIES PRODUCTION Major manufacturers including MAN, Daimler, Tesla, Volvo, Scania and China’s BYD are boosting production numbers of electric HDVs. According to T&E, production targets of manufacturers could lead to 500,000-600,000 HDVs by 2030—but only if the demand is sufficient. With series production, the price is expected to “drop significantly,” Rivin says. “So far, electric trucks have largely been produced on demand and individual orders, which has kept the price high. As the first HDVs come into series production, it will become more economically feasible to buy these models,” she adds. The Lawrence Berkeley National Laboratory (LBNL), the United States Department of Energy’s research organisation, suggested that because of political support and technological improvement, the total cost of ownership for electric trucks could be 50% cheaper than for diesel trucks by 2030. LBNL also predicts the cost of batteries could fall to around €53 per kilowatt-hour (/kWh)—down from the current global average of €120/kWh—by 2030. An LBNL report in early 2021 found the cost of an electric HDV could realise net present savings of about €178,000 over a 15-year lifetime of the vehicle. The improved price point will make the share of electric HDV sales grow faster than the private electric car market in the coming years because companies will become aware of the total cost of ownership. 
Service vehicles
It is not just haulage vehicles that can benefit from electrification, inner-city service vehicles are also examples of heavy-duty transport that are using battery power
FLEET ELECTRIFICATION One company taking steps to electrify its fleet is consumer goods retailer Coop, which has more than 1000 supermarkets across Denmark. In 2019, it presented a climate strategy to reduce emissions from all three scopes and aims to become carbon positive by 2030. “One of our primary efforts in that plan is to reduce the footprint of transportation,” says Nicki Pagh Børgesen, head of energy at Coop. Coop bought 23 electric vans to carry out delivery services in urban areas and invested in its first HDV from Swedish truck manufacturer Scania in 2020, which can travel 140 kilometres on a single charge. It has plans for up to seven additional electric HDVs by the end of 2021, which are primarily to be used between central warehouses and supermarkets. The main barrier for further fleet electrification is the supply of electric trucks, according to Pagh Børgesen. “It is not an off-the-shelf product and it has been difficult for us to get electric trucks to Denmark. There was only one electric truck available for the Danish market from Scania, so we couldn’t buy any more.” He is therefore very positive about manufacturers like Volvo announcing new models and scaling up production. “For us, it is not the economic perspective holding us back, but that we are testing our current models and that we are waiting for the opportunity to buy more than one electric HDV. We are looking forward to having more models to choose from,” Nicki Pagh Børgesen says. 
CHARGING PROBLEMS Even as the numbers of electric HDVs rise, charging stations and the associated infrastructure is almost completely missing. The ACEA estimates that the EU will have to set up as many as 15,000 high-performance public and destination charging points before 2025 and up to 50,000 high-performance charging points before 2030. There is also a growing political focus on this with the proposal for binding targets for charging points along a core network across Europe. But according to Daria Rivin the efforts should be scaled even further. “The binding targets on the roads are one important step, but we also need binding targets for fast chargers at transport and logistics centres, where the main part of the charging of HDVs will happen,” says Rivin. Lucien Mathieu, from T&E, says the main task is to look at private and commercial plans for charging infrastructure. “We need to engage the entire ecosystem and scale the infrastructure investments—here the progress is very slow at the moment.” Some private firms are taking up the challenge. Volvo Trucks, Daimler and Traton—a subsidiary of VW—joined forces to set up a joint charging station network throughout Europe. They agreed to invest “€500 million to install and operate at least 1700 high-performance green energy charging points close to highways as well as at logistic and destination points, within the next five years.” Ensuring green energy for the charging points is a declared goal in the partnership, but more specific plans in regards to this have not yet been made public. According to Jonas Odermalm from Volvo Trucks, these joint ventures and investments are vital. “Even if many hauliers can start their electrification journey with overnight charging at the home depot, we need more attention and increased efforts on getting the infrastructure in place that can help ensure that the market for electric HDVs is attractive. And that requires that we also work together to get a scale,” he says.
OVERHEAD CABLES One of the proposed solutions being looked at as a supplement to the numerous charging stations is e-highways—roads that supply electric power to vehicles travelling on it from overhead cables. Small scale e-highway projects are underway in Sweden and Germany, with further projects being developed in France and Italy. In Germany, around 15 kilometres of these so-called electric roads have been installed. Estimates show that by electrifying a third of the German motorways, as much as 80% of the country’s heavy road transport can be powered by electricity. “This can be an important step in electrifying transport and HDVs. We have the technology from years of electrified railways, it is effective and a fast way to get HDVs out on the regional roads,” Concito’s Gudmundsson says. “Even in a future where HDVs can drive long distances on batteries, it will help ease the pressure on superchargers.” He also says that the success of e-highways relies on standardised cross-border solutions, “So that we do not end up with the same situations with the electric trains, where we have many different systems in the EU that do not communicate very well. We must ensure that there is a common system and plan for the roll-out across borders in the EU—this applies to both e-highways and charging stations.” T&E’s Mathieu believes e-highways may still be a pipedream and are not on the table for the EU’s agenda. “It is a very elegant technology but we don’t see a current consensus or momentum for this right now. And it has to become a common target for all EU member states if it is to play a role,” he says. •
TEXT Anna Fenger