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Gary Norman

Gary Norman

Gary is Oilprice.com's South-East Asia & Pacific correspondent. He writes about energy matters, geopolitics and international financial markets. 

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How Feasible Are Electric Trucks?

There is no denying that EVs are here to stay, or that as the technology improves so does their range of movement. It is indeed this range, or lack thereof that has deterred so many people from relying on EVs as their main means of transport. But as battery technology steadily improves, along with the infrastructure that ensures a charging point is never far away, this range anxiety becomes less and less of an issue. The viability of EVs as personal transportation that has long been in doubt has rapidly become a relative certainty, and even though, currently, total sales pale in comparison with internal combustion engine (ICE) vehicles, they are set to turn the entire industry on its head. It seems then, that in a very short space of time the implausible has become assured, but what if we take that implausibility and step it up a gear?

The shift from transport of people to that of freight is indeed massive, as surely are the expectations of potential customers. The inconvenience of range anxiety, ie the fear of being stranded with no means to reach your destination, becomes a legitimate logistical concern with enormous implication for profit margins, and ultimately the very survival of a business. If goods don't reach their destination on time, why would a customer continue to have faith in your promise to deliver? With this in mind the question of whether a gap in the market for an electric semi-truck even exists is certainly a valid one, and if so, is it able to be filled?

In April of last year Tesla seemingly answered both of those questions with the announcement of its semi-truck, with its usual reticence for details. At the unveiling of the truck last November, Tesla finally released some very impressive specs, but these specs posed more questions than they answered, with some asserting that they defied the laws of physics. Related: MIT's Miracle Energy Breakthrough

Tesla’s assertion that it can produce a truck capable of taking on tried and trusted diesels is empty unless it can find companies that have faith in its ability to deliver. As of January of this year there are 19 companies with that faith, including companies for whom delivery is their business, such as UPS and DHL, as well as companies like WalMart and Pepsi that rely on logistics as the backbone to their profitability. What are the factors that are encouraging such companies to have this faith in a product with a higher initial investment and a lack of certainty about performance?

That higher initial investment is between $25,000 and $55,000 based on the price of the average diesel semi. This may seem high at first, but when the running costs over the lifetime of the vehicle are considered it begins to look like a small price to pay. Given the comparative costs of fuel (assuming diesel remains constant at today’s prices) and maintenance, how long would en electric semi take to pay for itself? Obviously this depends on annual mileage. AJA global insight state that the average daily run for a long-haul, over-the-road truck driver is nearly 500 miles. Assuming a 5 day working week that works out to 2,500 miles per week, or 135,000 miles per year. Related: Iran Could Lose 500,000 Bpd If Trump Trashes Deal

At the unveiling of Tesla’s semi, Elon Musk stated that it would cost $1.26 per mile to operate, compared to diesel’s $1.51, a difference of 25c per mile. This equates to $33,750 annually, which is more than enough to pay for the increased outlay of its base model truck. To pay for the top model would require another 7.5 months - just under 20 months in total. This confirms the statement made by Jim Monkmeyer, president of Transportation at DHL Supply Chain. Whether Tesla can actually deliver on its lofty promises remains to be seen, but with potential savings of $300,000 per truck over a 10 year period, the haulage industry must surely be watching very closely.

Tesla is by no means the only company developing game-changing trucks. At least 9 other companies have announced plans to release vehicles that look set to change the shape of haulage, and we can only assume that there are still more that are yet to be announced. Their viability is by no means a certainty, as the specs on paper need to be proven in the real world, but given the rapid pace of EV development, the industry won’t need to hold its breath for long.

By Gary Norman for Oilprice.com

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  • jhm on March 05 2018 said:
    The oil industry is going to need to understand that electric trucks and other commercial EVs will move peak oil much sooner than expected. My own analysis suggests that commercial EVs will cause demand for diesel to peak about 5 years before private EVs can cause demand for gasoline to peak. In fact the fleet of EV buses already offsets about 4 times as much fuel as private EVs do. Energy analysts who have been projecting demand peak out in the 2030s or latter have been counting on freight as a long-term growth engine for oil demand. There is no longer certainty that this will be the case. The oil peak easily happens before 2030 if diesel peaks before 2025.

    Tesla Semi plans to produce 100k trucks per year with the next 3 years. This alone will carve over 100kb/d off of diesel demand growth each year. But other competitors, especially those in China, will not leave Tesla to have this market all to itself. If Tesla is held to a 20% market share by 2022, we are talking about over 500kb/d of diesel demand displacement per year. Even with more ships switching from bunker fuel to low sulfur diesel, diesel demand could peak as early as 2021. Indeed it is already in decline in China.

    I would also point out that the accelerated transition scenario of Tony Seba based on autonomous passenger vehicles applies here with even greater force without any need for autonomous vehicles. The key thing is the economics of fleet vehicles. If Tesla can carve 25c/mile off of hauling freight, sophisticated logistics companies will exploit this rapidly. Basically the only constraint to the rate of growth is how quickly batteries can be built for these trucks and charging infrastructure. So Seba had some good ideas, but totally missed that this will play out much faster and at a much larger scale with commercial EV fleets, where there is not need to replace drivers with robots.
  • Kr55 on March 05 2018 said:
    This long distance semi with a theoretical range of 500 miles is going to reliably drive 500 miles per work day for 10 years? Doubt it.
  • M. Hardy on March 05 2018 said:
    How much faith do we want to place in the reliability of electric trucks. Would you trust these vehicles to deliver critical supplies in the event of an emergency?

    The hurricanes this year in Texas and Puerto Rico are an excellent example. How are you going to deliver food into remote areas using electric trucks? If the regional or local electric grid is down, how are you going to recharge the trucks?

    How much of our food is grown locally, and how much is delivered on trucks? Is it wise to place that much faith in such a crucial delivery system that is so vulnerable to grid failure?

    In my opinion, feasibility is much more about "should it be done" than "can it be done."
  • Clay on March 06 2018 said:
    Personally, I'll believe Tesla's claims when I see them. As Daimler's president said, "the laws of physics are the same in Nevada as they are in Stuttgart."

    Musk is a clever marketeer, however, he does not even address power density issues, contenting himself to pooh-pooh fuel cells with a very scientific explanation: "All of this will soon become very clear."

    I'm sure his admirers are willing to believe that on pure faith alone. An abundant scientific literature and common sense advise me otherwise, however.

    M. Hardy's comment above underlines this.

    Meanwhile, FC trucks as those currently being tested by Toyota & Kenworth clearly provide a superior, more viable alternative, even - or especially - in the event of local grid failure, especially since H2 production and dispensing facilities are even less vulnerable and hazardous than standard diesel facilities.
    Musk is a handsome poster child.
    However, the real work is being done by legions of more realistic engineers toiling in anonymity.

    Just wait until:

    The Port of Los Angeles drayage capacities that are currently being put in place by Toyota (with huge REn H2 production facilities) are operational;

    The Nikola FC tractor hits the roads, fueled by a national H2 dispensing network built by Nel hydrogen.

    With superior range, power and economical and ecological performance, the Toyota/Kenworth/Nikola systems are clearly set to dominate Tesla trucks.

    Thus, M. Hardy, yes, FC tractors are feasible, "should be done, can be done," and as can already be seen, "are being done."
  • Doodlebug on March 07 2018 said:
    Clay,
    have you compared H2 costs per mile with BEVs?
    Even using DOE's 2020+ goals for H2 costs ($4.50/kg at the pump) they are multiples of electricity costs, and FCS upfront cost is no cheaper than a BEV system.

    My suspicion is that carriers will adapt to BEV range in order to capture the lower costs of BEV trucks. We haven't really seen much news on this, but routing software providers are already including BEV range in their planning tools.
  • TheWay on March 07 2018 said:
    I find it interesting that a lot of people in the comments are using ignorance as a justification to hate.

    @Kr55 - First of all, no one drives a truck to their maximum distance daily, so even if it losses some range in 10 years, it will still have no problems doing deliveries. Keep in mind also the 500 miles is based on fully loaded. Also an important thing to note is that most semis don't last 10 years and are replaced way sooner.

    @M. Hardy - Overall, electric trucks should be more reliable. That said like all things they will start out doing every day deliveries and eventually move on to doing critical and emergency deliveries.

    That said, I do have something that can answer your question as someone who has went through Hurricane sandy. My house electricity worked, but the gas stations electricity didn't! And without electricity, the gas pump don't work! So people with electric cars were fine but not so much for people with gas cars. Another incident was during the earthquake in Japan. The Japanese government had to borrow electric cars from manufacturers to help deliver supply because the gas cars couldn't.

    See that is the beauty of electric cars, they don't care how they are powered. As long as there is power somewhere, you can charge. As long as there is some way to generate electricity be it solar or diesel generator or natural gas or hydro, you name it, EVs can be charged. Tesla megachargers and superchargers will be backed up by batteries and powered by solar, even if the grid goes down completely (which is unlikely, usually just certain areas get knocked out), the Tesla superchargers and megachargers will be able to charge up the cars and trucks.

    @Clay - As Daimler's president said, "the laws of physics are the same in Nevada as they are in Stuttgart." and he is right. Except that says less about the laws of physics themselves and more of how far behind Daimler is technologically. Looking at the theoretical maximums of lithium ion, there is no reason why a 500 or ever a 1000 miles range semi is not possible. So if the physics is sound, it's only a matter of technology. Which isn't surprising since Daimler had to resort to use Tesla for batteries due to how far behind they were. They later on moved to another supplier because they were afraid of propping up a competitor but due to that Daimler's EVs have worse range than before.

    Right now, Tesla Semis are out delivering batteries from Nevada to Fermont, you know REAL LIFE testing.

    And as for hydrogen, lol. You do realize that the one that has power density issues is hydrogen right? That is why most hydrogen cars and trucks use lithium ion batteries for power. I'm guessing the issue you are having is that you don't know the difference between power and energy.

    But even if you ignore that misunderstanding between the two. Hydrogen infrastructure is FAR more susceptible to natural disasters then EV charge stations powered by batteries and solar. The last thing you want to do is be anywhere near a hydrogen station after a natural disaster. Though that station probably won't even turn on without electricity to begin with. And god forbid the hydrogen pump is not properly pressurized, you'll end up with a fraction of your range and no way to increase it until you empty it out.

    But end of the day, it is all about COST and electricity is FAR cheaper than hydrogen which is even more expensive than diesel or gas.

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