Many in the industry remain devoted to improving output of quality returns found in diesel.
The Class 8 heavy-duty truck and fleet industry prolonged its dialogue throughout 2018
regarding the prospects of electrification of vehicles and where they stack up against diesel
counterparts. While electrification has potential to grow into a possible reality down the road,
many in the industry in the foreseeable future remain devoted to improving output of quality
returns found in diesel.
There are copious reasons why electric trucks may continue to take a back seat when private
transportation fleets and for-hire carriers are developing their truck procurement strategies.
Items ranging from fuel economy, cost of investment, range and charging station organization
are at the top of the list of trepidations for fleet managers.
In terms of electric or hydrogen fuel-cell trucks, only 4 percent of respondents said they are currently
procuring these types of trucks, and 53 percent said they neither see the value nor will they consider
the technology for at least another 10 years. Nearly a quarter of respondents (21 percent) also said
they believe electric or hydrogen fuel-cell trucks will never be widely used for over-the-road
operations. As for their reasons, 39.4 percent said they will not consider the technology because of
limited fueling or charging station infrastructure, and 33.3 percent have concerns over the vehicle’s
range or distance.
This was echoed recently in a report on Trucks.com by Roger Nielsen, chief executive of
Daimler Trucks North America: “Electric trucks have the potential to shift how goods are
shipped regionally but are far from ready for over-the-highway use because current batteries do
not hold enough energy.” He further went on to say that those in charge of procuring trucks are
still unsure of alternative fuel technology since they do not know if the driving results will be as
predictable as diesel, and the fear of the unknown is holding many back.
In fact, in a recent industry benchmark survey, fuel economy ranked second (36.7 percent) as a top
motivator overall for truck replacement. This is especially important since 86 percent said they’ve
experienced a consistent increase in fuel economy in model years 2013 through 2018. This
perspective is further underscored by the fact that the recent price of diesel has increased
above what industry forecasts projected. According to the latest North American Council for
Freight Efficiency (NACFE) and its 2018 Annual Fleet Fuel Study, diesel recently increased to
$3.28 per gallon, surpassing its projection of reaching just $2.72 in 2018.
Advocates of electrification point to the technology’s environmental benefits. However, many
don’t fully realize the substantial gains diesel has made in these areas as well. Private fleets
and for-hire organizations realize these benefits when they upgrade to the latest truck
equipment available. An analysis of Class 8 truck utilization from Fleet Advantage saw that
these companies can realize a first-year savings of $26,687 when upgrading from a 2012
sleeper model-year truck to a 2019 model, based on diesel prices at $3.29. This represents a 15.5 percent increase in savings
compared with a similar analysis a year ago upgrading to a 2018 model when diesel prices
registered $2.57.
In addition to realizing considerably better cost savings from fuel economy gains, fleets will also
achieve an estimated 18 percent reduction in CO2 emissions and 46 percent reduction in NOx output when
upgrading from a 2012 model year sleeper to a new 2019 unit.
The industry will continue to evaluate electrification as a possible asset for the transport of
goods in support of the economy — and they should take a hard look. However, the data
continues to support diesel as the primary option for transportation, as newer truck technology
makes great strides in improving fuel economy and lowering emissions. Coupled with life cycle
asset management strategies that leverage flexible lease models that help reduce the total cost
of ownership and help upgrade into newer technology every three to four years, diesel will
remain the most economically viable option for the foreseeable future.
Brian Holland is president and chief financial officer at Fleet Advantage, an innovator in truck fleet business analytics, equipment financing and life cycle cost
management. For more information, visit www.FleetAdvantage.com.