The 12% federal excise tax (FET) on new heavy-duty trucks has lots of detractors who think the 103-year-old levy has long outlived its original purpose. That was to defray the costs of America fighting in World War I.
Brett Pope may or may not be for getting rid of the tax. He won’t say. But the director of electric vehicles at Volvo Trucks North America thinks waiving the tax on purchases of the VNR Electric regional hauler would help bring it closer to price parity with diesel models of the truck. Volvo is taking orders and will begin regular production of the VNR Electric in 2021 in Virginia.
Lessons on affordability, sufficient public charging and other issues addressed in the ongoing Volvo LIGHTS (Low Impact Green Heavy Transport Solutions) program are still being learned. Pope discussed the state of battery-powered electric trucking in a FreightWaves Q&A. Here is a transcript of the conversation edited for length and clarity.
What is your assessment of the Volvo LIGHTS program?
I would say with the partnerships we’ve developed, we’ve clearly learned we need close collaboration. It takes a little more time than we anticipated in general. And of course we ran into everything this year. You had COVID come along, the restrictions in California, wildfires. We’ve had a bit of everything. Probably the biggest lesson is the charging infrastructure can be complex. You need to start early. The more preparation you can do, the easier it will go.
How much are you counting on the Biden Administration to help push electric trucks?
If you look at what’s happening in the industry now, most of the incentives and programs are at the state and local levels. So I would expect certain states that are driving it for their sustainability reasons, and in EPA attainment areas such as California, they’ll continue as much as they can to drive it from a regulatory standpoint. We certainly support a federal program to help transition to zero-emission products.
How long will incentives be needed to sell electric trucks?
I think there will be a tipping point. If you look at California where they have the LCFS (Low Carbon Fuel Standard) program, that allows some opportunities to help offset some of that cost. Certain regions may reach a tipping point faster on certain applications and duty cycles. But until the industry is able to get past the TCO (total cost of ownership) picture, you’re not going to get widespread adoption.
What plans does Volvo have to help grow public charging?
I think you’ll see over the next couple of years that we’ll actively seek to participate in programs and partnerships that will help to establish more public charging. We worked together with our dealerships to make sure they can provide the necessary charging and uptime and support of the product. That’s the approach we’ll take when we go to the market, so we cover it from the factory end to the dealership.
How do you see fuel cells becoming part of Volvo’s electrification strategy?
We know one solution doesn’t fit everybody. Certainly, within electrification, hydrogen is there. The good news is, we’ve created the electric driveline. A hydrogen fuel cell could be used to create electricity. It would be easier to add that as a range extender to build up the longer-distance route.
Where do hybrids like Hyliion’s approach fit?
In general, more companies are focused on electromobility. That’s a good thing for everybody. From a Class 8 hybrid truck, we’ve gone straight to battery electric. That, to me, is the more favored position.
How does Volvo leverage customer desires for sustainability?
We’re seeing customers driving the industry with their goals for sustainability. Companies are moving towards the Paris Accord or the science-based type of sustainability goals. We’re able to push and be a little bit more aggressive in bringing this [VNR Electric] to market to try to help start addressing that. It’s a long journey to reach those types of targets.
Is Volvo looking at charging as a service or other all-in approaches with the VNR Electric?
We’re trying to be very agile with the customers. Solutions can include charging and charging infrastructure. Depending on what the customer’s needs are or where their starting point may be, we’re a bit agnostic with the charging supplier. We have relationships with multiple suppliers and we can work with if they have a preferred vendor or if they need a recommendation; that’s fine.
