Today a new article from Reuters lays out the numbers behind why emission free trucking remains a fallacy: emissions-free trucks need to drop in price by up to 50% to compete with diesel models, according to a McKinsey study.
Currently, less than 2% of the EU’s heavy freight vehicles are electric or hydrogen-powered, but this must rise to 40% of new sales by 2030 to meet EU climate goals. Electric trucks cost 2.5-3 times more to produce than diesel ones, and logistics companies are reluctant to bear the higher costs, making this target challenging, the report says.
McKinsey suggests electric truck prices should be no more than 30% higher than diesel models, requiring major battery advancements.
Reuters writes that a 25% reduction in charging costs and 900,000 private charging points by 2035, needing a $20 billion investment, are also key to the EU’s CO2 strategy. Additionally, European truckmakers face competition from Chinese manufacturers, who have captured 20% of the bus market with cheaper products.
A co-author of the McKinsey study said: “I don’t think it’s impossible that this could actually happen in electric trucks over time.”
Recall we wrote earlier this year that demand for electric semis was plunging.
“The economics just don’t work for most companies,” Robert Sanchez, the chief executive of Ryder, said in May.
Ryder’s experience highlights the difficulties state and federal governments encounter in encouraging truckers to transition from polluting diesel rigs to zero-emissions vehicles, the report says.
It also indicates that significant improvements in battery weight, range, and charging times are necessary for battery-electric trucks to effectively compete with diesel rigs in the cost-sensitive freight industry.
Rakesh Aneja, head of eMobility at Daimler Truck North America, told Wall Street Journal: “Quite frankly, demand has not been as strong as what we would like.”
]]>Now a legal fight has opened in a new front against the Biden administration’s advocacy for that very discrimination.
The Wisconsin Institute for Law & Liberty says it has filed a federal lawsuit against Biden’s “disadvantaged business enterprise” scheme. The case charges that allows illegal discrimination against two clients – Mid-America Milling Company LLC and Bagshaw Trucking Inc.
The legal team said the federal program is “the largest, and perhaps oldest, affirmative action program in U.S. history,” and it’s run by the U.S. Department of Transportation.
Dan Lennington, WILL deputy counsel, said, “It’s time for discrimination to end. Our clients are hardworking small business owners who just want to build roads and make America a great place for everyone. But time and time again, they lose out on business because of their race and gender. This is un-American, and we’re putting a stop to it.”:
It was just last summer that the United States Supreme Court ruled that affirmative action is almost always illegal. Through its Equality Under the Law Project, WILL seeks to extend the foundational right of equality to all corners of civil society.
James Hughes, board chairman for MAMCO, said, “All we are asking for is equal treatment under the law. The government treats our company differently because of race and gender. We’re asking the Biden administration to dismantle this discriminatory program and embrace the right of equality for all.”
The legal team explained the federal program is “an affirmative action program that gives preference to certain companies based on race and gender. Through this program, the federal government finances the American transportation system, including highway construction, with a series of race and gender quotas they call ‘goals.’”
Practically those “goals” are “discriminatory barriers,” preventing many construction companies, like WILL’s plaintiffs, from competing for contracts on an equal footing with firms owned by women and certain racial minorities.
That, the case charges, violates the Constitution’s promise of equal treatment.
The program was continued just months ago when Joe Biden signed the Infrastructure Investment and Jobs Act, which demands that more than $37 billion in work be given to “small business concerns owned and controlled by socially and economically disadvantaged individuals.”
MAMCO is a milling company headquartered in Jeffersonville, Indiana, and part of Hughes Group, Inc., which is a premier heavy highway and bridge preservation company. Founded over 80 years ago, four generations of the Hughes family have guided and expanded the company into a market that stretches over 30 states in any given year, WILL reported.
Bagshaw Trucking Inc. is a hauling company headquartered in Memphis, Indiana. Founded in 1982 with two dump trucks and two employees, Bagshaw now boasts one of the largest truck fleets in northern Kentucky and southern Indiana. Bagshaw works on all types of projects, including major interstate construction and restoration, airport projects, bridge repairs, industrial parks, and subdivision developments, it said.
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]]>Under the new mandate, which goes into effect on January 1, 2024, all new trucks that are bought for servicing distribution centers, ports and rail yards must be zero-emission models.
One of the main concerns is the low availability of electric semi-trucks. Those that are available have very high prices, and many in the industry are concerned about the short distances they are capable of traveling on a charge. Trucks need to use dedicated charging stations, and the limited infrastructure in the areas surrounding ports will make keeping these vehicles charged complicated. The need to recharge these trucks frequently, combined with potentially long wait times as multiple trucks vie for limited charging ports, will make operation costs and times rise.
The high costs of replacement parts and maintenance services are only expected to add to logistics companies’ financial woes. For many, these costs are largely unknown at the moment, which means companies are struggling to make their plans and calculate their costs. Currently, maintenance is one of the biggest expenses for diesel trucks, and companies simply don’t know what the maintenance costs on the newer trucks will be. However, some have estimated the costs for electric truck maintenance could be tenfold the costs of maintaining diesel trucks.
The owner of California-based Sibrian Trucking, Nelson Sibrian, told The Epoch Times: “Nobody has real numbers when we ask for details about maintenance and replacement costs,” “With diesel, we know our cost per day to maintain the vehicle.”
The costs of these vehicles are another concern, with the current price for electric semi-trucks coming in at around $500,000. While fleet owners can choose from a range of different manufacturers when purchasing traditional trucks, allowing them to shop around for better deals, their electric counterparts are much harder to find and are often backordered. This means that even those who are in a financial position to purchase the vehicles may not be able to do so due to a lack of availability.
The supply problem is only expected to get worse when the mandate is in full effect. Around 10,000 drayage trucks for ports and rail yards are replaced every year, on average, so the demand is expected to be very high and vehicle makers may not be able to keep up.
Oakland trucking professional John Williams said: “This is a bigger problem than people realize because we’re being forced to do something that is literally impossible. There are not enough trucks, not enough charging stations, and not enough information that we can rely on.”
Another factor that could harm profitability is weight limits. For example, Tesla trucks have an estimated 10,000-pound battery in them. This means that the trucks will be forced to carry less cargo in order to remain compliant with weight limit regulations. Packing trucks is considered one of the best ways to boost profits, and heavy vehicles will effectively put an end to this practice.
Some truckers have also expressed concerns about the size of the lithium batteries in these trucks. If fires occur, it could pose a major public safety issue.
Another roadblock is the limited range of electric trucks. Diesel trucks can travel 1,000 miles before they need to be refueled, but the top electric semi-trucks on the market can only go as far as 300 miles before needing a charge; most, however, can only make it around 100 miles.
Although these new regulations will cost trucking companies a lot of money – costs that will ultimately be passed to consumers – Governor Gavin Newsom issued a press release applauding the Biden administration’s approval of the mandate.
He stated: “Now, thanks to the Biden administration, we’re getting more zero-emission heavy duty trucks on the roads, expanding our world-leading efforts to cut air pollution and protect public health.”
Sources for this article include:
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