Can ZEV production, infrastructure scale in time for GHG3?

As we previously covered, the Environmental Protection Agency has finalized standards for the Environmental Protection Agency’s final rule for Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles-Phase 3, and trucking leaders have expressed serious concerns with how much this will cost the industry. One projection has 6% of longhaul truck sales needing to be zero-emissions by 2030, and then 25% two years later.

Battery-electric vehicle charging alone is expected to cost fleets and utilities nearly $1 trillion. And according to Taki Darakos, VP of vehicle maintenance and fleet service at Pitt Ohio, who addressed Congress April 30, heavy-duty BEVs can cost more than three times as much as a diesel truck, and fuel cell electric vehicles up to seven times more.

Darakos also pointed out that the industry's workload as it attempts to shift to new truck and charging technology will coincide with increasing freight demands, citing the American Trucking Associations’ 2020 freight forecast that predicts “over the next decade, trucks will be tasked with moving 2.4 billion more tons of freight than they do today.” In 2023, ATA said truck tonnage was at 11.3 billion tons.

The EPA theorized to meet emissions goals, zero-emission vehicles would have to account for 40% of a truck manufacturer’s day cab sales and 25% of its sleeper cabs in 2032. There are other avenues OEMs can meet these goals with (using a mix of CNG, hybrid, and renewable diesel technology) but ZEVs seem the likely way forward.

The question is, what will the industry have to do to get even close to the projected output needed in less than eight years?

“Ballpark estimates show about 0.1 % of today’s trucks on the road are electric, so it’s a long way to go in a relatively short amount of time,” offered Todd Spencer, President of OOIDA.

ZEV volume projections

According to Calstart, the exact percentage is 1.4% zero-emission trucks as of June 2023, or 17,734 out of 12,775,019 total commercial trucks in the U.S. Specifically, ZEVs comprised 0.02% of the heavy-duty market, or 867 out of 5,104,926.

It should be noted that 270,000 Class 8 trucks were sold in the U.S. last year, which FTR CEO Jon Starks called “a strong year.” He said that typically, the trucks are 60% sleeper and 40% day cab.

Using the EPA’s 25% ZEV scenario and assuming a ‘weak year’ of 200,000 Class 8 trucks, 60% would be 120,000 Class 8 sleepers. A quarter of that would be 30,000 long-haul ZEVs.

Could OEMs reach that scale to meet heavy-duty demand in less than eight years? If split among the seven OEMs likely to bear the lion’s share of ZEV production —Freightliner, Kenworth, Mack, Navistar, Nikola, Peterbilt, Tesla, and Volvo— they would each be on the hook for about 4,200 OTR trucks in 2032. That's NOT counting day cab ZEVs, and hevy-duty ICE trucks, either. 

Nikola, which was the first to deploy FCEVs, claims to have a capacity of 2,400 trucks per year, which includes the Nikola Tre FCEV and Tre BEVs as well. Other contributors may include Bollinger, Hino, Hyundai, Hyzon, and Lion, to name a few. 

With the amount of lead time given, it appears possible from a production standpoint (if you pretend anyone can predict what will happen next year let alone six or seven). Let's just assume the manufacturing math may check out. It should be concerning that the science, as of yet, does not. No ZEV can compare to a diesel truck’s range of over 1,000 miles between fueling. Current standouts, the hydrogen-powered Nikola FCEV and electric Tesla Semi, can get around 400 to 500 miles before stopping to refuel/recharge. Productivity would take a massive hit as trucks would have to make more frequent stops to charge. ZEVs also carry less freight due to the weight of the batteries.

To haul the same amount, fleets will need additional trucks and more charging stations (the other huge logistical hurdle).

“Additionally, while diesel fueling stations can handle four to five trucks per hour, charging stations would only accommodate two to three trucks per day,” Darakos said to Congress. “Each truck parking spot (excluding fueling) would need a charging station, exacerbating the shortage of truck parking capacity.”

To mitigate these factors, serious ground must be made in battery capacity and overall efficiency.

“All of our OEMs and engine manufacturers—they're working diligently—but you run up against the thing called physics,” noted Murray Mullen, chair and senior executive officer, and president of Mullen Group, Canadian logistics provider, at Truckload 2024 meeting in March. “And it's not that easy. If it was easy, we’d do it. And if it was cheaper, we'd have done it already.”

But it is hard and it is expensive.

“I haven't seen the magic [bullet] yet that reduces my cost,” Mullen added. “Every new one we're looking at is expensive, and the best of the purest zero emission [truck] is so expensive, it's not profitable. We need a lot of physicists and technology experts that crack the code."

The EPA clearly has faith that the code can be cracked in the next few years. Remember, launching a brand new heavy-duty truck technology can't just be dreamed up and rolled off the line in a few months. It takes many years, and 2030, when ZEVs need to comprise 6% of sleeper sales to hit emissions targets, isn't that far off.

So far, people have ideas how this could be achieved, but ideas don't move 13 billion+ tons of freight per year.

“How do we get there and do it in a practical way?” Mullen asked. “I don't have that answer right now. I haven't met too many people that have that answer. I've met lots of people who tell me what I should do, but they don't have that solution to how we get there.”

One thing that can help, Darakos said, was eliminating the federal excise tax for trucks.

“The current 12% tax is the highest excise tax on any good and reduces our ability to invest in cleaner, safer equipment,” he said to Congress. “This tax adds roughly $25,000 to the cost of a new clean-diesel tractor and can add $40,000 to $50,000 to the cost of a battery-electric or alternative fuel truck. This limits me every year when I am forced to buy twenty or twenty-one trucks instead of twenty-five newer, cleaner tractors.”

A bill called the Modern, Clean and Safe Trucks Act (H.R. 1440) was introduced in March 2023 to repeal the FET on heavy trucks and trailers. No action has been taken since being referred to the House Committee on Ways and Means the day it was introduced.

Infrastructure challenges

That’s on the vehicle side. The infrastructure side is the real challenge.

“Upfront costs are just one of the concerns we’ve heard about from our members,” OOIDA’s Spencer said. “Lack of charging infrastructure, charging time (up to 10 hours), range limitations, along with various operational challenges associated with EV batteries in cold weather are just a handful of the issues that must be addressed."

Even for one of the largest for-hire carriers ahead of the curve, Schneider National, wide-scale adoption seems much further off than in 2023. In Southern California, Green Bay-based Schneider has passed 2 million miles with its BEV fleet, which includes roughly 100 Freightliner eCascadia BEVs. They are at the bleeding edge of BEV adoption and still have reservations.

“The economic case doesn't play unless you get grants and subsidies,” explained Mark Rourke, President and CEO of Schneider, who appeared on a panel at Truckload 2024 with Mullen. “And that's the easy part. The hard part is the distribution of power.”

He compared the power demands of the El Monte, California site to those of the 5,000 homes in a small city south of Green Bay called Kaukana.

“The distribution of power is the most difficult,” Rourke said. “That was about a three-year planning process in and of itself.”

And all that is made more difficult when the trucks haven’t proven the adequate range needed to move freight effectively.

“You’ve got to change everything about your operation when you're talking 220 miles of range before you’ve got to repower,” he said.

Darakos noted: “It has been an incredibly long process to add 3 megawatts of power at our Harrisburg, Pennsylvania, facility.”

He described the laborious process “involved many calls, e-mails, and follow-ups with the utility, along with engineering and construction firms that many smaller organizations may not have access to or wonder where to even start.”

This project is expected to finish in 2025 but would have taken three extra years if more power was demanded. Pitt Ohio has 12 other sites to do this process at, and Darkos said they will have to work with 10 different utility providers. Trying to discern what incentives are available in each state and fill out the forms “is incredibly complex for fleets and not simple or easy.”

Hope for hydrogen?

Some believe FCEVs may have the edge in the over-the-road sector. Diesel molecules are quite effective at storing energy, though not as good as hydrogen’s potential. Diesel’s energy density of 45.5 megajoules per kilogram (MJ/kg) is 38% the capacity of hydrogen (120 MJ/kg), according to the Rocky Mountain Institute.

“As fleets are required to move to cleaner alternatives, hydrogen serves as an excellent zero-emission ‘one-for-one’ replacement for diesel,” noted Katrina M. Fritz, executive director of the California Hydrogen Business Council. “Fuel cell electric vehicles (FCEVs) that are powered with hydrogen enjoy long range, limited maintenance, and short refueling time. This makes FCEVs ideal for duty cycles of commercial trucking fleets.”

But processing hydrogen that could be turned into usable fuel is very costly and energy-intensive, so hydrogen suppliers have to figure out how to bring costs down. The Department of Energy’s Hydrogen Shot project seeks to bring the cost of green hydrogen, which is processed with renewable energy, down to $1/kg. The DOE projects technological advancement could get the cost down to $1.30 from up to $7/kg.

That’s just to process it. The price at the pump is three times that. Plus, that’s if you can find a hydrogen fueling station that that can accommodate heavy-duty trucks, and there are only a few scattered throughout California. Nikola’s Hyla brand has a station in Ontario, California, and FirstElement Fuel has one in Irvine. FirstElement also has one in the Oakland area that fills up Hyundai XCIENT Fuel Cell pilot trucks (and allows operator of the first Nikola Tre FCEV off the line, William Hall, to use the station as well, Hall said.)

That might not seem like a lot, but it’s almost as many as the number of public EV chargers built through the Infrastructure Law. The Biden Administration boasted that through $7.5 billion in funding, 500,000 public EV chargers would be built by 2030. According to the administration, $5 billion will go to a building a newtork of high-speed chargers that will be the "backbone" of the nation's electric future. So far, nary a vertabrae of this backbone have been installed. It’s 2024 and a scant seven have been built, as reported by The Washington Post.

Only 499,993 to go.

If that alone doesn't answer the question on if the country can scale ZEV trucks and infrastructure by 2032, we don't know what will.