Electrification of Heavy Duty Truck

While the electrification of EV sector is important, it would seem to me that we also need to get serious about heavy trucking sector if we really want to make a dent in reducing emissions from transportation sector.

The Chinese market sells about 1 million heavy duty trucks (HDTs) per year. As you will see, we need probably 700 kWh battery packs (or more of the 500kWh pack + swapping) in order to give sufficient range to 49 ton HDTs. At least, it seems like all the electrification of heavy trucking sector has focused on 49 ton trucks.

Using simple math, you will see that we need 700 GWh of battery per year just to satisfy for the Chinese market demand. And that does not even account for all the high end fast chargers that are needed to give them the juice to charge that monstrous battery pack in an hour. On top of that, cost remains a huge barrier for BEV HDTs. At $50/kWh, a 700kWh battery pack would cost $35000 alone. A 49 ton diesel truck in China costs around $55000 as I wrote here.

Now, I have also argued here that the operating cost for BEV HDTs are much better than that of diesel ones. XCMG estimates that 10 years of operation would save 2 million RMB. After a couple of years, you can recuperate the purchase cost. However, that would also depend on the interest rate and things like that. Getting that up front capital might be hard for some prospective customers. Of course, customers are also likely concerned about not having the charging infrastructure, so more time is needed to have that all built up. Of course, it would also help if the government stepped in and give purchase subsidies to electric trucks for environmental reasons.

The recent month of September was one of the most interesting months for HDT energy transition. We had almost 8000 sales in BEV HDTs, which reached 18.14% share in market share for HDTs

Even aside from this, the CNG truck sales have been really high for the past year to 18 months. As diesel prices have dropped, CNG economics have also worsened. We are seeing that CNG and BEV totals stay relatively constant (about 40% of total HDT sales), but BEV has recently been gaining at CNG’s expense. You can see below for the major BEV HDT producers in China

We are up 143% for the year vs last year. Almost everyone is seeing huge jumps. Sany and XCMG are the market leaders, but there are some new players like Deepway and JAC who are doing well. We know that Deepway trucks are very attractive and they are building a factory that can produce 100000 HDTs a year. So over the next few years, they could become a large player here.

Another new entrant that is about to start delivering BEV HDTs is WindRose. As I said here, WindRose has the most impressive pure electric HDT I have ever seen. It can carry the 49 ton over 670 km range. It has even hit as high as 1000 km range with not full load. According to this article, it will start production in November for delivery in probably December. It wants to start deliveries in America and Europe in 2025. According to this article, it already had 6000 orders by September.

Another new player that started making noise earlier this year is ZeroPoint. They are a little further away from delivering on vehicles, but are also designing 49 ton HDTs with much smaller battery pack (385 or 450 kWh) that can charge relatively quickly. There are certainly different customers looking for longer and shorter ranged HDTs. If you buy a longer ranged one, you would need to buy one with a larger battery pack. You can also invest in battery swapping capacity to deal with range.

So, there are plenty of compelling options coming online. I have a chart below showing Tesla Semi compared to various Chinese players in the market.

As you can see, Tesla Semi does have the best efficiency, but that is based on a smaller truck. All the Chinese options are showing from 1.2 to 1.37kWh/km in power efficiency. There are a whole host of options. Now, ZeroPoint founder thinks that NEV penetration in HDTs could reach 80 to 90% in 3 to 5 years. That would be a huge game changing number.

All of this can be achieved by these attractive BEV options continuing to increase their production over the next couple of years. Ever cheaper and safer battery pack designs and better charging infrastructure will also help make NEV adoption more attractive. Again, this is one place where government subsidies would make enormous difference to crude demand and decarbonization.

I look forward to how this will look in another year, but it’s possible that we could see 20000 deliveries a month if we continue at this growth trajectory. The ever cheaper battery packs and higher charging speed have made a huge difference in the desirability of BEV trucks. That is a trend that will likely continue.