Electric heavy-duty trucks are hitting the roads in California and beyond

Study after study indicates that electric trucks are hitting cost and range targets that put them in the running to handle a rising share of U.S. freight-moving needs — at least for freight that doesn’t need to be moved more than a few hundred miles per day.

Last week’s Advanced Clean Transportation Expo gave freight companies a chance to showcase how they’re testing these capabilities in the real world. Over the course of the four-day event in Long Beach, California, companies unveiled several big orders for all-electric Class 8 trucks, the heaviest of the heavy-duty trucks found on U.S. roads.

On Tuesday, nationwide logistics company NFI Industries announced that it had ordered 60 Volvo VNR Electric trucks, building on its commitment last year to add 20 VNRs and 80 Freightliner eCascadias to its logistics hub in Ontario, California. Quality Custom Distribution also ordered 30 VNRs, on top of 14 it had ordered last year; they’re destined for daily resupply routes from its distribution centers in La Puente and Fontana, California.

Along with the new electric truck orders came new commitments for the high-voltage fast-charging stations needed to keep them running. Quality Custom Distribution, a subsidiary of global food-service company Golden State Foods, announced a $20 million project at its La Puente site featuring 16 chargers and a solar-, battery- and generator-powered microgrid. Penske Truck Leasing and Shell Recharge Solutions North America — the EV-charging business of Shell acquisition Greenlots — unveiled plans to deploy Level 2 chargers at 33 sites, 23 of them in California.

And WattEV, a startup planning an ​“electric-truck-as-a-service” business centered on solar- and battery-powered charging hubs across Southern and Central California, announced plans for a charging plaza to be built in partnership with the Port of Long Beach, one of the country’s busiest freight hubs. The depot will feature 26 360-kilowatt charging bays to serve the 50 Volvo VNR electric trucks that WattEV received in March. The charging bays will also be available to serve electric trucks from other fleets as part of the port’s push to reach a zero-emissions fleet by 2030.

These commitments represent a fraction of the fossil-fueled trucks in the fleets they’re augmenting, to be sure. About 20,000 trucks are registered to operate out of the ports of Long Beach and Los Angeles, for example. Quality Custom Distribution operates a fleet of 700 Class 8 trucks running more than 36 million miles of deliveries across the U.S. on an annual basis.

Still, compared to last year’s ACT Expo, the announcements at this year’s event ​“seem to be moving from testing phases toward planning multiyear rollouts,” Jeffrey Osborne, managing director and senior research analyst at investment bank Cowen, said in a research note.

One fleet operator’s experience with going electric 

That’s certainly the case for Quality Custom Distribution, which has been road-testing its first Volvo VNR Electric for the past year. ​“You definitely want to walk before you run in this new journey,” Shane Blanchette, QCD’s senior director of operations, said in an interview. Testing that truck has ​“given us the comfort to take the next steps” to expand the company’s electric fleet.

Today’s electric heavy trucks still lack the range for routes longer than a few hundred miles. WattEV’s Pony Express–like model is one way to push these range limitations. It will allow a driver and their cargo to move from a truck with a depleted battery to another truck that’s been charging for hours.

But QCD won’t need that option. Its last-stage deliveries for Starbucks, Chick-fil-A and Chipotle restaurants happen to fit the roughly 150-mile ranges available from the first-generation Volvo VNR Electrics, at least in its Southern California locations, Blanchette said. QCD’s trucks only make deliveries at night, giving them all day to recharge, he added.

“You can draw a 100-mile radius circle” around the company’s La Puente site, the future home of 30 of its electric trucks, ​“and hit a majority of our customers,” he said. QCD’s site in Fontana has a slightly more dispersed set of customers, but a sufficient number are within close enough range to be served by its starter electric fleet of 15 trucks.

Both sites are eligible for lucrative grants and incentives from California state programs, as well as from the South Coast Air Quality Management District, which oversees emissions across much of the greater Los Angeles region. ​“Without some of the grant opportunities, this would be very challenging,” Blanchette said, given that electric trucks still cost about three times as much as their diesel-fueled counterparts.

At the same time, electric trucks promise significantly lower maintenance costs and downtimes compared to internal combustion engines, and significantly lower costs to fuel with electricity compared to diesel — a delta that’s widening with recent diesel price increases.

And while the supply-chain crunch that’s affecting the broader economy has also slowed QCD’s plans for getting its electric trucks on the road and high-voltage direct-current chargers installed, ​“so far the timing and strategy seem to be working,” Blanchette said. Grant-making agencies have been flexible with deadlines for putting their funds to use, and the relatively small-scale nature of QCD’s electric switch-over means slower-than-expected deployment hasn’t threatened its core business.

More predictable timelines for getting vehicles and installing chargers will be needed to enable the next steps in QCD’s electrification plans, he said. For a business that lives and dies on its fleet uptime and utilization, ​“obviously, if you have electric trucks that you can’t charge, that’s a lot of capital tied up that’s not giving you a return,” he said.

Assessing the opportunity for short-haul electric trucking 

Other fleet operators are running up against similar uncertainties as they take their first steps with electric heavy-duty trucks, said Mike Roeth, executive director of the North American Council for Freight Efficiency (NACFE).

“We’re clearly in this journey now; there’s no question about it,” Roeth said in an interview from the ACT Expo floor. ​“But there are a lot of unknowns about how fast and in what markets.”

Last fall, NACFE partnered with nonprofit research group RMI and a host of truck manufacturers and fleet operators to test whether a variety of electric truck models can reliably complete shorter-haul routes. (Canary Media is an independent affiliate of RMI.)

The results indicated that electric trucks can meet about half of North America’s current road freight-hauling needs, and making that switch can lead to significant reductions in carbon emissions and local air pollution. NACFE has followed up with reports on specific classes of vehicles, starting with medium-duty vans and panel trucks and short-haul port terminal tractors.

Its most recent report looks at heavy-duty electric tractor-trailers like those from Volvo, Peterbilt, BYD and Freightliner that NACFE tested last fall. But it avoided the tricky issue of how to electrify long-haul trucks and focused instead on ​“hub-and-spoke” operations, Roeth said — those that ​“go out, come back and get the driver home each night.”

Heavy-duty trucks serve quite a lot of these routes, he said. For example, beverage companies PepsiCo and Anheuser-Busch have ​“somewhere around 90 percent of their delivery trucks operat[ing] less than 100 miles” per day, he said.

Heavy-duty trucks are also responsible for about 70 percent of carbon emissions from the U.S. medium- and heavy-duty transportation sector, and an even greater share of air pollution that’s harmful to humans, according to federal data. About 22 percent of those emissions come from heavy-duty vehicles that drive less than 250 miles per day.

That makes these trucks an important emissions-reduction target, whether that’s via electrification, switching to lower-emissions fuels like natural gas or renewable diesel, or conversion to run on hydrogen fuel cells. Compared to previous ACT Expo events, however, Cowen’s Osborne noted ​“an increased interest in zero-emissions solutions” at last week’s show — which essentially means electric vehicles or hydrogen fuel-cell vehicles — ​“relative to the demand for lower-emission solutions such as propane, natural gas or biodiesel.”

Mandates, incentives and operational benefits 

Government mandates are playing a big role in the ongoing shift to electric vehicles. California’s Advanced Clean Trucks rule, passed in 2020, requires manufacturers to sell an increasing proportion of zero-emissions trucks in the state starting in 2024 on the way to 100 percent by 2045. Several other states and the District of Columbia have taken steps to institute their own version of this rule, representing roughly half the U.S. economy, as this map from a new report from clean transportation consulting firm and ACT Expo host Gladstein, Neandross & Associates indicates.

While these rules target truck manufacturers, other rules are targeting truck buyers. California is now working on an Advanced Clean Fleet rule, expected to be adopted in late 2022 or early 2023, that would require large fleet owners to steadily increase the proportion of zero-emissions trucks in their fleets to 100 percent between 2035 and 2042.

Even more aggressive mandates are targeting the pollution hot spots of the ports of Long Beach and Los Angeles, which are the source of heavy air pollution that affects about 300,000 people in surrounding communities, many of them lower-income areas and communities of color. The South Coast Air Quality Management District has ordered about 3,000 large warehouses in its jurisdiction to meet increasingly stringent pollution-reduction rules over the coming decade.

Along with mandates, incentives have played a vital role in easing the upfront costs of electric trucks, which, as mentioned, today cost about three times more than their fossil-fueled equivalents. The Gladstein, Neandross & Associates (GNA) report states that billions of dollars in public funds are being used to encourage the purchase of clean fuels and vehicles, with California again in a leading position.

For heavy-duty vehicles, California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, which funds a significant part of the cost of electric trucks, made nearly $430 million in funding available in its annual reopening in March. California’s Low-Carbon Fuel Standard program, which offers zero-emissions vehicle owners credits for emissions reductions that can be sold to entities looking to lower their carbon footprint, marked $4.7 billion in transactions last year, according to GNA.

Corporate sustainability and emissions-reduction goals from companies including Amazon, Coca-Cola, Home Depot, Nestle, PepsiCo, Sysco, Target, Verizon and Walmart are also playing an important part in pushing electric trucks onto roads, the report notes. GNA surveyed nearly 250 companies that operate ​“early-adopter fleets” and found that 57 percent have already tested or bought electric trucks and two-thirds of them plan to order them in the next year.

NACFE’s latest data on recent purchase orders shows that credits, grants and other incentives can help reduce the higher upfront costs of battery-electric heavy trucks to close to parity with diesel-fueled analogs. A new RMI report finds that half of heavy-duty trucks could be cost-effectively electrified today based on the incentive structures in California and New York, the two states with the country’s most aggressive electric-vehicle policies.

Looking past the upfront costs, the total cost of ownership (TCO) savings can start to flow almost immediately, with electric trucks cutting refueling costs nearly in half compared to diesel, according to NACFE data.

“The price of gas is helping TCO,” Andy Brown, product marketing manager for Volvo Trucks, said in a phone interview from the ACT Expo floor. ​“You can charge your battery at a fraction of what it would take to fuel your diesel truck.”

“The other benefit is service,” he said. Electric drivetrains have far fewer moving parts and don’t need motor oil to cool their electric engines. What’s more, ​“the good drivers of electric trucks will do what’s called one-pedal driving,” he said, taking advantage of a common feature of EVs that allows drivers to set vehicles to use their regenerative braking systems to slow down when they ease up on the acceleration pedal. Not only does that help recharge batteries, it also reduces wear and tear on brakes, another big maintenance cost.

Regenerative braking also helps extend ranges for shorter-haul routes in more urban environments, Brown noted. ​“It thrives on frequent stops because we can capture that energy back into the system.”

Meeting the needs of the market 

These kinds of factors could allow electric trucks for routes shorter than 250 miles to reach TCO parity with diesel-fueled trucks before the end of the decade without subsidies, according to a March report from the U.S. National Renewable Energy Laboratory.

Rapid improvements in cost and range being demonstrated by electric truck manufacturers play an important role in forecasts like these, NACFE’s Roeth said. ​“Manufacturers are bringing better trucks, better battery packs. The 200-mile range is where we are in 2022. But I hope that our report needs updating quickly.”

At the same time, fleet operators are still working on integrating electric trucks into the way they do business, he said. NACFE highlighted the key concerns for making this shift, which center on upfront cost, range, lengthy charging times, and fleet operators’ responsibility for installing and maintaining their own charging networks.

Also, noted Roeth, ​“To deliver on sustainability and zero emissions, fleet operations are going to have to be purpose-built. They have to dedicate these trucks to very specific parts of their business.” For example, electric heavy-duty trucks can’t be used for long-haul deliveries overnight and local deliveries during the day because that would leave them no time to charge up, which reduces the flexibility of their use.

Another big question is how to balance the pace of investment in a class of vehicles that are expected to get significantly better and cheaper relatively quickly. Freight companies tend to lease or own vehicles for about a decade, but ​“this technology is going to look very different in terms of range and capability 10 years from now,” QCD’s Blanchette said. Just in the past year, the maximum range available from a Volvo VNR Electric truck has grown from about 150 miles to about 230 miles, he noted.

Companies including Volvo are developing vehicle-as-a-service and infrastructure-as-a-service programs to consolidate and manage the costs of truck maintenance and charging installation to deal with these uncertainties. ​“We’re working hand in hand with Volvo on shorter lease terms and higher residual value” to plan ahead for how QCD can switch out future versions of trucks or batteries with those it’s leasing today, Blanchette said.

“We do have a stated goal of zero emissions,” he said. While the company hasn’t yet mapped out its strategy for getting there, ​“you’ve got to get those first steps on that path.”