Leave diesel in the dust: Future-proofing operations with intelligent electric trucks
Leave diesel in the dust: Future-proofing operations with intelligent electric trucks
In addition to the emissions-savings benefits they offer, electric trucks can be far more cost-effective than diesel trucks in the long run. Unlocking the potential of electric fleets ultimately comes down to harnessing the right mix of digital intelligence. Additionally, acting sooner rather than later will enable shippers to maximize their savings.
The European Federation for Transport and Environment predicts that from as early as 2025, electric trucks will outperform diesel trucks in most use cases in terms of total cost of ownership (TCO) – and, by 2035, all new electric freight trucks in Europe will be cheaper to run, will drive just as far, and will be able to carry as much cargo as diesel trucks.
This also applies to the US, where the recently launched U.S. National Blueprint for Transportation Decarbonization will fuel the electric transition to reach net-zero carbon emissions from the transportation sector. The Department of Energy predicts that by 2030, nearly half of the electric trucks in the US will be cheaper to buy, operate, and maintain than diesel trucks.
Some may find such claims to be surprising, given that electric trucks currently bear a higher initial price tag than diesel trucks. But ultimately, the lower “overall” cost of electric freight reflects the fact that there are far more factors at play beyond the purchasing price of the vehicle. And companies that jump on the shift earlier – and adapt their processes sooner – are likely to benefit even more.
Total cost of ownership: a key decision-making factor
TCO is a more realistic metric to understand the real switching cost to electric for decision-makers. This is because TCO takes into account all truck-related costs over a vehicle's lifetime. And when comparing the TCO of electric trucks versus that of diesel trucks, it is the electric trucks that prove mightier – achieving a lower TCO over time compared to diesel trucks.
The longer and further the truck drives, the more cost-competitive it becomes compared to a diesel truck.
The reason behind this is the sum of operating costs. As trucks are heavily used assets – often running for more than one million kilometers over their lifetime – operating costs, such as energy and maintenance, increase significantly over time as the vehicle’s mileage increases. Electric trucks have lower operating costs for energy, maintenance, and tolls. So the longer and further the truck drives, the more cost-competitive it becomes compared to a diesel truck.
The right battery can optimize TCO
Getting the lowest TCO from an electric truck requires choosing the right battery for the vehicle’s intended use. A battery that’s too large will be more expensive, and it will also be heavier, which can adversely impact the truck’s payload capabilities. On the other hand, a battery that’s too small will require repeated use of fast charging facilities, which is expensive and reduces the lifetime of the battery pack. An optimal battery setup will enable a higher battery utilization and a lower battery cost per kWh – which will, in turn, lower the TCO.
Whether it’s for overnight depot charging or for destination charging, companies generally need to invest in their own charging equipment. The utilization of the charging equipment will also impact the TCO, and – in turn – determine the overall ROI of the company’s electric fleet.
To reach the most cost-effective electric freight system, optimal battery and charger utilization is essential. A smarter way to plan and optimize the usage and charging of a truck battery – ideally one that is based on data – will increase the lifetime of a truck. Additionally, it will allow electric trucks to operate during the same time period – covering the same driving range, per day, as diesel trucks – resulting in no additional time losses.
Why the electric transition is ramping up
The favorable TCO of electric trucks, when compared to diesel, is one of the factors driving the electric transition. Additional factors include regulations and infrastructure. Many regulations to foster the electric transition have been enacted, and they play a critical role in speeding up the shift to more sustainable freight. One example of such a regulation is the truck road toll that will be applied in the EU by April 2023, in which trucks with no tailpipe emissions will benefit from less than half-price toll fees – or up to €25,000 in annual savings per truck.
To further cater to the accelerated electric transition and to secure electric freight at scale, a dense and fast charging network is key; it will significantly improve the economic competitiveness of electric trucks. The European Commission is well aware of this, and has thus proposed mandatory targets for charging stations every 60 km across Europe’s main road network by 2025. Additionally, the private sector – including Einride – is rolling out public charging infrastructure across the continent.
The same trend can be found in the US where the Biden-Harris Administration has announced the next steps toward building a national network of charging, including a launch of a $700 million charging grant program for states. Such public investments serve as a catalyst for private charging investments, and it is this combination of both that will enable electric freight to take off at scale sooner. In 2023, Einride will begin construction of its first charging station for electric heavy-duty trucks in the US – one that will service the ports of Los Angeles and Long Beach.
The need for change
Shifting to transport operations based on electric vehicles represents a significant opportunity for shippers to contribute to a greatly needed change. Heavy-duty trucks only account for 2% of the vehicles in Europe, while being responsible for 26% of the greenhouse gas emissions coming from European road transport. And in the US, medium- and heavy-duty trucks represent about 4% of vehicles yet make up nearly 30% of highway carbon emissions.
At the same time, road transport is not going away. The European Commission expects transportation with heavy-duty trucks in the EU to increase by 44% until 2050. It’s unsurprising that policymakers are taking action. The current EU regulation mandates truck manufacturers to reduce their new fleet emissions by at least 30% by 2030.
Many companies around the world are also setting ambitious net-zero targets – especially for 2030. Transforming shipping operations will, in many cases, be critical for realizing these targets.
Future-proofing operations with electric trucks
The bottom line is, by 2035, all new trucks across all European markets can be vehicles with no direct emissions. The European Federation for Transport and Environment predicts that all zero-direct-emissions vehicles will become cheaper to own and operate by 2035, while fulfilling the same operational requirements as their diesel counterparts; this includes range and payload capabilities, and it considers any time losses incurred due to charging. Given the current market development, Transport and Environment concludes that all long-haul trips in Europe can be electrified from the mid-2020s.
Similarly, a global study by PwC found that electric trucks will outperform diesel trucks on TCO from 2025 onwards in most use cases – and that they will reach a cost advantage of 26-34% in 2030. PwC thus sees a clear case for electric trucks outperforming diesel trucks on cost in the near future, despite energy prices being hard to predict.
Before long, all new sales of electric trucks will have a lower TCO compared to diesel, while delivering the same capabilities in terms of range, payload and driving times. Such conclusions have been made in many regions, including the US. According to the US Department of Energy, by 2030, nearly half of the electric trucks will be cheaper to buy, operate, and maintain than diesel trucks. And by 2035, electric heavy-duty trucks will cost the same as – or less than – diesel trucks.
Operating electric fleets is complex
Although electric trucks will go the distance while being cheaper and more resilient, the switch to electric is not as simple as swapping a diesel truck for an electric truck. It will never be a one-to-one replacement. Transitioning to fully electric takes time – with those acting earlier standing to benefit more – and it requires specific knowledge.
Electric transportation is far more complex than fossil-fuel transportation, encompassing several additional parameters such as vehicle routing, weather conditions, lifetime maximizations, and energy usage – to name just a few.
To help shippers electrify without having to navigate these complexities, Einride has created the most cost-competitive, long-term solution for electric freight. It is provided as a “turnkey” service and requires no costly overhead investments from the customers. Einride’s clients are able to benefit from fully electric shipments without having to purchase any electric vehicles themselves.
Einride focuses on identifying the best use cases that can achieve TCO parity today.
As for having the required knowledge, Einride operates one of the largest electric fleets in the world and focuses on identifying the best use cases that can achieve TCO parity today. Electrifying a fleet together with Einride will not only be more cost-effective for the shipper customer but is also faster to implement and will curb more emissions compared to driving the electrification on their own.
Transformation requires digital intelligence
Operating an electric fleet requires an automated and data-driven solution that coordinates all parts of the transport ecosystem, including where electric vehicles are deployed and when; where to install charging infrastructure; which routes the vehicles will take at any given time; how drivers receive their instructions; at which points along the route to charge; how to optimize battery usage; the maintenance of vehicles; and much more. All of these tasks are either automated or made effortless through Einride’s freight mobility platform Einride Saga. As the digital brain behind the entire shipping operation, it enables efficient and optimized electric and autonomous freight through various applications, algorithms and models built on centralized data.
Accelerate the shift to electric with Einride
Transitioning to electric shipping in the most sustainable and cost-efficient way requires an accurate and actionable assessment of electrification opportunities. Prerequisites for a successful electric rollout include: knowing where there is electrification potential within the network, deciding where to install electric capacity and where to deploy trucks; and knowing how to expand or scale the fleet(s), in line with the emissions-savings goal and cost-savings goals.
Through its intelligent freight mobility platform, Einride can provide businesses with a tailored, end-to-end assessment of how to electrify operations for minimized cost and maximized environmental benefit. This enables shippers to start adapting their processes and ways of working sooner rather than later. After all, shippers who can secure network capacity or have charging infrastructure provisioned for earlier are likely to benefit from greater cost savings over time.
By shipping with Einride, you can carve out a resilient and impactful plan for transformation. Get in touch if you would like Einride to perform a tailored assessment of your electrification opportunities, or if you would like to learn more about Einride’s digital, electric and autonomous solutions for freight mobility.