OEM Panel Takes Deep Dive into Electric Truck Market

May 21, 2024

There’s no doubt that the commercial trucking industry is scaling electrification, with major OEMs readily developing zero-emission options for their customers. Attendees of this year’s ACT Expo were on hand for another historic main stage session, as the leaders of Daimler Truck North America, Mack Trucks, Navistar, Peterbilt, and Volvo Trucks North America met for the CEO Roundtable on Scaling Vehicle Electrification.

Moderator Art Vallely, president of Penske Truck Leasing, questioned the panel on the progress in their battery-electric vehicle programs, the challenges they’ve overcome along the way, and hydrogen’s part in the future of trucking. Panelists included:

  • John O’Leary, President and Chief Executive Officer, Daimler Truck North America
  • Mathias Carlbaum, President and Chief Executive Officer, Navistar
  • Jason Skoog, General Manager, Peterbilt and PACCAR Vice President
  • Peter Voorhoeve, President, Volvo Trucks North America
  • Jonathan Randall, President, Mack Trucks North America

Vallely began the session with a look back, asking the OEMs about how they see the development of electric vehicles over the last five years, specifically if they are on schedule with respect to production and price points.

“Back in 2018/2019, we really didn’t know what we were doing; we just knew we had to do something. I would say there’s been some positive surprises,” said O’Leary, highlighting the collaboration between the OEMs, both in North America and globally, which brought the industry closer together in terms of developing the technology. “I think the products that everybody has are probably in a more advanced state than we would have thought they be at this point in time. On the negative side, I think we would have thought that maybe the ramp up curve would have not flattened out as it has really at this point.”

Carlbaum echoed those thoughts, adding that the deployment phase is much farther than he expected from five years ago, which makes all the difference in the movement towards electrification.

“And if you look back again, five years, in any OEM, we were talking one day, more than 50% of the R&D budget was certainly going to new technologies and applications, etc. That point is passed as well,” he explained. “We’re up to 80-90% of that, which proves also that the speed that we can look in the coming five years will be accelerating from what we’ve seen this past five.”

The industry has work to do, according to Skoog, who flagged the challenges related to range, battery cost and vehicle weight. But in the past five years, the industry has also seen a number of innovative developments in the vehicles and their related technologies.

“We’ve got an EV truck, a low cab forward refuse truck, and we’ve got a regional haul classic truck tractor. We’ve done two different powertrains,” said Skoog. “We’ve done deployments, hundreds of deployments, and not just to California. Some of our first deployments were in Alaska, and Idaho and Michigan. So, we’re in cold weather and we’re learning, that’s an important step here.”

Looking back to the Volvo booth in 2019, Voorhoeve remembered a plastic mockup of what the OEM would someday create in terms of electric and autonomous vehicles. Fast forward to 2024, and Volvo’s ACT Expo booth displayed working versions of not only the VNR Electric, but a production ready autonomous vehicle as well.

“I think from a creation point of view it’s gone really far,” said Voorhoeve. “Are we right we want to be? I frankly don’t know because I didn’t know at that time where we wanted to be. What we wanted to do was make a zero-emission offering that sustainable, and we are there.”

Like Voorhoeve, Randall is pleased with the developments and advancements they’ve made and continue to make with the products they’ve electrified. Four years ago, the OEM launched its first foray into EVs with a refuse truck because they believed that is a perfect application for battery electric.

“Our optimism and exuberance were probably way ahead of the markets willingness to accept that technology and adopt, but we’ve made strides there for sure,” said Randall. “And there’s more and more interest in the technology. The interesting thing, as we learn, is this drive towards economic and operational parity to what’s in the market today, from diesel offerings, and, of course, we’re not there, but we’re starting to get there.”

Vallely soon steered the panel to a subject that has piqued many fleets’ interest – electric vehicle residual value. According to the Penske president, they’ve seen pushback from customers on residual values of first- and second-generation electric vehicles and who holds that connected risk in terms of resale.

Mack’s Randall was the first to respond, pointing to the OEM’s ElectriFi program, which includes the truck, body, charging system, residual value and insurance, and physical damage insurance.

“It’s based on a mileage charge, and every month we bill you X dollars per mile over the course of three, four, or five years. You just hand the truck back to us, because we’re trying to remove that risk that customers are feeling to adopt the technology,” said Randall, who pointed out that while there has been some interest, they have yet to sign up any customers.

The infrastructure challenges were the next topic of discussion, with Daimler Trucks’ O’Leary taking lead on the subject, discussing Greenlane, a joint venture with NextEra Energy Resources and BlackRock that was announced in April 2024. Greenlane’s first site is being developed in Southern California, and multiple sites are being acquired along various freight routes along the east and west coasts and in Texas.

“That’s something we wouldn’t have done a few years back, but we decided we just can’t sit on the sidelines, say we have a truck, and that’s good enough. We wanted to participate in trying to solve that infrastructure problem,” said O’Leary, who also discussed Powering America’s Commercial Transportation, or PACT, a coalition that focuses on both education and advocacy to accelerate the development of nationwide charging infrastructure for medium- and heavy-duty zero-emission vehicles. “All of us are involved in PACT to try to help raise the awareness of infrastructure issues, and really try to help from the governmental and regulatory standpoint to bring more awareness and more pressure to get that developed, because it seems to be that, just left to their own devices, it’s not happening fast enough.”

Voorhoeve, pointing to the fact that 80% of the commercial truck market share was seated on the stage, applauded the efforts of the OEMs and their involvement with PACT, as well as the commercial fleets, infrastructure developers, electric utilities, policymakers, and regulators who have joined as well.

And looking to the infrastructure development so far, Navistar’s Carlbaum explained how the challenges that have been faced when developing charging sites is helping stakeholders today.

“The partners that we have now are much more robust — the conversations with the hardware manufacturers, sorting out who is who. Who is the operator that can take a turnkey solution, deliver value for time and commitments, be part of risk sharing. All of that was very different from when these procedures were deployed three or four years ago,” said Carlbaum.

The conversation soon turned to hydrogen, with Vallely discussing the U.S. Department of Energy’s Hydrogen Hubs program, which will funnel $7 billion to establish six to 10 regional clean hydrogen hubs across America.

But, even with all the press surrounding the hubs, Skoog was first to point out that it should not take away to focus on battery-electric trucks.

“Battery electric is the only real-world technology today that has been a delivery service vehicle, so we all have to stay focused on that,” said Skoog. “If hydrogen is going be a solution, then you to have more of that infrastructure done now. It’s almost like it’s a Field of Dreams moment — if you build it, we will come right. You have to have that infrastructure out there.”

With all the zero-emission vehicle tech talk, Vallely decided to take a moment to address the most utilized engine type in the industry, diesel.

“What do your customers need to know about the future of diesel technologies?” asked the session’s moderator as he turned once again to the panel.

“Diesel is going to be the predominant powertrain still for quite some time,” started Skoog, who was not ready to predict the date when diesel goes the way of the dinosaurs. “We are going to have a CARB-compliant engine here shortly; we’re designing engines to be compliant with the 2027 regulations and beyond.”

O’Leary was next to chime in, “The diesel business is paying for all of this. Obviously, it’d be great to get further up that adoption curve with zero emission, but at this point in time, it’s 99% of the trucks that are sold, and we will gladly reinvest that into the future.”

“The current diesel engine is diesel 60 times cleaner than it was at the beginning of the century,” added Voorhoeve. “The internal combustion engine will continue to exist in the future after 2040, after 2050, and we can ask ourselves, what kind of fuel do we use? Are we able to use fossil-free fuels? The internal combustion engine will get its 150th birthday and its 200th birthday.”