The car manufacturers have promised to scrap the internal combustion engine, now it’s the turn of the truck manufacturers. But the manufacturers of the giant 18-wheelers are taking a different approach.
Daimler, the world’s largest manufacturer of heavy trucks, whose Freightliners are a familiar sight on American motorways, announced last week that it would switch to zero-emission vehicles in 15 years at the latest, providing yet another example of what the shift to electric drive is like in the redesign of the Vehicle construction with a significant impact on the climate, economic growth and jobs.
The road away from fossil fuels will be different in the truck industry and will take longer than for cars. On the one hand, emission-free long-distance trucks are not yet available in large numbers.
And a different technology may be required to drive the electric motors. Batteries are well suited for delivery vehicles and other local transport trucks that are already on the road in large numbers. But Daimler argues that battery power, at least with current technology, isn’t ideal for long-distance 18-wheelers. The weight of the batteries alone takes off too much of the payload, an important aspect for cost-conscious freight forwarders.
Instead, Daimler and some competitors are relying on fuel cells that generate electricity from hydrogen. Fuel cells produce no tailpipe emissions, and hydrogen tanks can be filled just as quickly as diesel tanks – a clear advantage over batteries, which normally take at least twice as long to charge.
In April, Daimler began testing a prototype of the “GenH2” long-haul truck that can travel 600 miles between visits to the hydrogen pump. But there is still a lot of work to be done to reduce the cost of the equipment, and there is still no network of hydrogen filling stations or a sufficient supply of hydrogen produced in such a way that the environmental benefits are not negated.
Last week, Daimler announced details on how to solve these problems, with the aim of selling hydrogen-powered long-haul trucks by 2027 that are cheaper to buy and operate than diesel models.
During an online presentation on Thursday, Daimler executives announced a partnership with Shell to build a “hydrogen corridor” for filling stations through Northern Europe. For short-haul trucks, Daimler announced a partnership with the Chinese company CATL to develop batteries and partnerships with Siemens and other companies to install high-voltage charging stations in Europe and the USA.
In March, Daimler and Volvo Trucks, who are usually strong competitors, formed a joint venture to develop fuel cell systems that convert hydrogen into electricity to power long-haul trucks. The message is that even for a company the size of Daimler with sales of 154 billion euros last year or 188 billion dollars, the energy transition is too big to handle on its own.
Daimler has been working on hydrogen fuel cell technology for decades, but the technology is not yet cheap enough or robust enough for commercial use.
“Today’s fuel cells do not meet the demands that we have of our customers at all,” said Lars Stenqvist, Chief Technology Officer of Volvo Trucks (which is a separate company from Volvo Cars), in an interview with the company’s headquarters in Gothenburg, Sweden. “That is a reason to join forces with Daimler to share this development burden.”
Daimler, based in Stuttgart, plans to spin off its truck and bus construction from the Mercedes-Benz Passenger Cars division this year and to found its own company with its own stock exchange listing. The spin-off from Daimler Truck announced in February is a significant event for the company, which has its roots in the inventors of the automobile and was once a large corporation that manufactured not only cars, but also planes and trains.
One rationale for the amicable divorce is to give the trucking unit more room to maneuver to respond to technological change, while also raising money from investors to fund the huge cost of developing zero-emission, long-haul vehicles.
“Independent management and governance will enable them to act even faster,” said Ola Källenius, Chairman of the Board of Management of Daimler, on Thursday.
Daimler managers admit that parts of the truck business are ailing. In the USA, Freightliner, which Daimler took over in 1981, is the heavy-duty truck brand with more than a third of the market. In Europe, however, Mercedes-Benz trucks have lost market share and are lagging behind their competitors in customer satisfaction surveys.
Karin Radstrom, who was hired by rival Scania this year to fix Daimler’s truck business in Europe and Latin America, said the company put too much energy into fancy tech that customers are unwilling to pay for.
“We have partially lost contact with our customers,” said Ms. Radstrom during the presentation on Thursday.
As with automobiles, truck dinosaurs like Scania, a unit of Volkswagen, or Paccar, maker of Kenworth and Peterbilt trucks, are facing new competitors trying to take advantage of the transition to electrical technology.
Nikola, an Arizona-based truck start-up, was briefly worth more than $ 20 billion on the stock market. But the shares have lost three-quarters of their value since founder Trevor Milton stepped down last year on charges of making numerous false claims about the company’s hydrogen fuel cell technology.
Nikola has at least shown how eagerly investors are putting their money into hydrogen trucks. Another example is Hyzon, a fuel cell manufacturer based in Rochester, NY, which has begun offering complete trucks and buses. In February, Hyzon was acquired by Decarbonization Plus Acquisition Corporation, a so-called SPAC that collects money before it has assets.
Tesla unveiled a design for a battery-powered semi-trailer in 2017, with delivery scheduled to begin this year. Tesla, Scania and several other truck manufacturers are skeptical of hydrogen technology, which they consider to be too expensive and less energy efficient.
The traditional truck manufacturers like Daimler and Volvo have some advantages over the start-ups. Truck buyers tend to be handy hauliers or drivers who carefully calculate maintenance costs and fuel consumption before making a decision. Large fleet managers may also be reluctant to take a risk with a manufacturer without a long track record.
“There’s a lot more spreadsheet analysis and Ts exceeding before contracts are signed,” said Daniel Ives, a managing director at Wedbush Securities who follows the technology industry. “Daimler is in a massive position of strength.”
It’s a confusing time for trucking companies. They are facing pressure from regulators to reduce their climate impact before a wide variety of zero-emission vehicles are available for purchase, said Glen Kedzie, energy and environmental advisor for American Trucking Associations, an industry group. President Biden has promoted electric vehicles but has not yet defined what that means for the trucking industry.
Haulage companies, which have largely relied on diesel for centuries, have to rebuild their maintenance departments, in some cases install their own charging or hydrogen filling stations, retrain drivers and learn to plan their routes around hydrogen or electric charging points.
But Mr Kedzie said zero-emission trucks also have some advantages. The fuel costs for battery-powered vehicles are significantly lower than for diesel trucks. Maintenance costs can be lower because electric vehicles have fewer moving parts. Drivers like the performance of electric trucks – a major factor in America’s driver shortage moment.
Many companies that ship a lot of goods, like Walmart or Target, are trying to reduce their carbon footprint and are interested in zero-emission trucks. “There are many potential benefits,” said Mr Kedzie.
Daimler has set itself the goal of producing battery-powered short-haul trucks that can compete with diesel fuel by 2025, and fuel cell trucks for long-distance transport that will achieve diesel parity by 2027.
“The moment the customer benefits more from an emission-free truck than from a diesel truck, there is no longer any reason to buy a diesel truck,” said Andreas Gorbach, Chief Technology Officer of the Daimler Trucks and Buses division , during the presentation on Thursday. “This is the turning point.”