Volvo Trucks North America recently logged an order for 60 VNR Electric Class 8 trucks as it starts to gear up its green vehicle business.
The order came from NFI, a carrier that will use the trucks to haul goods between the Southern California ports and inland distribution centers. Volvo Trucks North America President Peter Voorhoeve said the order signifies things to come. More carriers are starting to transition from diesel to electric trucks.
Voorhoeve sat down with Trucks.com recently to discuss the company’s progress in selling electric trucks. Here’s an edited version of that conversation.
To date, most of the orders for the VNR Electric have come in small numbers compared to what you do with the diesel version. Is interest starting to pick up?
You will see larger orders coming in in the second half of this year and the beginning of next year. I mean in the hundreds. It is starting to get serious. There are some that we haven’t announced, and of course, the larger deals take more time as well. Also, I expect you will see the smaller orders come back with larger orders. Look at Performance Team. They started with 16, and nine months later they came back with 110.
Most of these orders are supported by various price incentives from regional, state and federal environmental regulators. How significant are those subsidies to these deals?
They are very important. We need to continue with the good incentive programs we have right now because we need to get the ball rolling. If we have the incentives, we start to get volume, and when we get volume we start to have scale effects and the trucks will go down in price. But at the same time, we also are starting to see some customers now and then buy these trucks without incentives.
At what volume will the electric truck acquisition and cost of operation come down to the level of diesel counterparts?
That’s the million-dollar question, right? We don’t know because there are so many factors influencing the cost of an electric vehicle. The asset purchase is higher, but the energy efficiency is better and the energy cost is lower. Somewhere in this decade the total cost of ownership will be competitive versus diesel.
Volvo’s VNR Electric regional haul truck.
Will high diesel prices now make parity come sooner than later?
I am not sure. Logically you would say yes, but part of the reason diesel prices have gone up is the war between Russia and Ukraine. Do you know what else comes from that area? How about lithium for batteries. So it is difficult to say. There are so many variables.
At the giant Southern California port complex, thousands of trucks are driven by independent drivers who could not afford a new diesel VNR, let alone the electric one. How do we clean that up?
It must be some sort of incentive program again. I think there are different ongoing initiatives and that something will be announced. But we have to know our place. We are the manufacturer. The drivers you are talking about do drayage and work for conglomerates and corporations. Something needs to happen there and I know they are working on it. But the short answer is some sort of incentive program.
What is Volvo Trucks’ goal for reducing emissions?
We think that by 2030, we should be able to get to a 50 percent reduction in carbon emissions, which basically means that 50 percent of our orders should be electric vehicles. And by 2040, we believe that should be 100 percent. But by 2040, we won’t be going with only battery-electric vehicles. They are very good for distribution and regional haul. We have a range of 275 miles which allows for serious regional haul.
But for the longer heavy haul applications, you will need a fuel cell electric vehicle because of the range considerations and weight. Batteries are heavy. We also believe that there is still space for internal combustion engines, but with engines that use renewable fuels.
Jerry Hirsch May 12, 2022
Daimler launched its electric Freightliner and Volvo logged more VNR Electric truck orders at ACT Expo conference.
Source: https://www.trucks.com/2022/05/16/volvo-trucks-president-explains-electric-truck-strategy/
