Electric trucks to be cheaper than diesel
The Biden administration, they’ve been pretty criticized for wanting to encourage electric trucks, electric semis.
The Biden administration are saying it’s debuting an infrastructure plan to electrify the nation’s trucks by 2040. I mean, this is nearly 16 years away.
However, some experts are saying that, you know, this is not a good idea. They should just make them hydrogen powered.
And why not just keep trucking diesel powered? Well, the Biden administration have released the first ever strategy document detailing its plan to target specific freight corridors for infrastructure improvement with the intent of reaching the goal of 100% zero emission truck sales by 2040.
Now, as you can imagine, Republicans, a lot of them think, not all of them, but a lot of them think this is ridiculous.
However, a new report has emerged that says electric trucks will actually hit price parity with diesel trucks ten years sooner than was expected, thanks to enormous declines in the cost of batteries.
Rapidly Evolving Battery Technology
Tesla makes the semi, doesn’t really make much profit on the semi.
It’s not really a key profit driver for Tesla, but that is going to change. Now. Electric trucks will hear price parity with diesel about ten years faster than expected.
This is all thanks to plunging battery costs, says the driven.
Now the driven says that a new study has found electric trucks are on track to hit upfront cost price parity with their diesel category equivalents way many, many years earlier than expected.
This is basically what Tony Sieber has been telling us now for ten years. But we probably should have listened to him sooner. This is because of rapidly falling battery prices.
Now, a lot of electric cars, at least vehicles that don’t need huge batteries, they will hit price parity or possibly be cheaper to manufacture by the end of next year. It’s not just Siba saying this now.
Tony Sieber was everyone, not everyone, but a lot of experts said he was crazy, wrote him off.
But I think we should just basically write down whatever he says as a prediction and just accept it’s going to happen.
The new report from Energy Innovation says that because heavy duty vehicles require larger batteries, their purchase prices are much more sensitive to battery costs.
For this reason bloomberg New energy Finance BNEF their recent outlook for heavy duty vehicle battery packs marks a pivotal shift, indicating battery electric vehicles will reach price parity with their diesel counterparts sooner, much sooner than previously anticipated.
Battery Technology Advancements and Cost Reductions
To get a sense an idea of the sizes of batteries you need, a first Volvo FH electric prime mover sold in Australia, says the driven.
It had a 540 kilowatt hour battery pack, a range of 300km. The Tesla semi I believe has a slightly bigger battery pack than that for a range of around or about 400 miles, maybe even 500.
So yeah, this gives you an idea of the battery pack sizes they’re very, very big.
But in its price parity forecast last year, energy innovation predicted battery costs would be around US $123 per kilowatt hour by 2030, which I don’t know why they made that prediction.
It sounds insane to me anyway, because of rapidly declining prices in the cost of battery raw materials, they’ve changed their forecast to us $85 per kilowatt hour, representing a 31% reduction.
Now, I don’t believe this is correct. The reason being they’re not accounting for the increase in energy density.
Now, if we look at the increase in energy density over the past six months from different batteries that have been announced, LG Came just said their new lithiumion phosphate batteries will have a 20% improvement in energy density.
Implications for Trucking Industry Economics
CATL’s new LFP batteries, similar improvement BYD are working on their own next generation LFP that are said to have a similar improvement in energy density.
So it’s not just the price per kilowatt hour that’s coming down, you got to keep in mind it’s the energy density going up at the same time.
So in theory, the price per kilowatt hour is coming down more than what it looks like. Energy innovation says the reduced prices means price parity for some truck types has been brought forward by many years.
Results reveal that the updated forecast significantly advances the crossover threshold for when BEHDV.
So battery heavy duty trucks are expected to fall below those of equivalent diesel.
So what they’re saying is actually electric trucks will become cheaper at some point than diesel trucks to manufacture and that point will happen quicker than we thought.
A negative result, i.e a difference in cost less than zero, means that battery vehicles are expected to cost less than the diesel equivalent.
So you can see from their chart they’re saying for many vehicles this will happen in 2030. Now I think they’re being pessimistic.
Environmental and Health Benefits
I think it’s going to happen before then. Consider short haul tractor trucks as an example of how the updated battery forecast affects vehicle costs.
Businesses use short haul tractor trucks urban and regional freight delivery.
It says these vehicles typically return to a home base at night, enabling the convenience of overnight recharging and avoiding the much larger capacity battery pack requirements of long haul tractor trucks.
So we can actually easily electrify a huge percentage of the trucking industry right now. Purchase price parity is coming.
However, electric trucks are already cheaper to run, says the driven they say that while purchase price parity hasn’t been reached in some categories, the economics of electric trucking already destroy their diesel counterparts if you include fuel costs.
Now, keep in mind as well that diesel trucks cost many, many thousands of dollars to service.
There’s huge overhauls they have to do on their engines. The engines do last a long time.
If you spend many, many thousands of dollars on their upkeep, that’s a huge part of the cost of a diesel truck. Plus, they’re very slow. So a lot of long haul routes in many places of the world include hills.
And if it includes hills, it’s going to be, well, a lot slower than an electric truck. The running costs of an electric truck are just so much better than diesel in so many different ways.
So is the time you can save time for reasons I just said, massive amount. For example, the Tesla semi can get up a 10% gradient at the same speed of highway normal highway cars.
Future Outlook and Considerations
So it’s safer and faster as well. Like electric passenger vehicles, electric trucks come with significantly lower running costs than diesel vehicles.
According to Tesla, its fully electric semi truck uses just two kilowatt hours per mile, or 1.25 kilowatt hours per kilometer. While fully loaded with 82,000 pounds that’s 37 tons.
Tesla says charging with electricity is approximately 2.5 times cheaper per mile than refilling with diesel.
Operators can see estimated fuel savings of up to $200,000 within their first three years of ownership.
Now that obviously depends on how far you’re driving. If you drive further, maybe more. If you drive less, maybe less.
But anyway, the average fuel savings for a diesel semi are astronomical if you get an electric one versus a diesel one.
As renewable energy prices continue to fall, the cost per kilometer of electrified road transport will also continue to decline with road freight impacting the supply chains of almost everything.
Decreasing freight costs means, well, everything becomes cheaper, everything becomes more affordable. Well, in theory, as long as your supermarket passes those savings on to you.
But, for example, things that we buy every day, we buy things off Amazon and eBay, things online that will become cheaper because the cost to deliver will be cheaper.
Now, keep in mind as well, eventually these trucks won’t have drivers. And that cost is even more significant than the cost difference between diesel and electric.
Now, the other big benefit here, guys, is that diesel trucks are terrible for the environment.
The amount of tire use, the brakes, the diesel exhaust fumes all of these things massively contribute to a lot of health problems that we have today.
If we can get rid of all those, all of us will be feeling happier, healthier, and have longer lives as a result.