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Home » BLOG » State of the Electric Truck Market

Amid rising environmental concerns and the advance of alternative fueling methods, electric vehicles (EVs) and EV semi-trucks have become a hot topic of conversation.

WHAT IS AN ELECTRIC TRUCK?

Electric trucks are a new alternative to traditional diesel trucks, offering a more cost-effective and eco-friendly method to transport goods.

An electric truck is a battery-powered vehicle used to transport goods and cargo, such as an all-electric semi-truck. Electric trucks have fewer moving parts than traditional diesel trucks and can operate without multispeed transmissions. This simplification can greatly reduce the maintenance needed to keep these trucks on the road and nearly eliminate noise pollution.

EV semi-trucks are emerging as the preferred choice over standard diesel trucks because of their distinct advantages, including their lack of emissions, reduced maintenance costs, advanced torque, and more.

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HOW DID COVID19 IMPACT ELECTRIC TRUCKS?

In 2019, more than 2 million EVs were sold globally. Electric cars accounted for a record 2.5% of the global light vehicle market. In 2020, COVID-19 disrupted supply chains and led to the closing of many businesses, warehouses, and manufacturers worldwide.

These factors, plus the fear of an upcoming recession, lead to a significant decline in vehicle sales. These components are expected to make a significant impact on the market for electric trucks.

Government initiatives promoting alternatives to fossil fuels and strict emission standards imposed on fossil-fuel-powered vehicles are driving the growth of the electric truck market. However, with the lack of charging infrastructure and the expensive price tag on electric trucks, this growth is expected to continue at a slower rate in the current post-pandemic period.

HOW GOVERNMENT REGULATIONS IMPACT THE EV MARKET

As the global environmental crisis intensifies, more government mandates and regulations are demanding that large companies turn toward diesel alternatives, such as electric trucks.

In California, a new rule requires in-state truck manufacturers to sell a specific percentage of zero-emission trucks by 2024. By 2030, 50% of commercial vehicles sold by the original equipment manufacturer must generate zero emissions. In 2035, that number will increase to 75%.

States such as New Jersey and New York introduced similar regulations after California, and the District of Columbia and 13 other states have a memorandum of understanding declaring they will follow California’s lead.
Federally, the Biden administration has $174 billion from the president’s infrastructure plan earmarked to increase domestic supply chains for EVs. This allocation will include advanced technology for batteries and more charging stations.

Mandates and budget plans such as these pave the way for electric trucks to become an industry standard in coming years. While the EV market growth may be slow now, current and upcoming regulations could increase demand in the near future.

CURRENT STATE OF THE EV MARKET

Currently, EVs make up fewer than 1% of cars and trucks on the road. However, this number is set to increase rapidly over the next 15 years. General Motors announced earlier this year that it would stop selling new gasoline-powered cars by 2035, switching its focus to EVs.

Automakers including Tesla, Volkswagen, and Ford plan to announce dozens of new electric models in coming years. Government financial incentives and regulations are starting to encourage companies and citizens to make the switch to EVs.

Electric Truck Stats

Combined with these factors, President Biden’s promise to devote a budget toward implementing new EV infrastructure such as charging stations indicate that the EV market’s current upward trend will only increase over time.

IS THE GRID READY?

The trend toward hybrid and fully electric vehicles has major implications for companies selling and producing electricity and managing the grid. Nevertheless, most experts agree that powering millions of new cars with electricity is possible with deliberate planning.

Four main factors need to be addressed to ensure the grid will be able to function with millions of new EVs using electricity:

  • Charging station availability: For EVs to become the norm, charging stations need to be as accessible and convenient as gas stations are now. Many current EV owners charge their vehicles at home, which may not be an option for those who use on-street parking or live in large apartment buildings.
  • Number of power plants: If every American switched to an EV, the United States could use about 25% more electricity than it does today. Utilities will likely need to build many more power plants to handle this surge in use, which takes additional funding and city planning.
  • Charging time coordination: One of the biggest challenges could be organizing charging times to avoid straining the grid. Cities such as Los Angeles, which already struggles with power outages, have the potential to overpower the grid if everyone comes home and charges their EVs at once.
  • Cleaner grid design: Even EVs have room for improvement regarding reliance on fossil fuels. Although they are much cleaner than diesel and gasoline alternatives, EVs still rely on power plants burning coal or natural gas for power.

TESTING THE GRID

As manufacturing companies and utilities start making changes to prepare for an EV overhaul, some companies are trying to develop ways to test grid systems to ensure they can handle the added use. Strategic models can give companies an idea of how much extra strain the grid can support and whether it can handle a steep increase in EV usage.

Testing utilities can give grid managers a better sense of the changes or additions they need to implement to accommodate a sudden rise in electricity demand from commercial electric trucks and other EVs.

ELECTRIC TRUCK MARKET OUTLOOK

The demand for commercial electric trucks and other EVs is expected to grow exponentially. In the coming years, heavy-duty electric trucks are expected to have the fastest growth rate in the electric truck market.

Government regulations and financial incentives for alternatives to fossil fuels impact both heavy-duty trucks and the companies who own them, spiking demand for more electric trucks in the near future. The rapidly growing global freight demand is contributing to this expansion as well.

Electric trucks are also becoming more affordable. With access to effective and affordable batteries, electric trucks could be 50% cheaper to own than diesel trucks by 2030. Some studies indicate that by 2040, sales of electric vehicles will make up 70% of total new car sales.