Fleet electrification in the US to cost USD$1 trillion

A new report details the biggest challenges the US must face when transitioning its national heavy vehicle fleet to zero emissions.

The charging infrastructure required to electrify all medium and heavy duty vehicles and charge point operators in the US is expected to cost USD$620 billion.

In addition to this, onsite charging infrastructure for the medium duty segment is forecast to cost USD$496 billion however heavy duty vehicles call for more significant infrastructure – an average investment of USD$145,000 as opposed to USD$54,000 per medium duty vehicle.

A further USD$69 billion is needed for reliable on-route charging for high mileage vehicles. Meanwhile, long haul vehicles would need a dense highway charging network (USD$57 billion) however this development would be constrained by the capabilities of the transmission grid infrastructure.

To support local charging demand from medium and heavy duty electric vehicles, the utilities would need the equivalent spend of investments and upgrades previously made over the past 15 years – USD$370 billion.

The report, Forecasting a Realistic Electricity Infrastructure Buildout for Medium- & Heavy-Duty Battery Electric Vehicles, recommends a phased electrification approach with an initial focus on the medium duty segment which would then be followed by technology and infrastructure improvements for heavy duty and long haul.

Another consideration for industry is to be open to alternative decarbonisation routes especially when investment in electrification in some instances may be prohibitive.

Other ideas include exploration of operational and fleet management strategies, potential for freight rate increases due to lack of government and regulatory support and potential for bottlenecks in unmanaged charging demand.

Ultimately, the report, which is from Roland Berger and released by the Clean Freight Coalition (CFC) earlier this month, highlights the need for greater cross-industry collaboration in regards to electrification.

CFC is an alliance of transportation stakeholders committed to a clean energy future for America’s commercial vehicle industry. It said policymakers must address the cost concerns and infrastructure hurdles to make an electrified supply chain function smoothly for the American economy.

The report found that while medium duty vehicles will face fewer roadblocks, economic and operational constraints make electrification very challenging for the heavy duty segment. Furthermore, the study outlined the significant improvements in battery range and charging infrastructure capabilities that would be needed to support a path for the electrification of long haul vehicles.

CFC members include American Trucking Associations, American Truck Dealers, National Association of Truck Stop Operators, National Motor Freight Traffic Association, National Tank Truck Carriers and Truckload Carriers Association.

Roland Berger Senior Partner, Dr Wilfried Aulbur, said fleets will need to look at how they operate and adjust, industry and government need to cooperate and there needs to be an ‘openness’ to alternative technology paths to decarbonising the heavy duty segment.

“It also is clear that an industry with a yearly turnover of about USD$800 billion and a profit margin around 5.0 per cent cannot invest USD$620 billion without financial support or a significant increase in freight rates,” he said.

CFC Executive Director, Jim Mullen, said the report thoroughly examines the issues surrounding the infrastructure buildout necessary to electrify commercial vehicles.

“Also, it clearly shows how the heavy duty vehicle industry’s needs are vastly different not just from other sectors of our economy, but from each other.”

American Trucking Associations President and CEO, Chris Spear, said the industry is facing an unfunded USD$1 trillion mandate that carries enormous consequences for the American consumer.

“You don’t overcome obstacles by ignoring them, which this study lays out the high investment costs required to electrify the commercial vehicle industry,” he said.

“Policymakers should take note that pursuing technology-neutral solutions can deliver operational savings and emissions reductions at a fraction of the cost. A real-world understanding of the path to our shared goal of zero emissions is needed, but unrealistic timelines and expectations will break the bank.”

American Truck Dealers President, Laura Perrotta, said dealers are faced with inadequate charging infrastructure and delays despite investments of nearly one billion in this decade to sell and service electric vehicles.

“This study puts into perspective the enormous national commercial charging needs and related costs required to meet the Administration’s regulatory goals,” she said.

NATSO President and CEO, Lisa Mullings, said the report demonstrates that policy must not depend on a single technology to reduce carbon emissions from commercial trucks.

“Investing in the necessary charging stations to fuel commercial trucks is expected to require USD$620 billion from truck stops, fleets and ultimately consumers,” she said.

“To raise that kind of capital, we need to overcome the many challenges impeding businesses’ ability to recoup these vast investments. This report underscores the critical need for policymakers to incentivise the existing low-carbon fuelling options available today, including renewable diesel and biodiesel, while the industry implements longer-term options.”

National Tank Truck Carriers, President and CEO Ryan Streblow, said the report reinforces the tank truck industry’s concerns on the current aggressive and unrealistic regulatory approach to zero emissions.

“We will continue to face major electrification concerns in the tank truck industry – excess weight, limited range, and safety,” he said. “The tank truck industry is our nation’s insurance policy when natural disasters strike. Before flipping a switch, we need to ensure there is a scalable and affordable energy source in place to allow the tank truck industry to serve those when they need it the most. The Roland Berger data is a clear indication our legislators and regulators need to work with the trucking industry to effectively develop and deploy a sustainable long-term solution.”

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