Jasper Konings shares key takeaways from Heliox’s recent research into the electric truck industry
Governments play an essential role in closing the adoption gap between electric cars and electric commercial fleets. The European automotive industry has witnessed an undeniable boom in the e-transition, with 22% of all vehicles now eco-friendly in 2022. While this is a positive development, commercial fleets are still trailing behind.
Electric trucks (eTrucks) are the last road vehicle to join the switch as regulatory bodies have mainly focused on switching consumers before businesses. But now as large automotive manufacturers such as Volkswagen, Hyundai and Toyota are all battling for electric vehicle (EV) dominance, governments can shift their focus on closing this e-transition gap.
Why HDVs and LDVs are the last to join the e-transition
The “Electrifying the charge ahead” report from Heliox shows that 47% of trucking fleet managers in Europe believe light and heavy duty vehicles (LDVs and HDVs) are the last vehicles to make the switch to electric due to the challenges surrounding charging infrastructure. A further 41% of trucking fleet managers require readily accessible charging points that are affordable in the face of an impending energy crisis. This means that fleet managers will need EV schemes that are geared towards lessening their dependence on diesel powered vehicles.
In order to successfully transition to fully electric fleets, businesses will also need guaranteed access to charging depots. As of 2022, there are only 31,507 charging depots across the UK. Research shows that there is an average of 420,000 EVs on the road, highlighting an urgent need for charging infrastructure investment to keep up with demand.
The demand for charging depots is only set to increase as European countries strive for a net-zero future. Fleet managers are aware of this, but finding a solution that is within budget and feasible is proving to be a challenge. Governments now have an opportunity to change the course of direction and assist fleet managers in addressing their concerns.
How to address setbacks in local government EV schemes
A total of 20 European countries have subsidy programmes to help consumers and businesses alike purchase EVs. Commercial fleets need to make the most of all available funding as this is vital to securing a successful e-transition. However, almost two-fifths (39%) of fleet managers say their company has not taken advantage of available electromobility schemes in their respective regions. This is in part due to the lack of awareness of such schemes. In the Netherlands, the second largest EV nation in Europe, 45% of fleet managers are unsure if their companies are even aware of local subsidies, with a further 26% fully in the dark.
It is more important than ever for governments to make fleet managers aware of all available funding. In Germany, over half of fleet managers are aware of the incentive schemes offered and as a result, they recorded the highest number of eTrucks registered in 2021.
This awareness is crucial as reducing the total cost of owning an eTruck creates momentum in EV adoption. The International Council of Clean Transportation (ICCT) predicts that eTrucks will become more price competitive than diesel trucks by 2025 in the Netherlands and 2026 in the UK, but this can be accelerated with greater awareness of support mechanisms.
To aid fleet managers’ understanding of the cost of owning a eTruck, greater awareness around the potential energy consumption of truck fleets can also help. An analysis of the industry outlines four different energy requirements depending on the businesses operation. A distribution only operation, with light good vehicles used in last mile delivery, requires 1 kWh/km of energy. A full-service distribution operation, with light and two-axle heavy goods vehicles with heavier freights consumes 1.3 kWh/km of energy. General highway operations, with long-haul and heavyweight trucks. requires 1.7 kWh/km of energy. Waste collection operations, with waste trucks that possess high additional power consumers, require 2.5 kWh/km of energy.
As fleet managers are currently feeling the financial effects of owning regular diesel trucks, this is the perfect opportunity for governments to demonstrate the full benefits of transitioning to EVs by offering tax relief incentives as well as toll-free transport and charging grants.
Spotlight on Germany
Out of the 1,394 eTrucks registered in 2021, 800 were German, revealing the Deutsche nation as leading the trucking e-transition within Europe. The only other countries keeping up with Germany are the UK with 333 registered eTrucks and the Netherlands with 216. Germany has managed to achieve successful fleet electrification through three key pillars: the shift away from diesel powered trucks; strong awareness of governments electromobility programmes; and investment in public charging options.
Reliable and accessible charging point infrastructure can only develop with robust policies and consistent investment
To shift away from diesel powered trucks, the HoLa project (high-performance charging in long-haul trucking) was launched by the German Federal Ministry of Transport and Digital Infrastructure (BMVI) in 2021. This innovation cluster of eco-friendly truck driver technology aims to bring industry-wide change to the forefront of the German market. The effect of the HoLa project has been increased collaboration between various manufacturers and policy makers to bring about further standardisation in the location of charging plugs.
In bringing awareness to electromobility programmes, Germany’s Umweltbonus (environmental bonus) programme offers grants of up to €9,0000 in EV purchases that are proven to resonate amongst those in charge of electrifying fleets. We see this with over 50% of German fleet managers being aware of subsidy schemes offered by their government with a further 60% taking advantage of this.
By investing in public charging options, Germany is leading the way with impressive tax relief and toll-free options for eTrucks, whilst funding 80% of infrastructure costs. With this approach, local German authorities are positioned perfectly to effectively push for top-down reforms, becoming powerful climate advocates as they implement the three key transition pillars.
The power lies in the governments’ hands
The automotive industry is undergoing a deep technological shift where environmental concerns are shaping the direction of policy and innovation. Now that European automotive powerhouses are pivoting towards GHG reduction, budgeting for change will be a key strategy for all European governments as most companies plan to fully electrify their fleets by 2040. As things stand, only 12% of businesses are on track to reach full electrification by 2030.
To achieve the ambitious yet attainable goal of net-zero emissions by 2050, plans for mandatory targets related to charging point infrastructure are essential. Rapid charging infrastructure will be the fundamental backbone in supporting commercial fleets whilst also facilitating other eco-friendly transport services—something the industry is already seeing with the recent EU legislation that requires member states to build EV charging points every 60km on motorways.
Individuals with decision making power at the national and regional level are in a prime position to future-proof the EV industry. Reliable and accessible charging point infrastructure can only develop with robust policies and consistent investment, placing the acceleration of electrification in the hands of the government.
About the author: Jasper Konings is Director of Commercial Vehicles and Fleets at Heliox