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Home » Hype vs. reality: Are fleets gearing toward electric trucks?
Supply Chain & LogisticsExpert Columns

Hype vs. reality: Are fleets gearing toward electric trucks?

There are numerous reasons why electric trucks may continue to take a backseat when private transportation fleets and for-hire carriers are developing their truck procurement strategies.

February 19, 2019
Brian Holland
KEYWORDS alternative fuels / electric trucks / fleet management / fleet management solutions / trucking / trucking trends
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In 2018, the Class-8 Heavy-Duty truck and fleet industry sustained its dialogue, pondering the prospects of electrification of vehicles and where they stack up against diesel counterparts. While electrification may cultivate into a possible reality down the road, many in the industry remain dedicated to improving the output of quality returns found in diesel.

There are numerous reasons why electric trucks may continue to take a backseat when private transportation fleets and for-hire carriers are developing their truck procurement strategies. Items ranging from fuel economy, cost of investment, range and charging station infrastructure are at the top of the list of apprehensions for fleet managers.

In fact, an industry benchmark survey produced by Fleet Advantage, Fort Lauderdale, Fla., reveals that fuel economy ranked second (36.7%) as a top instigator overall for truck replacement. This is especially important since 86% said they’ve experienced a consistent increase in fuel economy in model years 2013-2018.

In terms of electric or hydrogen fuel-cell trucks, only 4% of respondents said they are presently procuring these types of trucks, and 53% said they neither see the value nor will they consider the technology for at least another 10 years. Nearly a quarter of respondents (21%) said they believe electric or hydrogen fuel-cell trucks will never be widely used for over-the-road operations. As for their reasons, 39.4% said they will not consider the technology because of limited fueling or charging station infrastructure, while 33.3% have concerns over the vehicle’s range or distance.

This perspective is further underscored by the fact that the recent price of diesel has increased above what industry forecasts projected. According to the “2018 Annual Fleet Fuel Study,” produced by latest North American Council for Freight Efficiency (NACFE), diesel recently increased to $3.28 per gallon, surpassing its projection of reaching just $2.72 in 2018.

Proponents of electrification point to the technology’s environmental benefits. However, many don’t fully realize the substantial gains diesel has made in these areas as well. Private fleets and for-hire organizations realize these benefits when they upgrade to the latest truck equipment. An analysis of Class-8 truck utilization from Fleet Advantage saw that these companies can realize a first-year savings of $26,687 when upgrading from a 2012 sleeper model-year truck to a 2019 model. This represents a 15.5% increase in savings compared with a similar analysis a year ago upgrading to a 2018 model when diesel prices registered $2.57.

In addition to realizing drastically better cost savings from fuel economy gains, fleets will also achieve an estimated 18% reduction in CO2 emissions and 46% reduction in NOx output when upgrading from a 2012 model-year sleeper to a new 2019 unit.

The industry will continue to gauge electrification as a possible asset for the transport of goods in support of the economy. However, the data continues to support diesel as the primary option for transportation, as newer truck technology makes great strides in improving fuel economy and lowering emissions. Coupled with lifecycle asset management strategies that leverage flexible lease models to reduce the total cost of ownership and upgrade into newer technology every 3-4 years, diesel will remain the most economically viable option for the foreseeable future.

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Recent Articles by Brian Holland

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Brian Holland is president and CFO at Fleet Advantage, Fort Lauderdale, Fla.

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