View DetailsClass 8 short-haul tractor truck with attached trailer. Source: PowerProgress.com
PowerProgress.com
Toxic air lurks as an unseen danger for nearly 45 million Americans living near major highways and roads – and pollution from heavy-duty vehicles, tractor-trailers and other large trucks is a leading culprit. These vehicles primarily use diesel engines, preferred over gasoline for their ability to haul heavy loads.
However, diesel’s downside is significant––its exhaust contains more than 40 known carcinogens, contributing to nearly 9,000 premature deaths annually in the United States. The human toll is so severe that some parts of Los Angeles are now designated diesel death zones. Despite constituting just 6% of vehicles on the road, HDVs belch more than a quarter of U.S. transportation sector carbon emissions.
Electric trucks are a crucial solution, but just like the electric vehicles accelerating onto roads today, electric trucks still depend on affordable batteries to make economic sense. Passenger EV costs have fallen so fast that they’re now cheaper off the lot or over a vehicle’s lifetime compared to gasoline powered cars, but electric HDV cost forecasts have traditionally lagged, not expected to reach cost parity with diesel for decades.
However, new Energy Innovation research shows electric HDV cost declines have accelerated, meaning they are on track to be cheaper than diesel decades faster than expected. This economic progress is important for fleet operators planning their purchases and government officials considering policies to encourage the electric HDV transition.
As the U.S. Environmental Protection Agency finalizes the next set of emissions standards for HDVs, EI’s findings suggest the financial advantages of adopting strong new EPA standards are likely to surpass earlier predictions.
Electric HDVs have no smokestacks or tailpipes, and their batteries recharge from an increasingly clean electricity grid, making them a pivotal sustainability shift, a leading climate solution, and a lifeline for local communities fighting for cleaner air and better health.
Batteries Charging The Future
EI’s new research draws on a recent Bloomberg New Energy Finance’s battery cost forecast (“the updated forecast”) which shows the cost gap between HDV and light-duty vehicle battery packs are narrowing faster than previously expected.
The analysis compares the updated forecast to an earlier HDV battery price forecast from the International Council on Clean Transportation (“the prior forecast”). The EPA drew on ICCT’s forecast in its “Draft Regulatory Impact Analysis,” the preliminary evaluation of its proposed HDV standards. The updated forecast predicts costs will fall faster than previously expected– in 2030, for example, HDV battery pack prices fall to $85 per kilowatt-hour in the updated forecast, compared to $123 per kWh in the prior forecast.
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Two HDV battery pack forecasts: updated (BNEF) & prior (ICCT). The $59/kWh value for “updated 2040 ... [+] [estimate]” is based on the 17% learning rate employed in BNEF’s forecast through 2035 and HDV deployment in BNEF’s Economic Transition Scenario. The “prior forecast [estimated] curve interpolates between “prior forecast” data published in ICCT’s report. All monetary values are in 2022 dollars. Sources: BNEF, ICCT.
BNEF, ICCT
Future battery cost decreases will make the future of electric HDVs more financially accessible. Consider class 8 short-haul tractor trucks, primarily used to connect ports and rail transport hubs, which often drive through highly populated urban areas like southern California or the New York-New Jersey metro area. The electric version of class 8 short-haul tractors saves an estimated $7,000 compared to diesel in 2030 instead of costing $14,000 more at the prior forecast. In 2040, the purchase cost of an electric version is $20,000 less than diesel, compared to $12,000 previously.
This illustrates a common dynamic across all vehicle categories: Most additional savings from the updated forecast are from lower battery costs, but a small portion results from lower “indirect costs” covering expenses that are necessary for a manufacturer but not directly related to vehicle production including research, development, marketing, and profit margin.
Class 8 Short-Haul Tractor Cost Comparison for 2030 and 2040. Sources: BNEF, ICCT, and EI ... [+] calculations
Energy Innovation
By 2030, even when excluding available consumer incentives, electric HDVs will be less expensive than their diesel counterparts in four out of five categories analyzed.
BEV vs. diesel purchase cost comparison in 2030. Sources: BNEF, ICCT, and Energy Innovation ... [+] calculations
Energy Innovation
By 2040, electric HDVs are the lowest cost purchase option in all five categories.
BEV vs. diesel purchase cost comparison in 2040. Sources: BNEF, ICCT, and Energy Innovation ... [+] calculations
Energy Innovation
Purchase price is only one component of the broader economic concept known as the total cost of ownership. TCO encompasses all expenses associated with purchasing and operating a vehicle, thus highlighting the advantages electric HDVs offer in terms of fuel and maintenance costs.
Understanding TCO is crucial for interpreting the finding that diesel remains less expensive at the point of purchase in 2030 for class 8 long-haul tractor trailers. This result stems from the assumption they will require the largest battery packs of any vehicle to support extensive travel distances – more than 100,000 miles annually.
Previous ICCT analysis projected that by 2030, class 8 long-haul tractors would be more cost-effective than diesel in terms of TCO, even without accounting for consumer incentives or the optimistic future costs of HDV battery packs highlighted in EI’s study. The latest findings indicate that long-haul tractor trucks, and electric HDVs in general, are expected to achieve an unsubsidized TCO advantage years earlier than 2030.
Calibrating Heavy-Duty Vehicle Emission Standards
At their root, vehicle emission standards are principally designed to protect public health and wellbeing, but economics is a major factor in shaping what is feasible. EI’s new research underscores the growing affordability of electric HDVs, which supports stronger HDV emissions standards.
The economic benefits of proposed HDV emission standards are likely to be greater than previously estimated for federal and state policy. So far, 11 states, representing 25% of the national market, have adopted California’s Advanced Clean Truck standards. State-level officials considering whether to support stronger HDV electrification policies should expect higher financial benefits than earlier analysis.
For policymakers everywhere, this is a crucial juncture, a prime opportunity to enhance public health, accelerate climate solutions, and spur sustainable economic growth through forward-thinking policies. Strong HDV emissions standards as the cornerstone of a multi-faceted policy strategy for achieving transportation electrification, will clearly signal the future direction of the market, unleashing the innovation and investment needed to fully realize electric HDV’s exciting potential.
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