Lidar Systems CEO Robert Sanchez's push into EVs requires a catalyst to make the technology more economically and operationally feasible for the commercial trucking industry. During a keynote address at this year's ACT Expo in Las Vegas, Sanchez spoke candidly about how electric trucks will fit into his company's fleet.
“From our perspective, commercial EVs need a breakthrough in battery technology and an expanded charging infrastructure to function in the real world. We need a tipping point of a credible technology breakthrough that will trigger mass adoption of the new technology,” said Sanchez, backing up his point with the evolution of the mobile phone industry since 1984 and the launch of the Motorola DynaTAC 8000X. “It weighed 2.5 pounds, provided 30 minutes of talk time on a single charge, and took 10 hours to reach full battery capacity. In today's money, the price of this breakthrough would be $12,000.”
Fast forward to the modern era and technology has not only evolved by leaps and bounds but has also changed the way the world works.
“Just like mobile phones, we need to bring down the cost of electric vehicles. We need smaller, lighter and more powerful battery technology to improve range and capacity. And just like mobile phone networks, we need a nationwide infrastructure. We need the fastest applicable charging so professional drivers can conveniently charge their trucks, eat and rest at the same time,” Sanchez said.
To better understand the costs of transitioning to EVs, Ryder conducted a quantitative analysis comparing traditional diesel engines with EV technology. To determine the total cost of transportation (TCT), the Ryder team compared diesel and EV costs across light, medium, and heavy commercial classes. The analysis, based on representative loads from their own dedicated transportation operations, found that converting to EV technology in today's market would result in significant increases in costs.
“We expected costs to increase, but we didn't anticipate the magnitude of the increase,” Sanchez added.
To determine the TCT for electrifying a fleet, Ryder calculated the cost of the vehicle, the fuel (diesel or electric), the driver’s wages, and other factors required to transport the same load the same distance and achieve comparable delivery times.
After crunching the numbers for some of their customers, Sanchez and his team began to realize that in many cases the business case for switching to EVs just wasn't there yet.
“If you take the average load that's currently being hauled by a large diesel tractor and convert that tractor to electric, you'd need almost two vehicles and two or more drivers to haul the same load at the same time as one diesel vehicle, more than doubling the TCT,” Sanchez says. “I think most of you would agree that this is a tall order.”
From there, the team ran comparisons of diesel and electric light vans, medium trucks, and heavy trucks using cost assumptions for both California and Georgia. Many of the customers have more than one vehicle, but fewer than 50, so the team applied individual costs to a mixed fleet of 25 vehicles.
Again, we added up the costs of the vehicle, maintenance, fuel/electricity, required charging infrastructure, driver wages, general administrative costs, etc. The final part of the equation was range and payload capacity.
Starting with the van sector, California and Georgia saw cost increases of just 3% and 5%, respectively, due to cheaper maintenance and lower fuel costs with electric fuel compared to diesel. But again, this is only a one-to-one comparison, and the Ryder Report finds that the cost difference widens significantly when mixed fleets are included. Finally, California's mixed fleet of 25 vehicles saw an overall increase of 56%, while the Georgia fleet saw an increase of 67%.
“Extrapolating a mixed fleet analysis of a 100% transition of the U.S. commercial vehicle fleet to EVs, and assuming companies pass on increased transportation costs to consumers, we estimate that these cumulative cost increases would add 0.5-1% to overall inflation,” Sanchez explained.
His next topic on the agenda was charging infrastructure, looking at the total cost of installation and the cost to the grid of having more power available to charge these vehicles.
“The Clean Fleet Coalition estimates that electrifying today's vehicles will require nearly $1 trillion in investment in charging infrastructure and grid improvements,” Sanchez said. “By 2035, with more commercial EVs on the road, the projected power demand for large truck stops will be 20 megawatts, or roughly the power demand of a small U.S. town. And by 2045, the projected power demand for large trucks will be 40 megawatts, approaching the power demand of a large factory.”
Overall, Sanchez explained that the goal of the report, “Charged Logistics: The Cost of Converting to Electric Vehicles,” is to highlight the cost differential between diesel and electric vehicles and identify cost drivers to help OEMs, solution providers and regulators focus their development efforts to reach zero-emissions goals.
“We believe these are advances in battery technology to address payload and range limitations, reduce vehicle costs, and build sufficient charging networks and associated power grids,” Sanchez concluded. “Our experience with lidar is that when new technology comes to market, people and companies see the benefits, and mass adoption follows. All of us in this room and the entire industry need to work together to strike a balance between fostering innovation, protecting the interests of businesses and consumers, and protecting the environment. And we believe that is the key to a successful transition to a zero-emission future.”
