Federal standards released Tuesday require cuts in fuel usage by 18 wheelers (semi-trucks) and that move could ultimately force manufacturers to ramp up plans to produce electric vehicles to replace the diesel burners of today.
Some experts say going electric is the only way to achieve Environmental Protection Agency and Transportation Department goals to reduce carbon emissions by up to 25% over the next 10 years.
With cautious acceptance by major truck manufacturers and large fleet operators, the new standards call for lower emissions which trucking executives admit will ultimately cut down on fuel costs.
Owner operators and small fleet owners are less enthusiastic, saying the cost of complying and the fees involved may drive them out of business. Some operators such as Waste Management, Inc. (NYSE:WMC), are already changing over to natural gas. Manufacturers like Cummins Inc. (NYSE:CMIB) are hurrying to create and sell more efficient engines.
Federal regulators suggest that by 2017, operators can expect to recover compliance costs in between 2 and 4 years.
Some Help From Government
Kenworth, a Paccar Inc. (NASDAQ:PCARC) subsidiary, turned to the government in its quest to develop low-emission tractors (trucks) designed to meet the new standards. The result, two projects funded at almost $2 million each by the U.S. Department of Energy (DOE) Office of Energy Efficiency and Renewable Energy (EERE), with Southern California’s South Coast Air Quality Management District (SCAQMD) serving as the prime applicant.
Kenworth will build two tractors to transport freight from the Ports of Los Angeles and Long Beach to warehouses and railyards along the I-710 corridor in the Los Angeles basin.
The first truck will be a hybrid electric drayage truck with zero-emissions utilizing compressed natural gas (CNG). The second cab will feature a hydrogen fuel cell offering true zero-emissions operation.
A third project, funded at $4.8 million by the California Air Resources Board (CARB) will require Kenworth to build four hybrid-electric trucks.
Electric On The Way
Many experts, including Ravi Shanker of Morgan Stanley, expect the commercial trucking industry to eventually transform to all electric vehicles. Shanker has urged investors to consider electric as well as self-driving trucking as a good investment possibility. Shanker says the changeover could begin to occur as early as 2020.
In a nutshell, people like Shanker have decided the standards will not be met without a conversion to all-electric (and eventually autonomous) trucking.
Related: DRIVERLESS TRUCKING – IT'S COMING
Companies In The Mix
One of the main self-announced players in both electric trucks and autonomous trucking is Tesla Motors Inc. (NASDAQ:TSLAC). Tesla CEO Elon Musk said in July that the company was in the process of designing a large truck, a pickup truck and a bus.
Another company is Volvo which has deployed an overhead tram-like charging system in Sweden. Volvo has also been testing short-haul battery electric trucks and two versions of semi-autonomous systems. Others include Daimler and Nikola, a startup with visions of an electric trucking future.
In the self-driving or autonomous realm, Alphabet Inc. (NASDAQ:GOOGC), is surreptitiously working on a system that would allow existing 18 wheelers, including electric trucks once they become available, to drive themselves.