Issue link: https://jocdigital.uberflip.com/i/957477
4 The Journal of Commerce | April 2 2018 www.joc.com William B. Cassidy ELECTRIC TRUCKS ARE getting a fresh jolt from the hype surround- ing the premier of the Tesla Semi, the Nikola One, and other vehicles designed for highway and local distribution. UPS increased the volt- age by partnering with Workhorse Group to test an electric van that someday could replace thousands of familiar brown package cars in its delivery fleet. "Electric vehicle technology is rapidly improving with battery, charging, and smart grid advances that allow us to specify our delivery vehicles to eliminate emissions, noise. and dependence on diesel and gasoline," said Carlton Rose, presi- dent of global fleet maintenance and engineering for UPS, which already operates hundreds of electric trucks and hybrids. Shippers, distributors, and trucking companies are eager to realize potential environmental and economic benefits, especially as the cost of diesel fuel rises above $3 a gallon on average nationwide — and, as of Feb. 26, 60 cents higher in California. Higher fuel prices, improved technology, and futuristic designs, are propelling interest in electric vehicles to heights not seen in a century. "The more scientific motor trucking becomes, the more Electrics will be used. The superi- ority of the Electric for city work is already appreciated by the more experienced users of motor vehi- cles." Wait — that's not a quote from UPS, but from General Vehicle Co., a pioneer electric truck manufacturer. In the early years of the "horseless age," electric trucks vied with gaso- line models to replace the horse and wagon. For a time, it looked as if the "Electric" might win. Read GVC's pitch from a 1916 advertisement in The Traffic World magazine: "In numbers, the Electric is just beginning to make itself felt, but in proving certain economic laws, it has already made history … Experienced motor truck users have ceased to buy motor trucks on price alone. Honestly now, did you ever seriously set out to learn why an electric truck is different from a gasoline truck for city work? Another question: How big a premium in operating costs are you willing to pay for your prejudice or indifference to efficient delivery in the city?" Skip forward to 2018 and the electric truck is no longer just his- tory. From 2009 through 2016, sales of plug-in cars and light vans, not heavy vehicles or hybrids, topped a cumulative 2 million units world- wide, with China, Europe, and the US the three major markets, according to the International Energy Agency's Global EV Outlook 2017. The energy and automotive supply chain infrastructure needed to support EVs is expanding rapidly to meet demand. Importantly, the electric vehicle is becoming more affordable, and economies of scale will make it even cheaper as production ramps up. UPS expects the operating cost of the Workhorse truck to be less than a similarly equipped gas or diesel vehicle. Lower operating costs on vehicles such as the Workhorse van or Tesla tractor can reduce initial sticker shock. In its Reinventing the Wheel research initiative last year, IHS Markit, parent company of The Journal of Commerce, predicted electric vehi- cles will account for more than 30 percent of new cars sold in key automotive markets by 2040, up from just 1 percent in 2016. A key tipping point will be battery pack costs, which are expected to decline to a price point in the 2030s that will make EVs cost-competitive with internal combustion engine vehicles. With increasing need for low- noise, zero-emission distribution options in the Amazon era, the second age of the electric truck may arrive even sooner, especially in local distribution. Hybrids are already en route at companies such as A. Duie Pyle, a northeastern regional less- than-truckload carrier. The company uses a fleet of hybrid electrics from Hino to make pickups and deliveries from its New York City terminal in the Bronx. "Because of the (densely con- gested) network in New York, they work very well there," Randy Swart, chief operating officer, said in Janu- ary. "When you're using the brakes, you're regenerating." Having a "green vehicle" placard on the side of the truck is a bonus in the big city. Swart said. "It helps you fit in the community just a bit bet- ter," he said. "You don't want people wishing you weren't there. As we grow our fleet, we'll be looking to continue growing it with that type of equipment." JOC email: bill.cassidy@ihsmarkit.com twitter: @wbcassidy_joc Trucking's second 'electric era' The Journal of Commerce (USPS 279 – 060), ISSN 1530-7557, April 2, 2018, Volume 19, Issue No. 7. The Journal of Commerce is published bi-weekly except the last week in December (printed 25 times per year) by JOC Group Inc., 450 West 33rd St., 5th Floor, New York, N.Y. 10001. Subscription price: $595 a year. Periodicals postage paid at New York, N.Y., and additional mailing offices. © All rights reserved. No portion of this publication may be copied or reprinted without written permission from the publisher. POSTMASTER: Please send address changes to The Journal of Commerce, Subscription Services Department, 450 West 33rd St., 5th Floor, New York, N.Y. 10001. Letter From the Editor Electric vehicles are becoming more affordable, and economies of scale will make them even cheaper as production ramps up.