North America accelerates widespread adoption of electric medium and heavy-duty vehicle (MHD) fleets

Date: Tuesday December 13, 2022

North American jurisdictions have launched electric MHD fleets action plan

Nineteen jurisdictions* in the United States and Canada have signed on to the multi-state medium and heavy-duty zero-emission vehicle action plan, committing to strive for at least 30 percent of new electric medium and heavy-duty (MHD**) zero-emission vehicle (ZEV) sales by 2030, and 100 percent of electric MHD on-road vehicles–including large pickup trucks and vans, delivery trucks, school and transit buses, and long-haul delivery trucks–sales by 2050.

The action plan concentrates on the electrification of transit buses, school buses, and commercial fleets. It aims to reflect the voices of different communities and take action to reduce air pollution, considering that different communities are adversely affected by air pollution, such as the communities proximate to sources of GHG emission and the communities that bear a disproportionate share of the air pollution.

Why electrification of MHD vehicles is crucial?

Decarbonisation of MHD trucks and buses is critical because they account for only 4% of all on-road vehicles in the US, but more than a quarter of transportation greenhouse emissions.

MHD vehicles are a significant source of smog-forming pollutants and particulate matter that are harmful to public health, according to the U.S. Environmental Protection Agency, and are the second largest source of transportation sector GHG emissions in the United States (28.2%) after passenger cars and trucks.

The delivery industry presents the greatest potential for electrification at the earliest opportunity, with numerous express companies, including Amazon, DHL, and UPS, being early adopters of electrified vans. Large corporate fleets have also been largely responsible for the initial momentum in commercial MHD fleet electrification. Corporate environmental pledges and the aim to generate operational savings are the main drivers behind these early adopters’ investments.

Market barriers to MHD trucks and buses electrification

The process of electrification is, however, hindered by several market barriers, such as:

  • Higher up-front purchase price of MHD zero-emission vehicles; for example, an electric class 8 truck without charging infrastructure costs $300,000 or more, compared to around $110,000 for a diesel truck
  • Commercial electricity rates are not designed specifically for electric heavy vehicle charging; MHD vehicles required higher-power charging must pay a more expensive bill that includes energy charges as well as demand charges for the maximum power used during a billing cycle
  • Need to deploy depot, public, and highway corridor charging infrastructure to serve commercial fleets with a variety of charging needs, such as some MHD fleets with larger batteries, which will necessitate much higher-powered DC fast charging infrastructure
  • Financing options
  • Knowledge of operators and awareness among potential adopters

Benefits of MHD trucks and buses electrification

  • Widespread GHG reductions; the International Council on Clean Transportation (ICCT) estimates that 100% of MHD ZEV sales in 2050 would reduce CO2 emissions by 73% below the 2020 level
  • Economic advantages with lower fuel and maintenance fees, as well as lower taxes; A study of Lawrence Berkeley National Laboratory showed that a class 8 long-haul battery electric truck has a 13% lower TCO per mile than a diesel counterpart
  • Health benefits for drivers and communities

What to do to facilitate implementation of the electric MHD fleets action plan?

Fleet operators’ actions

The way out for fleet operators is a mature understanding and knowledge of electrified vehicle management and total cost of ownership structure, as well as the ability to recognise the importance of electrification for long-term sustainability.

Given the time required to recharge the trucks, time management becomes critical. To reduce downtime and optimise the recharging period, fleet management with telematics systems must be integrated into each route for fleet operators.

OEMs’ actions

OEMs have taken two different approaches to the path of truck electrification. The first is the launch and expansion of battery-powered electric trucks, most notably the Tesla Semi truck.

Several automakers, on the other hand, have pushed forward plans to develop and advance their fuel cell electric vehicles (FCEV) technology, which converts hydrogen gas into electricity. Such a conversion could keep traditional internal combustion engines running in a carbon-free world while avoiding a robust abandonment of traditional technology. It is an alternative strategy used by OEMs to adapt to the zero-emissions market. Hyundai, for example, has announced plans to offer hydrogen fuel cell versions for all its commercial vehicles, including trucks, vans, and buses, by 2028.

Furthermore, some OEMs believe that hydrogen technology is better suited for high-mileage transit and heavy-duty long-haul trucking because hydrogen fuel tanks can be refilled as quickly as diesel tanks. For example, General Motors collaborated with Navistar and hydrogen provider OneH2 to develop a zero-emission long-haul truck system across the United States.

Energy use remains a contentious issue, with automakers still determining which technologies best suit their development strategy and national policies having a strong influence on energy adoption, but the goal of electrification is certain.

Telematics Service Providers’ (TSP) actions

Fleet operators who have begun to incorporate electric vehicles into their fleets are finding it challenging. Since the management and total cost of ownership profiles of an electrified vehicle are completely different from those of a vehicle powered by an internal combustion engine, there is an increasing demand for telematics providers to support fleet managers in the electrification transition.

To better accommodate this transition, OEMs and telematics providers formed alliances or merged. In 2021, Ford acquired Electriphi, an SaaS solution provider, to expand the capabilities of Ford Pro, its commercial fleet telematics system. Ford will be able to use Electriphi to monitor the charging status of each vehicle in the fleet and optimize charging schedules, avoid demand charges, and peak rates, which will improve Ford Pro’s market competitiveness.

TSPs themselves are also supporting the EV transition through R&D and collaboration:

  • Verizon Connect has started to include EV features in its platform Reveal and partnered with Sawatch Labs to help fleets with more than 10 vehicles plan their EV strategies
  • Geotab has launched a new Fleet Electrification knowledge centre, a web resource hub where fleet managers can learn about the journey to electrification, the benefits of EV adoption, and key opportunities for EV conversion
  • Samsara partners with EVgo to help accelerate light, medium, and heavy-duty fleets’ transition to electric vehicles

State actions

Firstly, what needs to be deployed and prioritized at the national level to help drive zero emissions is the development and expansion of community air monitoring programs to better capture and address air pollution “hot spots”. Secondly, policies for electric vehicle charging infrastructure investment and deployment should be refined; and then calls for a reduction in diesel-powered vehicle use as the market transitions to ZEVs.

Incentives and organisations

The Bipartisan Infrastructure Law, which was signed into law on November 15, 2021, provides critical funding for states to accelerate MHD vehicle electrification. The BIL funds more than $15 billion in MHD vehicle electrification-eligible investments, including $250 million for projects that reduce truck emissions as port facilities; $5 billion for clean school bus purchases; and more than $10 billion for clean transit buses, refuelling infrastructure, and bus facility upgrades.

The California Air Resources Board (CARB) Advanced Clean Trucks regulation requires about 60 percent of new medium- and heavy-duty trucks sold in the state to be zero-emission vehicles by 2035. The rule is America’s first electric vehicle standard for trucks, and it is expected to create a market for up to 500,000 electric trucks by 2040. It also introduced incentives and support programs to help fleet operators achieve their goals.

  • Clean Truck and Bus Vouchers, for the purchase of Class 2b through 8 zero-emission trucks and buses, including transit, school, and shuttle buses. Zero-emission technologies include both battery electric and fuel cell.
  • Truck Loan Assistance Program, to help small-business fleet owners affected by CARB’s In-Use Truck and Buses Regulation to secure financing for upgrading their fleets with newer trucks.

Moreover, organisations such as CLEAResult, New York State Electric & Gas (NYSEG), and Rochester Gas and Electric (RG&E) have partnered to lead the fleet electrification management pilot program, which aims to assist companies in developing electrification strategies and targets to electrify 285 fleet vehicles during the final workshop.

To learn more about the industry trends and market forecasts for commercial vehicle telematics, review our Commercial Fleet Telematics Global Study. PTOLEMUS’ newly released Fleet Electrification Global Study goes into greater detail on truck/fleet electrification.

* The participating jurisdictions include the states of California, Colorado, Connecticut, Hawaii, Maine, Maryland, Massachusetts, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington, the District of Columbia, and the province of Quebec.

**MHD, refers to vehicles with a gross vehicle weight rating GVWR equal to and exceeding 3.86 tonnes.