Industry Issues

Uncovering the Massive Costs of the Electric Transition

Uncovering the Massive Costs of the Electric Transition

An American transport advocacy group is uncovering the massive costs of the electric transition in the country after the recent release of a study.

The Clean Freight Coalition has estimated that it will take a whopping $1 trillion USD to transition the USA’s trucking industry to a full battery-electric model.

Made up of a number of industry experts, the findings of the study were presented by American Trucking Association President and CEO Chris Spear, American Truck Dealers President Laura Perrotta, American Bus Association President and CEO Peter Pantuso, National Association of Truck Stop Owners President and CEO Lisa Mullings, National Tank Truck Carriers President and CEO Ryan Streblow, National Motor Freight Traffic Association Executive Director Debbie Sparks and Truckload Carriers Association President Jim Ward alongside CFC Executive Director Jim Mullen.

Consulting group Roland Berger conducted the report, exposing a “massive investment gap” according to Mullen.

The key findings in the report identified where the major cost blowouts would come from. It stated that in order to prepare for electrification, the commercial vehicle industry in the USA would have to invest $620 billion USD in charging infrastructure, in addition to $370 billion for utilities companies to upgrade their grid networks.

In addition to this, the $1 trillion estimates does not include the cost on businesses for new battery-electric trucks, leaving an even greater overhead on transport companies.

“What we are talking about here is a $1 trillion unfunded mandate being levied on the U.S.trucking industry,” Spear says.

“In six to 10 years, the country will have fewer trucks on hand to move the amount of freight we do today, if we do not address this issue. And that reduction in trucks will be reflected in prices and the availability of products on store shelves.

“This is a huge, complex, challenge. Our industry needs both time and money to accomplish this, because this is going to be really difficult to do. We are not an industry dragging its heels. But the assumption that the trucking industry can do this alone and for free is not realistic. That is not going to happen.”

Mullen says that the findings of the report should encourage the USA government to address legislation changes necessary to address the cost of infrastructure as soon as possible.

While it may be possible to electrify medium-duty vehicles sooner rather than later without inordinate cost, the heavy-duty sector is going to take significantly more work.

“Electrification means focusing on the vehicle segments that are easier first,” says Wilfried Aulbur, senior partner at Roland Berger.

“It means that we have to look at how fleets operate and potentially adjust; it means that we need better cooperation and planning across industries and governments; and it requires an openness to alternative technology paths to decarbonising the heavy-duty segment.

“It also is clear that an industry with a yearly turnover of about $800 billion and a profit margin around 5 per cent cannot invest $620 billion without financial support or a significant increase in freight rates.”

 

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