The index: electric truck reality

There is a future for electric commercial vehicles, finds BloombergNEF stats.

Electric commercial vehicles are set to take off in the 2020s, albeit some way behind the passenger vehicle market. By 2040, however, they will account for 56% of the light commercial vehicle sales in Europe, the US and China, according to the BloombergNEF (BNEF) Electric Vehicle Outlook 2019. Medium weight trucks move more slowly, with 31% set to be electric by 2040, and heavy trucks even slower at 19%.

As government policymakers push towards lower-carbon transport, battery prices continue to fall and vehicle manufacturers increase their commitment to electrification, interest in electric vehicles (EVs) is rising as more convincing models hit the market, says the report. Indeed, during the past year, the world has seen an increase of 2 million overall EU unit sales, and there are now more than 5 million EVs on the road across the world. 

The report predicts electric commercial fleets will become more efficient in the next 20 years, with fuel economy increasing by 27% due to new legislation and technologies. Digitisation, increased data on fleet operations and optimised routes will also contribute to improving efficiency, it says.

With a steady march of urbanisation and cities imposing restrictions on heavy vehicles, the economics of reduced-weight electric trucks will increase the share of small trucks and vans in road freight, doubling from 2020 to 2040, predicts the report.

A total of 14 countries have now announced targets for phasing out sales of new internal combustion engine (ICE) vehicles, mostly by 2030 or 2040. This is growing quickly, with targets announced in 2018 by Denmark, Norway and Italy, among others. But charging infrastructure for EVs “remains a challenge”, says the report. 

Yet if EV charging barriers are lowered through government policy and technological innovation, adoption could be even faster than expected in the 2030s, according to the report. “Several Chinese cities have passed rules forcing the electrification of some commercial vehicles and such policies can force stronger uptake than our forecast,” says Colin McKerracher, head of advanced transport, BNEF. 

Indeed, recently announced projects by companies such as BP Chargemaster and Ionity are expected to see hundreds of charging points installed at BP and Shell forecourts across the UK and Europe over the next few years.

Recalculated forecasts

The oil, electricity and battery industries will be affected by the rise of EVs, says BNEF, which last year estimated the impact on road fuel demand at 7.3 million fewer barrels per day by 2040.

Now, however, it has nearly doubled this estimate to 13.7 million fewer barrels per day, partly because of new forecasts for electrification of the commercial vehicle sector and partly because ICE fuel efficiency is expected to proceed more slowly than previously thought. “This means that every EV displaces a conventional car that would have used a greater quantity of road fuel,” explains McKerracher.

EVs will add 6.8% to global electricity consumption in 2040, says the report, and will drive a surge in lithium-ion battery demand from 151 gigawatt hours (GWh) in 2019 to 1,748GWh in 2030. “New mining capacity for all battery materials will need to come online to avoid causing a supply crunch,” warns the report.

US EV supply chain plans

This issue is currently on the radar in the US Senate, where the development of a national EV supply chain policy in America has recently received bipartisan support. The legislation is designed to challenge China’s dominance in metals production and battery manufacturing, and would require a tally of metal reserves in the US, an inventory that some senators believe is essential, since present data is largely estimated, according to USGS spokesman Alex Demas.

Despite BNEF’s predicted rapid uptake of EVs across many different vehicle segments, direct CO2 emissions from road transport will continue to rise – mainly due to a growing number of ICE vehicles worldwide – until peaking in 2030. By 2040, the report predicts these emissions will have returned to similar levels to 2018, before beginning a downward trajectory.

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