March 2018 The Roemer Report

March 2018: Elon Musk Turns Up The Juice With Electric Class-8

I don’t think there was a person on earth that wasn’t impressed by Elon Musk’s space shot the first week in February. For those raised during the space age, he managed to accomplish what has only been imagined in science fiction; that is until now—the vertical landing of an airborne rocket.

Elon and his engineer’s displayed the ultimate technical hat-trick sticking the landings of not one, but three SpaceX boosters (including planting one on a remote floating landing pad) and the feat is historic in many ways and puts some real gravitas behind his reputation as a visionary technologist, rather than his other public persona, that of a crony technocrat selling rubes the miracle cure of E-mobility.

Perhaps he’s just misunderstood, not unlike the early genius of electricity R&D, Nikola Tesla, the namesake of Elon’s electric automotive manufacturing concern Tesla Motors. Last November Elon brought his circus to town and did it using his own trucks, specifically an all-electric Class-8 truck dubbed the Nikola One.

Boldly announcing the economic suicide of fleet operators who do not assimilate to the Borg of electricity-powered freight-hauling efficiency, Elon projects fleets fueling with diesel will be soon be in for a real shock trying to compete, operating-cost wise with all-electric truck fleets.

Let’s Look At The Numbers

All puns aside, the evolution of electro-motive power technology and the recent introduction of market-ready commercial, heavy-duty Class 7 and 8 electric powered semi platforms is offering a clear demonstration that the driveline, storage and controlling technologies are all mature enough and integratable enough (at a price reasonable enough) to put together a road-ready electric powered truck and slap a warranty on it. From a technical standpoint one of the most appealing aspects of electric power is the near instant access to torque and the fattest part of the power band—all of which are highly desirable when getting freight up to speed and keeping it moving.

Although Cummins beat Elon and Tesla to the light switch publicly introducing a commerce-ready electric truck platform last August, the diesel maker opted to bring out a Class 7 platform with a 100-mile range suitable for intermediate and intermodal use including container yards and similar duty where operating cycles and range, as well as opportunities aren’t as much of factor.

In an article covering the launch of its AEOS platform (after one of the four-winged horses driving the chariot of the Sun God, Helios, says Cummins) Cummins' CEO Thomas Linebarger hedged his bets stating rather conservatively that the Class 7 truck cab represented a "stretch application" for a heavy-duty electric truck.

Linebarger was quoted saying “An electric powertrain does not yet make sense for a Class-8 semi tractor-trailer,” explaining that Cummins has developed a power platform that is supplemented by a high-efficiency diesel or compression ignited natural gas motor powering a generator, similar to a locomotive platform.

What got everybody’s juices flowing at Tesla’s November Class-8 introduction was how Elon made a point to address both the operating cost issue and the range issue with his offering, declaring a 500-mile range (extendible with fast charging technology) and a $1.26 per mile operating cost for his platform versus $1.51 for a comparable diesel-powered Class-8 semi. Not only that, he said he will offer his truck for a competitive price somewhere south of $200K and will be prepared to make 100,000 of them by 2019.

His confidence in the technology was further enumerated by the fact that he said his platform is capable of operating for a million miles without a breakdown and that, coupled with safety technologies, video and remote sensing and innovative central pilot station cab configuration, he’s designed and engineered the whole affair to be more attractive to fleet operators, regulators and drivers.

Real Potential?

Certainly an amount of showmanship is a necessity when selling technology and Elon Musk clearly is becoming a modern master at presenting the steak with lots of sizzle . Although his numbers may seem ambitious, there is evidence that his operating cost projections may be obtainable out there in the real world, right now, with electromotive truck technology.

One analyst for equities firm Jeffries was quoted in a article saying the cost to operate trucks like Tesla’s could be as much as 65% lower than diesel. An existing diesel-powered Class-8 gets about 5-6 miles per gallon at a cost of $2.7 per gallon, but the efficiency of an electric truck would be 144 kilowatt hours per 100 miles at an average cost of $0.12 per kilowatt-hour.

“Charging and potentially swapping are separate issues that would materially add to cost, while fast charging multiple 400 (kilowatt-hour) batteries would require mini-grid updates,” said Jeffries’ Phillippe Houchois. “Battery longevity could be the major hurdle given the current trucking business model.”

Houchois explains that when customers buy a truck (for $100,000 or more) purchasers normally pay about 50% of the price over three or more years and drive 500,000 miles during that period—knowing the truck manufacturer is guaranteeing the residual value because it has another half a million miles of service life. Houchois notes “At $80,000, and assuming 500,000 miles of usable life, the full cost of an electric truck would be the same per mile as a diesel truck. Assuming battery cost of $100 (per kilowatt-hour), the lifetime cost of an electric truck could be 30% lower than a diesel truck.”

According to a 2016 report, “North American On-Highway Commercial Vehicle Engine Outlook,” by ACT Research and Rhein Associates, associated battery/energy density costs are the “biggest barrier to greater adoption of electric vehicles …” The report found costs for electric commercial vehicle batteries need to decline about $80 per kilowatt-hour to about $105 per kilowatt-hour or by about half “to make the numbers work,” said Rhein Associates.

Now that there are viable platforms available from major manufacturers, commercial carriers can begin trials on fleets featuring electric trucks. With real-world experience will come better data on actual operating costs, and a better understanding of the overall viability of electric trucks as a primary platform for freight hauling operations.

But like any major technology advancement, there will be early adopters; then the rest will follow as the technology improves and lessons are gained from practical experience. Although Tesla favors high-efficiency batteries and fast charging to extend range, other manufacturers like Toyota looking toward hybrid technologies and alternative fuels like CNG, as well energy-dense hydrogen fuel cells to create super fuel-efficient clean-running vehicles. In fact, the Tesla 2 design incorporates that well-understood technology as an alternative.

The end of the reciprocating engine to power commercial vehicles is far from over. The energy density and mobility of diesel fuel compared to other fuel sources remains competitive because there are many parts of the world were a stable power grid is more a hope than a reality.

Electric Class-8 trucks may have real game and Cummin’s and Tesla’s entries demonstrate there are fewer barriers to entry both practically and in relation to operating costs. Certainly for fleet operators the appeal of being a little greener - sustainability wise - is alluring. When you throw in competitive operating costs and complexities associated with diesel fuel plus a better working environment for drivers, electric trucks have real potential to generate a lot of “green” for fleet operators in the not-too-distant future.