The path to alternative technologies displacing diesel in long-haul tractors remains a very long slog, according to a recent report by S&P Global Platts Analytics.
A problem for alternative technologies – the diesel truck is simply too efficient. "Our analysis of contemporary long-haul semis shows that across battery electric vehicles, fuel cell electric vehicles and compressed natural gas [CNG] drivetrains, none were economically competitive on average with the status quo diesel truck," the report said in its conclusion.
And it's not as if diesel engines are standing still. As noted by the report's authors, Zane McDonald and Roman Kramarchuk, diesel engines have a 30 percent efficiency improvement capability using existing technologies. That potential move away from the status quo – which for the most part has never truly been static but is always evolving – "further complicat(es) any prospects of unseating diesel as the primary energy source for long-haul semis in the near- to medium-term."
That doesn't mean that there aren't strengths in other technologies. The report focuses heavily on the advantages and disadvantages for battery electric vehicles (BEVs) and fuel cell electric vehicles (FCEV) in the long-haul market. But as the onion is peeled away, the report finds that significant penetration by these technologies is going to need enormous technological gains alongside the improvements in diesel engines, or will need a government boost through programs like the California Low Carbon Fuel Standard, which gives low-carbon technologies like BEVs an advantage.
What the Platts report does find is that there are more immediate opportunities for alternative fuels in the regional haul market, which it defines as less than 200 miles per day with a truck averaging 29,000 miles per year. The lower range of these vehicles means that regional haul trucks can use smaller battery packs, a major cost source in long-haul tractors because of their weight.
Platts lays out a mathematical case that the smaller battery in a regional vehicle reduces the "purchase premium" – another term for higher price – of a regional truck to $22,500 from $63,000 for a long-haul tractor. Throw in the savings on diesel and maintenance and "during typical regional haul operation, a 2030 BEV semi will break even with a high-efficiency diesel in less than two years," the Platts report said. "Past this point, there is an economic advantage to be had in reduced fuel and maintenance expenditure."
But for long-haul trucking, that $63,000 price premium on the cost of a BEV is too large for the fuel and maintenance cost savings to compensate. "Reduced operational costs to improve the competitiveness of the drivetrain with increasing cumulative mileage, it is not enough for the average BEV to be cost-competitive with an anticipated high-efficiency diesel semi," the report said.
The numbers on the weight of batteries in BEVs are stark. The unit needed to service the average long-haul truck can weigh more than five tons. The report says existing diesel trucks can approach a gross vehicle weight of 33,000 pounds, so a five-ton battery would be 10,000 pounds (though offset in part by the loss of the weight of the internal combustion engine).
Such a battery pack would "reduc(e) the overall freight that a truck can carry, reducing revenue per mile," the report says. "Furthermore, batteries are relatively expensive, increasing the cost of a long-haul semi by over 80 percent at current technologies."
For other technologies being utilized in the long-haul segments, the figures are stark on how much two key costs would need to decline to make them competitive with diesel. Fuel cell costs would need to decline to a level near $90/kW from nearly $250/kW today, and the cost of hydrogen would need to be down toward $4.40/kg. The price today is $16/kg.
With Nikola Motors going all in on fuel cell tractors, it's clear that it there is one thing it has no power over – the price of hydrogen. "FCEV trucks have, by a minimum of 50 percent, the highest 2018 operational costs of the drivetrains considered," the report said. "The primary driver of this is the high cost of hydrogen fuel."
But the report's authors are optimistic there can be progress. "Similar to cost declines forecasted in fuel cell manufacturing, we believe that economies of scale and production learning have the potential to provide steep cost declines in retail (hydrogen)." The authors were confident enough in the Department of Energy target of $4/kg that they set it as the "national minimum" in their study.
If a five-year truck ownership is assumed, a fuel-cell powered 2030 tractor "would be cost-competitive with a diesel semi if H2 could be delivered at $4.40/kg H2," the report says. "Cost reductions in H2 production are dependent on both low-cost feedstocks and higher efficiency transportation of H2 to the dispensing site."
The role of governments cannot be overlooked in the Platts forecast. California and three Asian countries have committed to putting fuel cell fleets on the road in their respective regions, and the authors expect that will result in economies of scale. Starting with the $250/kW price for a current fuel cell system, the report says that given these commitments, if fulfilled, "fuel cell stacks could achieve up to a 68 percent cost decline from current levels, hitting $87/kW by 2030."
The California LCFS is cited as another government boost to alternative technologies for powering trucks. The LCFS is complicated, but under its most basic definition, it gives every type of energy source what amounts to a carbon-intensity rating. Use of those sources can generate credits than can be sold and can therefore be viewed as part of the road to competitiveness for alternate technologies with diesel engines.
According to Platts' calculations, BEVs produce a particularly high ranking under the LCFS because conversion of energy into actual propulsion is high in BEVs. But CNG, for example, performs less efficiently than diesel. And even within the values for individual fuels, the "pathway" of getting there can vary and provide greater LCFS credits for hydrogen produced under one pathway than a different one.
A recent blog on the Platts report can be found here.
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