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E-mobility for truck OEMs: overcoming obstacles to take-up

Fredrik Almhöjd
26 May 2023

Truck OEMs are committed to electrification to reduce emissions, particularly Scope 3 emissions. Most OEMs have forged ahead with launching EVs, but this segment of their portfolio is not growing as fast as it needs to.

In this article, Fredrik Almhöjd recommends three actions commercial vehicle manufacturers can take now to start overcoming customer resistance to e-mobility, with an emphasis on charging and connected services.

In the earlier blog article, Fredrik gave an overview of automotive sustainability in the commercial vehicle space and explained why companies need to take a holistic view to achieve their CO2 targets and other environmental aims.

This time, however, we are going to focus on a specific contributor to automotive sustainability – e-mobility. This is one of the industry’s biggest trends and undoubtedly the most important single enabler of OEMs’ sustainability ambitions.

That’s because emissions arising from products sold and in use represent the biggest and most challenging element of truck OEMs’ total emissions. Switching sales from ICE trucks to EVs is crucial in reducing these downstream emissions, which fall within Scope 3 of the Science Based Targets initiative (SBTi).

We will be talking mainly about BEVs here, but most of the discussion applies equally to FCEVs.

The balance isn’t shifting fast enough towards e-mobility

Truck OEMs are pushing hard in this area – virtually all have already launched BEV trucks onto the market. And they all have ambitious plans to grow the proportion of their portfolio represented by BEVs. Volvo Trucks, for example, has set itself a target of 50% fully electric vehicles by 2030 and aims to reach net zero in its value chain by 2040. Similarly, Scania has estimated that 50% of its vehicle sales will be electric by the end of the decade. Other truck OEMs have similar ambitions.

However, many truck companies are finding the EV segment of their portfolio is not growing as fast as they need it to. This is mainly because their customers are strongly TCO-driven, and the TCO just isn’t attractive enough compared with ICE trucks. In addition, concerns remain about range limitations and insufficient charging infrastructure.

As well as jeopardizing net zero targets, slow take-up of electromobility creates a Catch-22 situation because, while cost is a barrier to take-up, high volumes are needed to drive costs down.

Truck OEMs have the power to accelerate EV take-up

Therefore truck OEMs urgently need to improve EV take-up. Here are three ways they can start doing so now.

1. Formulate a clear go-to-market strategy and organization

The go-to-market strategy is an important determinant of EV success, and the right internal organization is key. Although the process of selling EVs is longer and more complex than that for conventional trucks, my personal opinion is that EV sales should come within the traditional sales organization, which already knows the customers.

Of course, the sales organization needs to be motivated to promote EVs, which involves setting appropriate KPIs and targets. At the same time, salespeople need training and tools to equip them with the competencies to satisfy customers’ EV concerns. In addition, the salespeople need to know how to work with other stakeholders within the wider automotive ecosystem, such as power companies and providers of charging equipment, to create the right package for each customer.

The sales force also needs to be conversant with the arguments for EVs, both financial and environmental. In contrast with image-conscious private car users, truck customers are firmly focused on commercial realities, and will usually only buy an EV if they are convinced that it makes business sense. This won’t happen unless salespeople themselves are convinced of the case for EVs, and therefore education is key.

Major benefits of EVs

Many authorities consider EVs the #1 technology for the decarbonization of road transport. Aside from CO2 reduction, other benefits include noise reduction, which means that trucks can continue to operate at night, even in cities. This brings both general productivity benefits and specific advantages in areas such as waste removal and distribution.

Circular economy benefits include the possibility of giving truck batteries a second life in industries such as energy storage support and backup. Cutting waste like this brings financial as well as automotive sustainability benefits. In addition, EVs can store energy, potentially offsetting fluctuations in wind and solar power and hence facilitating growth in renewable energy use.

2. Put customers’ minds at rest via connected services and other tech tools

Truck OEMs should offer software tools and services that address customers’ questions, such as simulators for calculating a fleet’s battery and charging needs, and the implications for routing. We’ll discuss the important topic of automotive-connected services in more detail later in this blog series.

Ecosystem partners are likely to deliver many of the solutions required, and it’s vital to work out who will be responsible for what, as we discussed in an earlier article in this series, The commercial vehicle ecosystem – who will do what? Typically, services that access critical vehicle functions, as well as those relating to productivity and other top operational priorities, will be among those provided by the OEM itself. Still, many others can be left to third parties.

3. Develop an adequate charging infrastructure

Of course, customers will not experience true peace of mind until charging anxieties are satisfactorily addressed. For fleet managers, the risk that a truck will not be fully utilized because of charging issues can be a deal-breaker. Fortunately, this risk can be virtually eliminated using route planning and battery monitoring services in the context of adequate charging infrastructure.

To provide this infrastructure, OEMs need to collaborate with energy industry partners and major customers to agree on strategy and responsibilities; they may well decide to invest in the infrastructure themselves. Design complexities include deciding how to use public charging points versus those at the depot, and which types of chargers should be used where. Additional options for trucks include megawatt chargers, which deliver higher power at a higher cost.

It should be remembered that trucks can’t usually use existing infrastructure because of their need for bigger parking spaces and access routes, and for drawing higher levels of energy from the grid. Dedicated infrastructure for trucks is likely to be needed, therefore.

Truck OEMs can’t wait for the charging challenge to solve itself. Each company should undertake a proactive study of its customers’ charging requirements, evaluate potential business models for strategic fit, and then create an implementation roadmap for its chosen model.

European infrastructure requirements, and official plans to meet them

ACEA, the European Automobile Manufacturers’ Association, believes that trucks in the EU region will need 10,000‐15,000 higher power public and destination charging points by 2025, and 40,000‐50,000 by 2030. By this later date, ACEA says there should also be 40,000 lower-power public overnight chargers at truck parking areas.
Recent EU initiatives to address this need include the Alternative Fuel Infrastructure Regulation (AFIR), which requires governments to provide at least 3,600 kW of electric truck charging capacity every 60 km on primary motorways and 1,500 kW of truck charging capacity every 100 km on secondary motorways. The regulation also calls for charging hubs in every major city and charging stations in designated truck parking areas. 2030 is the deadline for all these requirements but there are also interim targets.
Although the regulation has been criticized for not going far or fast enough, it provides manufacturers with a useful basis for their infrastructure roadmaps.

Moving forward through concerted action

With the actions suggested above, OEMs should be able to significantly increase EV take-up in the short to medium term, accelerating progress toward automotive sustainability goals. As ever, though, they can’t do it all on their own. They need help from a wider range of ecosystem partners, and, just as importantly, from governments, which should use fiscal and other measures to make the TCO of EVs more favourable relative to ICE vehicles so that cost-conscious truck buyers become willing to embrace e-mobility. We’ll revisit these topics in later articles, and will also take a deeper dive into the two key e-mobility enablers: connected services and charging.

About Author

Fredrik Almhöjd

Director, Capgemini Invent
Fredrik Almhöjd is Capgemini’s Go-to-Market Lead for Commercial Vehicles in the Nordics, with 25+ years of sector experience plus extensive knowhow in Sales & Marketing and Customer Services transformation.