Rethinking the Feasibility of Electric Trucking

Change is hard. Always. Worse still is having change forced on you, especially when that change threatens to destabilize a system you have come to know and depend upon.?

Take the pressure to electrify road freight by switching from diesel to electric semi trucks. Making that switch as a 1:1 swap, diesel for electric, poses enormous challenges. The available charging infrastructure pales in comparison to the availability of diesel. Electric semis have less towing capacity thanks to their heavy banks of batteries and are confined to a shorter distance between charges. They are also expensive, and few companies can afford extra capital expenditures.

Does that mean electrified road freight isn’t realistic? No. It just means we need to think about it differently.

In this week’s episode of Art of Supply, I speak with Ian Rust, Founder and CEO at Revoy. He and his team are taking an entirely different approach to electrifying road freight, and using a completely new business model to do it.

To read more about how it works and what Ian thinks is a realistic pace of change, read Freight Electrification as a Service on Art of Procurement or scroll down to watch a video showing their equipment.

The Complexity of Unintentional Scope Creep

When I asked Ian about the most common pushback he hears in relation to electric semis, he told me that people see it as “too complicated.” Yes, it is expensive, but “complication is what drives that expense.”

While a focus on “complexity” will signal different things to different people, Ian starts by pointing to everything beyond the truck that has to change before new equipment can go into service. “We're still really at the beginning of our journey as a country for charging availability for passenger vehicles. The power requirements for a heavy trucker are ten or one hundred fold,” he said. “Those types of chargers just don't really exist out there on the road.”

In reality, that means switching to an electric semi requires a fleet operator or an owner to figure out the charging infrastructure on their own.

“What trucking fleets are having to do is get into things that they've never been asked to do before,” Ian pointed out. “And I frankly don't think it's fair to ask them to put down millions, if not tens of millions, to build a bunch of chargers or to figure out transformer availability. They want to move loads. That's what they're ultimately getting paid to do.”?

Not only do drivers and operators need to figure out access to changing stations, they have to absorb the variable energy expense, depending on the location and ownership of the charger. Maintenance costs are another variable that have to be addressed. Most electric semi models are relatively new, and the full long term maintenance cycle hasn’t yet been established.?

Then there is the battery itself. “One of the things I'm particularly concerned about is the overall cycle life of EV batteries as they're currently being implemented in the space,” Ian shared. "These things will only get about 400,000 miles with the passenger EV tech stack translated over. That's a mismatch in terms of the end use case of the vehicles.”?

While passenger EVs have largely gained traction in the luxury segment of the automotive market, semis won’t have that option. They need to be effective workhorses on day one. That creates an uphill battle for anyone trying to swap out their diesel truck, which is expected to last a million miles, with something more expensive that will last half as long.

“All those things can be managed, but that's where all the complication comes in. You get stuck in this quagmire of fixing the electric truck, which is being thrust onto the end user.”

Dispassionate Data Drives Better Decisions

In the consumer space, drivers who switch to EVs are motivated by all kinds of factors. Some are interested in the novelty of a new kind of vehicle, while others are dedicated environmentalists. And then there are the attention seekers, like the guy I often see loading groceries into his Tesla with gullwing doors at the supermarket down the street.?

In many cases, consumers are willing to pay more for an EV, or deal with the additional effort required to keep the car charged, because of their individual motivating factor.?

For electrified road freight to catch on at scale, the decision making basis has to be much more concrete. It has to be fully data driven. When I asked Ian about the data points and metrics used to justify the transition to electric semis, he started where most people do: with the length of the haul.

“The biggest piece of data on routes that people look at is range, or the length of the haul, because that's seen as one of the core limitations of battery electric vehicles,” he said. “It's true. A full electric semi will get maybe as high as 300 - 400 miles and a diesel tractor trailer fully fueled up can get 1,300 - 1,500 miles.”?

When we think about what that means for the driver, the stops and downtime associated with frequent recharges quickly become an issue. This is why many people have focused on short regional haul, lighter loads, or drayage when it comes to electric semis, but Ian thinks this line of thought is a “bit of a dead end.”

Which brings us to yet another area where Ian challenged me to think differently.

“Trucking is not a monolith, it is so diverse,” he pointed out. “There are many, many ways that trucks get used. It is really a general purpose piece of equipment and so it can be used for a lot of different things.”?

Taking on Common Misconceptions

There is a misconception that big rigs always haul 80,000 pounds, leaving no opportunity for electric power. The reality is that, “The vast majority of tractor trailers are not weighing out. I believe 90 percent are below 75,000 pounds. It's a crazy number.”?

Revoy’s equipment, which sits between the tractor and the trailer, adds 22,000 pounds. According to Ian, that only reduces potential payloads by 30 or 35 percent, and it does so without permanently modifying the equipment. If a load is weighed and it is too heavy for electric power, it can be hooked back up to the diesel equipment and head down the road.?

Ian estimates that scenario will play out “35 percent of the time. The other 65 percent of the time, great! You can reduce your fuel bill by 90 - 95 percent.” Having that flexibility and optionality is what starts to make the transition to electric semis seem workable - even in the real world.??

“We don't need to have a one size fits all approach,” Ian pointed out. “That's what makes the electric semi so hard is that we're trying to make it work for every single load. You're running into this really hard engineering and science problem of how do we get more energy into batteries so that we don't have to have them weigh so much to get a reasonable range, whereas with this modular approach we've come up with, you no longer need to worry about that.”?

Another common misconception has to do with the average length of truck routes. According to Ian, many people believe over 80 percent of trucking is done on routes 250 miles or less. Not quite, he says.

“This is actually a very skewed way to look at that data,” Ian told me. “That 84 percent is by trip count. What that means is that one, 10 mile trip counts the same as one, one thousand mile trip. ‘Trips’ is a weird denominator. When you actually look at it by the number of miles, it's the opposite.”

In reality, the trucking industry is dominated by long haul. “Ask anyone in trucking; long haul is the most important thing, and so we really need to be focusing on long haul right now.” Not only does long haul represent the lion’s share of freight mileage, but electricity rates in rural areas are much lower than what is typically seen in densely populated urban areas.

Revoy focuses exclusively on long haul, leaving drayage and short or regional hauls to others. Drivers can quickly swap out the electric power source and replace it with another in about two minutes (watch the embedded video above to see how it works).?

The data we reference and share in support of (or in objection to) change is important, and it is nearly always possible to come up with a data point to support any motivation.

The question we should be asking ourselves with the transition from diesel to electric road freight is whether each data point is representative. Is it forward looking or is it stuck in the past? Starting to think differently about the data, and searching for business models that support change affordably and at scale, is the first step in a journey that - as Ian points out - is likely to be a ‘long haul’ but one that is worth taking.

Explore other editions of the Art of Supply newsletter here.?