1 00:00:00,680 --> 00:00:03,560 Speaker 1: This is Dana Perkins and you're listening to Switched on 2 00:00:03,920 --> 00:00:07,360 Speaker 1: the podcast brought to you by BNF. More than eighty 3 00:00:07,400 --> 00:00:10,400 Speaker 1: five million medium and heavy duty trucks were on the 4 00:00:10,480 --> 00:00:13,280 Speaker 1: road by the end of twenty twenty four, accounting for 5 00:00:13,600 --> 00:00:17,119 Speaker 1: just under ten percent of global emissions. By twenty fifty, 6 00:00:17,320 --> 00:00:20,520 Speaker 1: the commercial vehicle fleet of vans, trucks, and buses is 7 00:00:20,560 --> 00:00:23,280 Speaker 1: set to surpass three hundred and sixty million. 8 00:00:23,680 --> 00:00:24,040 Speaker 2: Growing. 9 00:00:24,079 --> 00:00:28,280 Speaker 1: This fleet will likely grow emissions unless zero missions vehicles 10 00:00:28,320 --> 00:00:31,800 Speaker 1: account for a greater proportion. About forty percent of global 11 00:00:31,840 --> 00:00:34,199 Speaker 1: truck fleets today can be found on the roads of 12 00:00:34,240 --> 00:00:36,960 Speaker 1: the US, China, and Europe. But when it comes to 13 00:00:37,040 --> 00:00:40,559 Speaker 1: zero missions vehicles, China is leading the way with sales 14 00:00:40,600 --> 00:00:44,880 Speaker 1: of electric medium and heavy duty trucks soaring. Meanwhile, in Europe, 15 00:00:45,040 --> 00:00:48,120 Speaker 1: at the local level, we see some European cities introducing 16 00:00:48,200 --> 00:00:51,960 Speaker 1: zero mission zones, which thereby pushes fleets to upgrade, creating 17 00:00:52,040 --> 00:00:55,920 Speaker 1: a more lumpy regional adoption story. Full battery electric models 18 00:00:55,960 --> 00:00:59,040 Speaker 1: are the front runners, owing to lower operating costs and 19 00:00:59,080 --> 00:01:02,040 Speaker 1: supportive policy. This is in the face of otherwise high 20 00:01:02,080 --> 00:01:06,080 Speaker 1: upfront costs, uneven charging infrastructure, and questions around whether these 21 00:01:06,120 --> 00:01:08,080 Speaker 1: types of vehicles are really viable for. 22 00:01:08,000 --> 00:01:08,800 Speaker 2: Long haul trucking. 23 00:01:09,160 --> 00:01:12,640 Speaker 1: On today's show, I'm joined by BNF's Head of Commercial Transport, 24 00:01:12,760 --> 00:01:17,280 Speaker 1: Nicholas Slopolos, alongside associate Mainy Yang, where they discuss some 25 00:01:17,319 --> 00:01:22,000 Speaker 1: of their team's recent research notes, including zero emission commercial Vehicles, 26 00:01:22,240 --> 00:01:27,800 Speaker 1: Accelerating the Transition and commercial vehicle decarbonization Monthly e Tractors. 27 00:01:28,160 --> 00:01:30,880 Speaker 1: B and EF clients can find these notes, along with 28 00:01:31,040 --> 00:01:34,360 Speaker 1: other clean transport research by heading to BNF go on 29 00:01:34,400 --> 00:01:37,520 Speaker 1: the Bloomberg Terminal or BNIF dot com. If you'd like 30 00:01:37,560 --> 00:01:40,360 Speaker 1: to learn more about how b and EF approaches strategy 31 00:01:40,400 --> 00:01:44,520 Speaker 1: research on the energy transition, including developments and commodity markets, 32 00:01:44,640 --> 00:01:48,920 Speaker 1: trends across different sectors, and cross cutting technologies shaping the future, 33 00:01:49,200 --> 00:01:52,280 Speaker 1: you can find more information at b and EF dot com. 34 00:01:52,400 --> 00:01:55,040 Speaker 1: The BNF Summit in San Francisco, taking place at the 35 00:01:55,120 --> 00:01:58,120 Speaker 1: end of January, will highlight some of the opportunities and 36 00:01:58,240 --> 00:02:02,920 Speaker 1: challenges presented by the ties transport, energy and technology transitions. 37 00:02:03,160 --> 00:02:05,760 Speaker 1: To find out more about this event and other events 38 00:02:05,800 --> 00:02:08,919 Speaker 1: taking place around the world, head to about dot bn 39 00:02:08,960 --> 00:02:13,120 Speaker 1: EF dot com Forward Slash events. Lastly, if you'd like 40 00:02:13,160 --> 00:02:15,200 Speaker 1: to speak to a member of our team about becoming 41 00:02:15,280 --> 00:02:18,720 Speaker 1: a client email US at Sales dot bn EF at 42 00:02:18,720 --> 00:02:22,280 Speaker 1: Bloomberg dot net. So let's explore the outlook for clean 43 00:02:22,320 --> 00:02:26,200 Speaker 1: trucking and how this industry is driving its own low 44 00:02:26,200 --> 00:02:27,079 Speaker 1: carbon transition. 45 00:02:37,639 --> 00:02:39,720 Speaker 2: NKO thanks for coming back on the show today. 46 00:02:39,960 --> 00:02:41,519 Speaker 3: Thank you, Dan, it's great to be here. 47 00:02:41,360 --> 00:02:42,840 Speaker 2: And Manie, great having you here. 48 00:02:43,320 --> 00:02:44,760 Speaker 4: Thanks Dana, I'm excited. 49 00:02:45,520 --> 00:02:50,040 Speaker 1: Let's start today's show with a discussion around how big 50 00:02:50,040 --> 00:02:53,160 Speaker 1: of a deal the global trucking industry is. And there's 51 00:02:53,200 --> 00:02:55,880 Speaker 1: a few different ways we can look at it. One 52 00:02:55,880 --> 00:02:58,919 Speaker 1: of them is how important is it and how big 53 00:02:59,000 --> 00:03:01,040 Speaker 1: is it in terms of global emissions. 54 00:03:01,639 --> 00:03:04,800 Speaker 3: So we're talking about maybe eight to ten percent of 55 00:03:04,880 --> 00:03:08,600 Speaker 3: global emissions or thereabouts. So the whole of transport, about 56 00:03:08,600 --> 00:03:12,480 Speaker 3: a quarter road transport is three quarters of that. Trucking 57 00:03:12,800 --> 00:03:14,760 Speaker 3: is a little bit less than half of it, So 58 00:03:14,840 --> 00:03:18,440 Speaker 3: we're rinding up at about eight nine percent of total emissions. 59 00:03:18,480 --> 00:03:20,799 Speaker 3: It depends on what we're talking about. I mean, there's 60 00:03:20,840 --> 00:03:23,919 Speaker 3: a huge variation behind that number where we're talking about 61 00:03:23,960 --> 00:03:26,760 Speaker 3: what we call light duty commercial vehicles like delivery vents 62 00:03:26,919 --> 00:03:30,120 Speaker 3: or heavier trucks, medium and heavy duty trucks and all that. 63 00:03:30,200 --> 00:03:33,240 Speaker 3: But we're talking about that range of global emissions. As 64 00:03:33,280 --> 00:03:36,480 Speaker 3: you said, it varies across countries. The interesting part there 65 00:03:36,560 --> 00:03:39,560 Speaker 3: is that that level of emissions is the result of 66 00:03:39,600 --> 00:03:42,640 Speaker 3: a relatively small number of vehicles on the road, And 67 00:03:42,760 --> 00:03:45,080 Speaker 3: we can go into some detail on that later on 68 00:03:45,120 --> 00:03:47,720 Speaker 3: why that is and what the implications of that are 69 00:03:47,840 --> 00:03:51,200 Speaker 3: in terms of reducing each emissions in terms of costs, 70 00:03:51,200 --> 00:03:54,760 Speaker 3: and who is adopting and where these new cleaner power 71 00:03:54,840 --> 00:03:55,920 Speaker 3: trains for trucks. 72 00:03:56,120 --> 00:03:59,640 Speaker 1: So definitionally speaking, you brought up light duty vehicles, heavy 73 00:03:59,720 --> 00:04:02,280 Speaker 1: duty vehicles, tractors are going to be mixed in there. 74 00:04:02,560 --> 00:04:03,440 Speaker 2: Anything I've missed. 75 00:04:03,920 --> 00:04:07,520 Speaker 4: I think tractors are normally grouped under heavy duty vehicles, 76 00:04:07,720 --> 00:04:11,200 Speaker 4: So I think maybe when we talk about trucks, it's 77 00:04:11,240 --> 00:04:14,840 Speaker 4: mostly referring to medium and heavy duty vehicles. So medium 78 00:04:14,920 --> 00:04:19,039 Speaker 4: duty vehicles it's relatively small share of the medium and 79 00:04:19,080 --> 00:04:21,800 Speaker 4: heavy duty segment. Most of it is heavy duty, and 80 00:04:21,839 --> 00:04:23,880 Speaker 4: also heavy duty includes tractors. 81 00:04:24,200 --> 00:04:26,720 Speaker 1: So here's where we can do kind of a heuristics 82 00:04:27,080 --> 00:04:31,760 Speaker 1: bactbusting moment. My perception of the global logistics fleet is 83 00:04:31,760 --> 00:04:34,640 Speaker 1: that it is growing, and that is definitely based through 84 00:04:35,080 --> 00:04:38,279 Speaker 1: my own experience in more things being delivered directly to 85 00:04:38,360 --> 00:04:40,839 Speaker 1: my home, but surely they had to go to a 86 00:04:40,839 --> 00:04:43,200 Speaker 1: shop at some point in time. So maybe that's just 87 00:04:43,400 --> 00:04:47,200 Speaker 1: me having more of an interaction with the global logistics fleet. 88 00:04:47,440 --> 00:04:49,720 Speaker 2: Is it going down, going up? Flat? 89 00:04:49,960 --> 00:04:53,640 Speaker 1: What is changing in the I guess the trucking space 90 00:04:53,960 --> 00:04:58,880 Speaker 1: in terms of its percentage represented within the total transportation pie. 91 00:04:59,200 --> 00:05:02,080 Speaker 3: It depends on where you are. So in some countries 92 00:05:02,560 --> 00:05:06,560 Speaker 3: more advanced economies, the total fleet the vehicles on the roads. 93 00:05:06,560 --> 00:05:08,560 Speaker 3: So those trucks on the road do not change in 94 00:05:08,880 --> 00:05:12,200 Speaker 3: a huge way. I mean it increases slightly according to 95 00:05:12,320 --> 00:05:15,479 Speaker 3: GDP for example, but not in an dramatic way. And 96 00:05:15,640 --> 00:05:18,000 Speaker 3: what changes there is the mix of vehicles. Yes, you 97 00:05:18,040 --> 00:05:20,320 Speaker 3: do get a lot more of those delivery events run 98 00:05:20,400 --> 00:05:23,240 Speaker 3: on the heavy trucks. Operations become a little bit more efficient, 99 00:05:23,320 --> 00:05:26,279 Speaker 3: so there are these balancing items there. When you go 100 00:05:26,360 --> 00:05:29,880 Speaker 3: to some other economies we're talking about, for example, India 101 00:05:30,000 --> 00:05:33,520 Speaker 3: or China or place like that, or Southeast Asia or 102 00:05:33,600 --> 00:05:37,280 Speaker 3: even in South America, there you do see a large 103 00:05:37,480 --> 00:05:41,480 Speaker 3: increase of the fleet already, and we expect that to continue. 104 00:05:41,480 --> 00:05:44,080 Speaker 3: That has to do with the industrialization of the economies. 105 00:05:44,120 --> 00:05:47,679 Speaker 3: It has to do with more people requiring more stuff. 106 00:05:47,760 --> 00:05:52,359 Speaker 3: I mean you're moving away from transporting gravel for construction 107 00:05:52,480 --> 00:05:56,560 Speaker 3: projects and you start to move machinery for example, or 108 00:05:56,640 --> 00:05:59,560 Speaker 3: cars or packages or things like that, where you need 109 00:05:59,680 --> 00:06:03,560 Speaker 3: more vehicles to turn over that volume of goods. So 110 00:06:03,640 --> 00:06:07,120 Speaker 3: it depends on where you are. Someplace it grows, someplaces 111 00:06:07,240 --> 00:06:09,480 Speaker 3: is more constant, and it grows only slightly. 112 00:06:09,800 --> 00:06:13,080 Speaker 4: I think also if we really want to dive deep 113 00:06:13,120 --> 00:06:16,080 Speaker 4: into this with respect to the outlook of how the 114 00:06:16,120 --> 00:06:18,680 Speaker 4: fleet will change, I think it will also depend on 115 00:06:18,760 --> 00:06:23,120 Speaker 4: the development of more advanced technologies, like self driving technologies 116 00:06:23,120 --> 00:06:26,799 Speaker 4: for trucks, because we are seeing more and more developments 117 00:06:26,839 --> 00:06:30,720 Speaker 4: of robotrucks and robovans, even though a lot of these 118 00:06:30,760 --> 00:06:34,560 Speaker 4: are still quite early stage. So in Benof's electric vehicle 119 00:06:34,600 --> 00:06:38,720 Speaker 4: outlook for passenger cars, for instance, we assume that the 120 00:06:38,839 --> 00:06:43,000 Speaker 4: use of self driving technologies or autonomous vehicles will help 121 00:06:43,240 --> 00:06:47,080 Speaker 4: make the mileage or the distance that vehicles travel everything 122 00:06:47,120 --> 00:06:51,480 Speaker 4: more efficient, and it's very likely that for fleet vehicles 123 00:06:51,520 --> 00:06:54,480 Speaker 4: that's a similar case. Like a lot of the self 124 00:06:54,560 --> 00:06:59,000 Speaker 4: driving truck technology companies, they're trying to advocate that their 125 00:06:59,040 --> 00:07:03,839 Speaker 4: technology can basically cut waste mileage or empty miles, so 126 00:07:03,880 --> 00:07:09,159 Speaker 4: that basically one truck can travel more efficiently. But of course, 127 00:07:09,320 --> 00:07:12,280 Speaker 4: since we don't really see many of these self driving 128 00:07:12,280 --> 00:07:15,880 Speaker 4: trucks actually on the road like in full operation yet, 129 00:07:16,080 --> 00:07:18,200 Speaker 4: it's more of a story for the future. 130 00:07:18,680 --> 00:07:21,280 Speaker 1: But go into that in a bit more detail, because 131 00:07:21,480 --> 00:07:26,520 Speaker 1: why would self driving vehicles lend themselves to also being 132 00:07:26,880 --> 00:07:31,240 Speaker 1: low emissions vehicles or even then arguably relying on electric 133 00:07:31,280 --> 00:07:34,240 Speaker 1: and battery packs, because presumably you could have an internal 134 00:07:34,280 --> 00:07:38,480 Speaker 1: combustion engine big diesel semi that has lots of sensors 135 00:07:38,560 --> 00:07:40,880 Speaker 1: and is out there on the road and is self driving. 136 00:07:41,160 --> 00:07:45,440 Speaker 4: I think it's not just about the zero emission power train. 137 00:07:45,760 --> 00:07:49,120 Speaker 4: So even if a self driving truck is let's say, 138 00:07:49,200 --> 00:07:53,640 Speaker 4: operating with an internal combustion engine, if they result in 139 00:07:53,760 --> 00:07:57,480 Speaker 4: less like empty miles traveled on the vehicles, it will 140 00:07:57,520 --> 00:08:02,600 Speaker 4: still result in less emissions or less wasted emissions in 141 00:08:02,640 --> 00:08:05,800 Speaker 4: general for the vehicles. So even if they are still 142 00:08:05,880 --> 00:08:10,240 Speaker 4: using internal combustion engine, there is an argument that these 143 00:08:10,440 --> 00:08:14,360 Speaker 4: technologies could potentially cut the emissions like beyond just using 144 00:08:14,360 --> 00:08:17,120 Speaker 4: the drive train. Of course, we are also seeing some 145 00:08:17,280 --> 00:08:21,840 Speaker 4: companies like iron Ride developing like autonomous electric trucks, but 146 00:08:22,240 --> 00:08:26,840 Speaker 4: I guess because both autonomous and electric technologies require like 147 00:08:26,960 --> 00:08:31,080 Speaker 4: add on costs, so we are still waiting for the 148 00:08:31,240 --> 00:08:34,719 Speaker 4: cost for these technologies to go down before it can 149 00:08:34,800 --> 00:08:37,000 Speaker 4: be adopted on a mass scale. 150 00:08:37,160 --> 00:08:39,920 Speaker 1: So they're not intrinsically linked. But the point that you're 151 00:08:39,920 --> 00:08:42,360 Speaker 1: making is, if you're going to upgrade your fleet, why 152 00:08:42,400 --> 00:08:45,760 Speaker 1: not do multiple upgrades in one go. So from the 153 00:08:45,840 --> 00:08:49,160 Speaker 1: perspective of the individual who's buying these, so let's go 154 00:08:49,200 --> 00:08:51,400 Speaker 1: with the medium duty trucks and the things that are 155 00:08:51,440 --> 00:08:53,880 Speaker 1: delivering you know, stuff to my home, stuff that I'm 156 00:08:53,880 --> 00:08:56,960 Speaker 1: now picturing in my mind showing up in my doorstep. 157 00:08:57,240 --> 00:09:00,160 Speaker 1: If I'm the owner of the business who needs to 158 00:09:00,200 --> 00:09:03,400 Speaker 1: get things in the logistics chain around the world, and 159 00:09:03,480 --> 00:09:07,000 Speaker 1: I'm upgrading my vehicles, what are the reasons for and 160 00:09:07,000 --> 00:09:09,000 Speaker 1: perhaps we can also do against, But what are the 161 00:09:09,040 --> 00:09:13,080 Speaker 1: reasons for wanting some of these low emissions vehicles? You 162 00:09:13,240 --> 00:09:15,560 Speaker 1: already pointed out much better utilization. 163 00:09:16,240 --> 00:09:19,400 Speaker 3: So there's a number of reasons why someone would go 164 00:09:19,480 --> 00:09:23,200 Speaker 3: and buy, for example, electric trucks. One is efficiency games. 165 00:09:23,440 --> 00:09:26,760 Speaker 3: So you need a lot less energy to move an 166 00:09:26,760 --> 00:09:29,480 Speaker 3: electric truck primarily because you use more of the energy 167 00:09:29,480 --> 00:09:32,520 Speaker 3: that you have, So that results in a large extent 168 00:09:32,600 --> 00:09:36,680 Speaker 3: in operational savings, and for fleet owners small and large 169 00:09:36,679 --> 00:09:39,280 Speaker 3: fleet owners, the cost of fuel is a very high 170 00:09:39,360 --> 00:09:42,280 Speaker 3: share of the total costs, so you do get that 171 00:09:42,320 --> 00:09:45,920 Speaker 3: benefit and that results in real savings. The second one 172 00:09:45,960 --> 00:09:48,360 Speaker 3: that I see and we hear a lot has to 173 00:09:48,400 --> 00:09:51,800 Speaker 3: do with different policies and regulations in either the national 174 00:09:51,840 --> 00:09:55,079 Speaker 3: level or the local level. Sometimes, especially now, you may 175 00:09:55,160 --> 00:09:57,360 Speaker 3: have to buy a zero mission or at least as 176 00:09:57,400 --> 00:10:00,040 Speaker 3: your tail by the mission van or truck. Two, the 177 00:10:00,080 --> 00:10:03,160 Speaker 3: research I think are the main ones why people are 178 00:10:03,200 --> 00:10:09,160 Speaker 3: considering and buying primarily buttery electric vans, medium trucks, heavy trucks, tructors, 179 00:10:09,200 --> 00:10:12,240 Speaker 3: and the rat savings for sure, I mean that works 180 00:10:12,240 --> 00:10:15,200 Speaker 3: and that makes the perfect sense in trucking logistics. And 181 00:10:15,240 --> 00:10:16,600 Speaker 3: then it's a regulation. 182 00:10:17,240 --> 00:10:20,600 Speaker 4: Yeah, I agree. I think policy really matters at the 183 00:10:20,640 --> 00:10:24,200 Speaker 4: moment because it's still quite an early market, especially for 184 00:10:24,600 --> 00:10:28,320 Speaker 4: zero mission heavy duty vehicles, because the cost savings will 185 00:10:28,400 --> 00:10:32,760 Speaker 4: vary depending on the electricity prices or charging tariffs by 186 00:10:32,800 --> 00:10:36,600 Speaker 4: each region. For example, China tends to have cheaper charging 187 00:10:36,640 --> 00:10:40,520 Speaker 4: tariffs compared with like average diesel prices, but that might 188 00:10:40,559 --> 00:10:44,120 Speaker 4: not be the case for Europe. So when these kind 189 00:10:44,160 --> 00:10:48,559 Speaker 4: of cost differences vary, it's quite important to have incentives 190 00:10:48,600 --> 00:10:52,320 Speaker 4: to support the early market, and also for smaller fleets, 191 00:10:52,559 --> 00:10:56,520 Speaker 4: the high upfront cost of electric trucks is something that 192 00:10:56,600 --> 00:10:59,960 Speaker 4: they really need to consider twice before the bio vehicle. 193 00:11:00,440 --> 00:11:04,200 Speaker 4: Even though in regions where charging tariffs are low, the 194 00:11:04,320 --> 00:11:08,400 Speaker 4: lower overall operating costs can help even out that high 195 00:11:08,600 --> 00:11:11,560 Speaker 4: upfront cost over the years, but for a small fleet, 196 00:11:11,679 --> 00:11:16,200 Speaker 4: for perhaps without significant access to capital and financing, that 197 00:11:16,320 --> 00:11:19,760 Speaker 4: high upfront cost is still very challenging for them, and 198 00:11:19,880 --> 00:11:23,960 Speaker 4: for this reason, we're also seeing fleet management companies emerge 199 00:11:23,960 --> 00:11:27,640 Speaker 4: on the market specifically focused on electric truck as a 200 00:11:27,679 --> 00:11:31,720 Speaker 4: service for instance, which means that they rent out these trucks, 201 00:11:31,760 --> 00:11:34,880 Speaker 4: but not just the trucks themselves, but they often bundle 202 00:11:34,920 --> 00:11:38,960 Speaker 4: the trucks with charging costs in monthly subscription based models, 203 00:11:39,120 --> 00:11:43,760 Speaker 4: so essentially they use the lower charging tariffs to offset 204 00:11:44,040 --> 00:11:48,199 Speaker 4: that higher initial purchase costs for fleets, so that fleets 205 00:11:48,240 --> 00:11:51,600 Speaker 4: can choose to like just use the subscription as opposed 206 00:11:51,600 --> 00:11:54,080 Speaker 4: to having to pour a lot of money to invest 207 00:11:54,240 --> 00:11:58,240 Speaker 4: in these trucks as assets. Because another element of it 208 00:11:58,280 --> 00:12:01,400 Speaker 4: would be the residual value risk of these vehicles. Because 209 00:12:01,440 --> 00:12:04,960 Speaker 4: for fleet operators that's another big thing because there aren't 210 00:12:04,960 --> 00:12:07,320 Speaker 4: that many battery electric trucks on the road yet, so 211 00:12:07,520 --> 00:12:10,960 Speaker 4: there isn't a very mature like secondhand market, and people 212 00:12:11,000 --> 00:12:14,480 Speaker 4: don't have the full picture of what battery degradation would 213 00:12:14,520 --> 00:12:17,480 Speaker 4: look like for these vehicles and how much value the 214 00:12:17,559 --> 00:12:20,959 Speaker 4: vehicles can retain for the fleet owners. So a lot 215 00:12:21,000 --> 00:12:24,960 Speaker 4: of times third party like fleet management companies might be better 216 00:12:24,960 --> 00:12:29,240 Speaker 4: positioned to take on that risk compared to like smaller fleets. 217 00:12:29,559 --> 00:12:32,480 Speaker 1: So the team that you both sit in, of course 218 00:12:32,520 --> 00:12:35,200 Speaker 1: has to do with transportation, but the bigger kind of 219 00:12:35,640 --> 00:12:39,320 Speaker 1: group that you're in is called sector transitions, and this 220 00:12:39,480 --> 00:12:43,120 Speaker 1: is certainly a sector undergoing transition in a lot of 221 00:12:43,160 --> 00:12:46,600 Speaker 1: different ways, because you're pointing out different technology advancements that 222 00:12:46,640 --> 00:12:49,320 Speaker 1: are actively happening and being developed. When it comes to 223 00:12:49,320 --> 00:12:52,520 Speaker 1: self driving, you're talking about changes to the drive train 224 00:12:52,679 --> 00:12:57,400 Speaker 1: which are really big and transformational potentially. So let's talk 225 00:12:57,440 --> 00:13:01,000 Speaker 1: about going back to my initial question, which most simply 226 00:13:01,080 --> 00:13:03,760 Speaker 1: put is how big of a deal is this? How 227 00:13:03,880 --> 00:13:09,040 Speaker 1: fast is the transition to zero missions commercial vehicles actually happening? 228 00:13:09,200 --> 00:13:11,120 Speaker 1: And where in the world are we seeing it appen 229 00:13:11,160 --> 00:13:12,120 Speaker 1: the fastest? 230 00:13:12,280 --> 00:13:16,559 Speaker 4: I think in terms of volume, it's definitely in China 231 00:13:16,800 --> 00:13:20,480 Speaker 4: for electric trucks, because this year we've really been seeing 232 00:13:20,679 --> 00:13:25,199 Speaker 4: electric medium and heavy duty truck sales skyrocketing in China 233 00:13:25,240 --> 00:13:28,520 Speaker 4: in the first three quarters to almost one hundred and 234 00:13:28,520 --> 00:13:32,240 Speaker 4: thirty five thousand vehicles in total, and that's up one 235 00:13:32,280 --> 00:13:35,640 Speaker 4: hundred and sixty seven percent year on year, and the 236 00:13:35,720 --> 00:13:38,640 Speaker 4: first half of the year sales have already surpassed like 237 00:13:38,720 --> 00:13:42,200 Speaker 4: full year twenty twenty four sales in terms of the 238 00:13:42,480 --> 00:13:46,360 Speaker 4: share of the market. Actually, it's in some smaller European 239 00:13:46,440 --> 00:13:50,640 Speaker 4: countries like Netherlands and Switzerland that have the highest uptick 240 00:13:50,720 --> 00:13:53,880 Speaker 4: this year, and I think in all of these cases 241 00:13:54,000 --> 00:13:57,439 Speaker 4: it's really the policy that's like driving the uptick at 242 00:13:57,440 --> 00:14:00,559 Speaker 4: the moment. In China, mainly from the middle of twenty 243 00:14:00,600 --> 00:14:05,079 Speaker 4: twenty four onwards, the government introduced a series of scrapish 244 00:14:05,120 --> 00:14:08,320 Speaker 4: subsidies aiming at boosting the economy as a whole. But 245 00:14:08,480 --> 00:14:12,280 Speaker 4: some of these subsidies were dedicated to like replacing old 246 00:14:12,440 --> 00:14:17,160 Speaker 4: diesel trucks, and when fleet owners buy new electric models 247 00:14:17,200 --> 00:14:20,480 Speaker 4: to replace the old trucks, they can get a higher 248 00:14:20,560 --> 00:14:23,480 Speaker 4: level of subsidy as opposed to one day by a 249 00:14:23,520 --> 00:14:27,760 Speaker 4: new diesel truck. So I think that's what's driving the 250 00:14:27,840 --> 00:14:30,760 Speaker 4: high sales in China end of last year and also 251 00:14:31,000 --> 00:14:34,840 Speaker 4: this year and in the Netherlands and Switzerland. I think 252 00:14:34,960 --> 00:14:38,040 Speaker 4: it's a lot of the municipal policies that matter. Because 253 00:14:38,160 --> 00:14:41,520 Speaker 4: the Netherlands at the start of this year introduced zero 254 00:14:41,680 --> 00:14:45,520 Speaker 4: mission zones among its cities, which means that in certain 255 00:14:45,560 --> 00:14:48,320 Speaker 4: times of the day or in certain areas of the city, 256 00:14:48,560 --> 00:14:51,640 Speaker 4: only zero mission vehicles may be allowed to enter. 257 00:14:52,440 --> 00:14:56,040 Speaker 1: So when you talk about low and zero missions tracks, 258 00:14:56,360 --> 00:15:01,400 Speaker 1: they can come in lots of different technology battery or hybrid, 259 00:15:01,720 --> 00:15:05,720 Speaker 1: fuel cells and hydrogen, which ones which technologies are winning 260 00:15:05,760 --> 00:15:06,360 Speaker 1: out all that. 261 00:15:06,480 --> 00:15:09,800 Speaker 3: Front its batteries, there's no fuel cell trucks, I mean, 262 00:15:09,800 --> 00:15:13,560 Speaker 3: the technical case makes sense, makes some sense, but the 263 00:15:13,600 --> 00:15:16,600 Speaker 3: economic case doesn't for fuel cell trucks, and we've seen 264 00:15:16,640 --> 00:15:18,560 Speaker 3: that in the sales in the market. So the main 265 00:15:18,680 --> 00:15:21,360 Speaker 3: place for fuel cell trucks that also be China. For 266 00:15:21,480 --> 00:15:25,200 Speaker 3: very specific reasons. Fuel cell truck sales in China picked 267 00:15:25,240 --> 00:15:28,240 Speaker 3: about two years ago and they have been declining since then. 268 00:15:28,360 --> 00:15:31,840 Speaker 3: So some of the subjecties, the policies were removed, I mean, 269 00:15:31,880 --> 00:15:34,880 Speaker 3: the technologies it was okay, but still is at a 270 00:15:34,920 --> 00:15:38,760 Speaker 3: very early stage. So we see that both the technology 271 00:15:38,920 --> 00:15:42,040 Speaker 3: and the economic case. In particular, the economic case for 272 00:15:42,280 --> 00:15:46,080 Speaker 3: battery trucks. In fact, across all segments and most use 273 00:15:46,160 --> 00:15:49,680 Speaker 3: cases will compare fuel cell and electric is in favor 274 00:15:49,720 --> 00:15:52,400 Speaker 3: of the battery electric. And now the big question there, 275 00:15:52,440 --> 00:15:55,800 Speaker 3: of course, is of these buttery electrics in fact compare 276 00:15:55,920 --> 00:15:57,960 Speaker 3: versius diesel, because that's what people think. I mean, people 277 00:15:58,000 --> 00:16:00,760 Speaker 3: do not think about butteries and fuel cells. We see 278 00:16:00,920 --> 00:16:03,480 Speaker 3: like gradual progress on that front as well, but on 279 00:16:03,560 --> 00:16:07,240 Speaker 3: the technology and the new technology front, it's practically buttery electric. 280 00:16:07,560 --> 00:16:10,640 Speaker 3: I mean, we see some plugging hybrid advance in Europe 281 00:16:10,640 --> 00:16:15,000 Speaker 3: and in China as well. There are some newer companies 282 00:16:15,040 --> 00:16:18,480 Speaker 3: that are building plugging hybrid or so called range extender 283 00:16:18,760 --> 00:16:21,760 Speaker 3: heavy duty trucks. Range extender meaning practically you have a 284 00:16:21,800 --> 00:16:25,360 Speaker 3: small diesel engine whose only purposes to charge a battery, 285 00:16:25,440 --> 00:16:28,040 Speaker 3: and then the battery is and an electric motor move 286 00:16:28,320 --> 00:16:31,440 Speaker 3: the truck forward. We see some models being at least 287 00:16:31,440 --> 00:16:34,000 Speaker 3: developed there, but the majority of the models that we 288 00:16:34,040 --> 00:16:38,000 Speaker 3: see coming online the market in all segments are buttery electric. 289 00:16:38,640 --> 00:16:38,880 Speaker 1: Yeah. 290 00:16:38,920 --> 00:16:42,400 Speaker 4: I think when people think about the power train choices, 291 00:16:42,520 --> 00:16:45,320 Speaker 4: what they really think about is the range of the vehicle. 292 00:16:45,600 --> 00:16:48,480 Speaker 4: I think that's probably aside from costs, that's probably one 293 00:16:48,560 --> 00:16:50,920 Speaker 4: of the first things that come to their minds. In 294 00:16:51,000 --> 00:16:54,760 Speaker 4: the initial days, the argument for fuel cell trucks was 295 00:16:54,800 --> 00:16:57,680 Speaker 4: that they can have higher range. But now that we're 296 00:16:57,800 --> 00:17:03,360 Speaker 4: seeing constant improvements and technologies, some battery electric trucks can 297 00:17:03,560 --> 00:17:07,040 Speaker 4: have let's say, a nameplate range of like eight hundred 298 00:17:07,200 --> 00:17:11,000 Speaker 4: kilometers or something, and that's already on par with some 299 00:17:11,119 --> 00:17:13,919 Speaker 4: of the fuel cell trucks. So I think as the 300 00:17:14,040 --> 00:17:17,800 Speaker 4: range of the battery electric trucks continue to improve, they 301 00:17:17,880 --> 00:17:21,800 Speaker 4: might eat into some of the addressable markets of fuel 302 00:17:21,800 --> 00:17:25,440 Speaker 4: cell trucks as well. So we definitely see a continual 303 00:17:25,680 --> 00:17:29,439 Speaker 4: dominance of batteries in the zero mission power trains, But 304 00:17:29,560 --> 00:17:32,560 Speaker 4: as to how it compares to other drive trains like 305 00:17:32,680 --> 00:17:36,280 Speaker 4: diesel or natural gas, the range is perhaps still to 306 00:17:36,320 --> 00:17:40,000 Speaker 4: be improved because even though the theoretical range of some 307 00:17:40,040 --> 00:17:42,600 Speaker 4: of these trucks are high, when they operate in real 308 00:17:42,640 --> 00:17:46,480 Speaker 4: world conditions, they might be affected by cold weather or 309 00:17:46,520 --> 00:17:50,680 Speaker 4: by the payload, so there is still some uncertainty as 310 00:17:50,720 --> 00:17:53,639 Speaker 4: to how far can they get. And also the charging 311 00:17:53,680 --> 00:17:58,199 Speaker 4: infrastructure is another element, because obviously the refueling infrastructure for 312 00:17:58,359 --> 00:18:02,159 Speaker 4: diesel and natural gas trucks. It's already mature. Warries for 313 00:18:02,400 --> 00:18:07,000 Speaker 4: battery electric trucks, like truck charging infrastructures still scaling, so 314 00:18:07,080 --> 00:18:10,840 Speaker 4: that will determine if these trucks can actually expand into 315 00:18:10,920 --> 00:18:14,000 Speaker 4: regional and long haul use cases. Currently, most of these 316 00:18:14,040 --> 00:18:17,200 Speaker 4: electric trucks are deployed in short haul and closed loop 317 00:18:17,320 --> 00:18:21,240 Speaker 4: settings where the range and the infrastructure requirements can be 318 00:18:21,280 --> 00:18:22,320 Speaker 4: more easily met. 319 00:18:22,720 --> 00:18:26,240 Speaker 1: Yeah, I mean you're talking about ranges essentially code for 320 00:18:26,280 --> 00:18:28,919 Speaker 1: how often I'm going to have to charge this vehicle 321 00:18:28,960 --> 00:18:31,800 Speaker 1: and how much downtime you might have in between before 322 00:18:31,840 --> 00:18:34,720 Speaker 1: you can get back on the road, presumably with a 323 00:18:34,920 --> 00:18:37,480 Speaker 1: driver kind of waiting for it charge for them to 324 00:18:37,560 --> 00:18:41,280 Speaker 1: keep going. So when it comes to charging networks, and 325 00:18:41,359 --> 00:18:44,840 Speaker 1: we've dedicated entire shows to charging networks for passenger vehicles, 326 00:18:44,840 --> 00:18:47,400 Speaker 1: so this is not a small issue. But you highlighted 327 00:18:47,480 --> 00:18:51,199 Speaker 1: that the diesel refueling network, it already exists, it's been 328 00:18:51,200 --> 00:18:53,680 Speaker 1: built up over time, and that is essentially what they're 329 00:18:53,680 --> 00:18:58,600 Speaker 1: competing with. So how good is the charging network and 330 00:18:59,000 --> 00:19:01,440 Speaker 1: you know, where do you see this working? Maybe paint 331 00:19:01,440 --> 00:19:05,440 Speaker 1: a picture for us of those circumstances where how much 332 00:19:05,560 --> 00:19:08,840 Speaker 1: time is this vehicle being used. What is the downtime 333 00:19:09,200 --> 00:19:12,160 Speaker 1: in recharging? Are they able to charge it midway through 334 00:19:12,200 --> 00:19:14,160 Speaker 1: the day, during a break and then get going again. 335 00:19:14,320 --> 00:19:17,760 Speaker 1: You know, what's the ideal scenario if you are someone 336 00:19:17,800 --> 00:19:19,480 Speaker 1: that is operating one of these fleets. 337 00:19:19,840 --> 00:19:23,720 Speaker 4: Yeah, I think there's really a wide variety of scenarios. 338 00:19:23,960 --> 00:19:27,119 Speaker 4: It depends on the battery size and the charging power 339 00:19:27,240 --> 00:19:30,760 Speaker 4: of the vehicle. I guess in China, for example, we're 340 00:19:30,800 --> 00:19:35,280 Speaker 4: seeing nine thousand stations that are already like in the pipeline, 341 00:19:35,320 --> 00:19:39,119 Speaker 4: and most of them have been constructed that serve electric trucks. 342 00:19:39,320 --> 00:19:42,199 Speaker 4: But these sites, some of them serve a mix of 343 00:19:42,240 --> 00:19:45,240 Speaker 4: trucks and passenger evis, So we don't have an exact 344 00:19:45,240 --> 00:19:49,320 Speaker 4: breakdown of the utilization rate. But in terms of the chargers, 345 00:19:49,480 --> 00:19:52,600 Speaker 4: what's a very common charger power level is around like 346 00:19:52,720 --> 00:19:56,600 Speaker 4: three one hundred and twenty kilowatts, and the speed of 347 00:19:56,760 --> 00:20:00,320 Speaker 4: charging will correspond to the battery size. So the higher 348 00:20:00,359 --> 00:20:03,440 Speaker 4: size the battery is, the higher power it will need 349 00:20:03,600 --> 00:20:06,720 Speaker 4: to charge in a given amount of time. But for 350 00:20:06,840 --> 00:20:10,240 Speaker 4: a battery size that roughly matches the level of the charger, 351 00:20:10,480 --> 00:20:12,639 Speaker 4: we kind of see that some of these trucks can 352 00:20:12,680 --> 00:20:16,600 Speaker 4: already charge within one hour to like fully powered, so 353 00:20:16,880 --> 00:20:20,000 Speaker 4: I think that's doable for some instance. And on the 354 00:20:20,040 --> 00:20:24,080 Speaker 4: other hand, because the average range of electric trucks in 355 00:20:24,160 --> 00:20:27,520 Speaker 4: China is already three hundred kilometers and more, and the 356 00:20:27,600 --> 00:20:32,159 Speaker 4: range is constantly improving, and that's already enough to cover 357 00:20:32,560 --> 00:20:36,360 Speaker 4: most of the driving distances of the trucks in that country, 358 00:20:36,520 --> 00:20:39,160 Speaker 4: because I think the average driving distance of a truck 359 00:20:39,200 --> 00:20:42,000 Speaker 4: per day is perhaps around one hundred to two hundred 360 00:20:42,160 --> 00:20:46,320 Speaker 4: kilometers in China, so theoretically they could charge maybe once 361 00:20:46,359 --> 00:20:48,159 Speaker 4: a day or once every two days. 362 00:20:48,400 --> 00:20:50,560 Speaker 3: To a large extent, yes, the industry is still trying 363 00:20:50,560 --> 00:20:53,360 Speaker 3: to find each way. The large variety of use cases 364 00:20:53,640 --> 00:20:56,840 Speaker 3: also coupled with what the menu was talking about earlier, 365 00:20:56,920 --> 00:21:01,840 Speaker 3: the rapid improvement in technology. A few years ago, everyone 366 00:21:01,960 --> 00:21:05,000 Speaker 3: was talking about megawatt level charging, so one charger a 367 00:21:05,080 --> 00:21:08,080 Speaker 3: megawatt or more. It seems that you may not need 368 00:21:08,119 --> 00:21:11,280 Speaker 3: that many of those anymore, primarily because you can go further. 369 00:21:11,800 --> 00:21:15,280 Speaker 3: Perhaps it makes more sense to build slightly smaller charges 370 00:21:15,359 --> 00:21:18,240 Speaker 3: and more of them around than a few very large ones. 371 00:21:18,280 --> 00:21:20,399 Speaker 3: And to an extent, I think, yes, the people are 372 00:21:20,440 --> 00:21:23,720 Speaker 3: still trying to figure out the best overlap between the 373 00:21:23,840 --> 00:21:28,240 Speaker 3: duty cycle the utilization case and what the charging environment 374 00:21:28,280 --> 00:21:30,120 Speaker 3: there means. I mean, when do you get a good rate? 375 00:21:30,160 --> 00:21:32,159 Speaker 3: I mean is it when you're parked or when you 376 00:21:32,240 --> 00:21:35,199 Speaker 3: have to be in the delivering staff? And that's what 377 00:21:35,359 --> 00:21:37,680 Speaker 3: we see. I mean, China is a lot more advanced. 378 00:21:37,680 --> 00:21:40,080 Speaker 3: In other place, there is funding from the European Union 379 00:21:40,760 --> 00:21:44,400 Speaker 3: government funding as well. There is a very interesting situation 380 00:21:44,440 --> 00:21:48,200 Speaker 3: in the US where the market for electric trucks doesn't exist, 381 00:21:48,400 --> 00:21:53,119 Speaker 3: but the market for truck charging stations is developing in 382 00:21:53,520 --> 00:21:57,080 Speaker 3: a quite quite interesting wave in very innovative businesses building 383 00:21:57,119 --> 00:22:00,240 Speaker 3: those charging stations. So it's a very kind of HARKing 384 00:22:00,320 --> 00:22:04,199 Speaker 3: with fertile ground for innovation business opportunities. Fleets, I mean 385 00:22:04,240 --> 00:22:06,240 Speaker 3: the way that we see it right now, they're still 386 00:22:06,280 --> 00:22:10,040 Speaker 3: trying to understand what best works with the infrastructure they 387 00:22:10,080 --> 00:22:13,040 Speaker 3: have and how to also adopt to the infrastructure that 388 00:22:13,080 --> 00:22:14,240 Speaker 3: may be coming up. 389 00:22:14,480 --> 00:22:18,199 Speaker 1: And presumably then also communicating with one another and the 390 00:22:18,200 --> 00:22:20,720 Speaker 1: owners of these fleets because they are pretty sensitive or 391 00:22:20,760 --> 00:22:23,439 Speaker 1: thinking about when is the cheapest time for me to 392 00:22:24,000 --> 00:22:27,960 Speaker 1: charge versus when can I deliver and trying to marry 393 00:22:28,040 --> 00:22:30,600 Speaker 1: those up so not everyone is charging at the same time, 394 00:22:30,760 --> 00:22:33,439 Speaker 1: Because are you seeing I guess overnight would be a 395 00:22:33,440 --> 00:22:35,520 Speaker 1: good time to charge many of these, which is when 396 00:22:35,760 --> 00:22:38,639 Speaker 1: otherwise the grid and those of us who are using 397 00:22:38,840 --> 00:22:42,280 Speaker 1: energy domestically that amount has come down. Are you seeing 398 00:22:42,280 --> 00:22:45,119 Speaker 1: it filling into these kind of gaps from a load 399 00:22:45,200 --> 00:22:49,680 Speaker 1: standpoint where it's not creating excess spikes on the grid 400 00:22:49,720 --> 00:22:51,960 Speaker 1: Because one of my favorite charts actually is one where 401 00:22:52,000 --> 00:22:54,520 Speaker 1: you look at during the World Cup and halfway through 402 00:22:54,640 --> 00:22:56,840 Speaker 1: during the break and then in the UK everyone goes 403 00:22:56,840 --> 00:22:59,240 Speaker 1: to turn their electric tea kettle on and this causes 404 00:22:59,280 --> 00:23:01,800 Speaker 1: this massive bike in terms of energy demand. 405 00:23:02,040 --> 00:23:03,760 Speaker 2: Are we seeing a you know. 406 00:23:03,680 --> 00:23:07,639 Speaker 1: An evening spike in medium duty vehicles getting charged? And 407 00:23:08,200 --> 00:23:10,640 Speaker 1: is there are there any trends that you're able to ascertain? 408 00:23:10,720 --> 00:23:12,840 Speaker 1: I guess at this point while the industry's trying to 409 00:23:12,840 --> 00:23:13,720 Speaker 1: figure itself out. 410 00:23:14,080 --> 00:23:16,680 Speaker 4: Yeah. I think it depends on the use case because 411 00:23:16,720 --> 00:23:20,000 Speaker 4: when we talk about charging for trucks, we kind of 412 00:23:20,080 --> 00:23:24,639 Speaker 4: divide them into public charging and depot charging. So for 413 00:23:24,760 --> 00:23:28,359 Speaker 4: a lot of the current electric truck fleet, because they're 414 00:23:28,440 --> 00:23:31,560 Speaker 4: operating in short haul or closed loop use cases like 415 00:23:31,720 --> 00:23:35,400 Speaker 4: mines reports, they tend to use more depot charging, which 416 00:23:35,480 --> 00:23:38,760 Speaker 4: and in that case they have more control over when 417 00:23:38,920 --> 00:23:41,960 Speaker 4: the fleet is being charged, and they perhaps could do 418 00:23:42,119 --> 00:23:45,199 Speaker 4: like more smart charging as we are seeing for like 419 00:23:45,320 --> 00:23:48,119 Speaker 4: some of the electric bus fleets, but I think in 420 00:23:48,200 --> 00:23:51,920 Speaker 4: terms of public charging it might not be so manageable 421 00:23:52,080 --> 00:23:55,720 Speaker 4: because the trucks are just coming and going into the station. 422 00:23:56,119 --> 00:23:59,960 Speaker 4: And I guess another alternative that we're seeing for truck 423 00:24:00,240 --> 00:24:04,800 Speaker 4: is battery swapping, even though we're only seeing in China predominantly. 424 00:24:05,040 --> 00:24:09,800 Speaker 4: Because battery swopping, it can basically swap in a fully 425 00:24:09,880 --> 00:24:13,560 Speaker 4: charged battery for the trucks in around ten minutes or less, 426 00:24:13,640 --> 00:24:17,119 Speaker 4: and that is significantly less time than it takes to 427 00:24:17,440 --> 00:24:21,600 Speaker 4: charge a vehicle. So there's definitely some potential in using 428 00:24:21,720 --> 00:24:24,919 Speaker 4: that to improve the vehicle up time or even for 429 00:24:25,080 --> 00:24:28,320 Speaker 4: potential regional and long haul use cases. But the challenge 430 00:24:28,359 --> 00:24:31,560 Speaker 4: in that is the high capital cost of establishing a 431 00:24:31,560 --> 00:24:35,359 Speaker 4: battery swap station, and also the lack of standardization in 432 00:24:35,440 --> 00:24:38,119 Speaker 4: terms of both the vehicle batteries and how they swap 433 00:24:38,160 --> 00:24:42,360 Speaker 4: the batteries is another challenge. So I think overall charging 434 00:24:42,520 --> 00:24:46,520 Speaker 4: is still the more dominant solution that we're seeing for trucks, 435 00:24:46,640 --> 00:24:50,280 Speaker 4: even though it does create grid challenges in some cases, 436 00:24:50,440 --> 00:24:55,120 Speaker 4: especially along remote highways where the grid infrastructure is not there. 437 00:24:56,200 --> 00:24:59,520 Speaker 1: You've brought up long haul trucking and one of the 438 00:24:59,600 --> 00:25:03,640 Speaker 1: issues there with batteries is they weigh so much, and 439 00:25:04,119 --> 00:25:07,920 Speaker 1: long haul trucking is subject to different rules around weight. 440 00:25:08,240 --> 00:25:11,879 Speaker 1: You know, sometimes long haul trucking requires finding a different 441 00:25:11,960 --> 00:25:15,200 Speaker 1: route that it avoids way skills. We definitely don't want 442 00:25:15,200 --> 00:25:18,240 Speaker 1: a fleet of vehicles that are avoiding way skills because 443 00:25:18,240 --> 00:25:21,840 Speaker 1: these rules exist for a reason. So how is that 444 00:25:22,320 --> 00:25:24,919 Speaker 1: impeding adoption? How are they dealing with it? And you know, 445 00:25:25,000 --> 00:25:28,520 Speaker 1: also just from the experience of being in passenger vehicles 446 00:25:28,600 --> 00:25:33,600 Speaker 1: that are electric, that's stopping speed issue, which really fuels 447 00:25:33,600 --> 00:25:36,520 Speaker 1: a lot of that discussion around the weight limits. Has 448 00:25:36,520 --> 00:25:40,320 Speaker 1: that changed with their different rules for electric vehicles and 449 00:25:40,359 --> 00:25:43,080 Speaker 1: weight than in the long haul trucking space than for 450 00:25:43,160 --> 00:25:46,359 Speaker 1: some of the diesel ones, because perhaps they can stop 451 00:25:46,359 --> 00:25:49,720 Speaker 1: more quickly the way the electricity shuts off and the 452 00:25:49,720 --> 00:25:52,560 Speaker 1: way that vehicle can kind of power down de accelerate 453 00:25:52,720 --> 00:25:53,320 Speaker 1: more quickly. 454 00:25:53,680 --> 00:25:55,840 Speaker 3: There are in some regions for the world you do 455 00:25:55,920 --> 00:25:59,080 Speaker 3: see that overloading and it is it is, you know, 456 00:25:59,119 --> 00:26:03,000 Speaker 3: like the weight is, especially in a heavy duty long 457 00:26:03,040 --> 00:26:05,480 Speaker 3: hole is an issue, I mean no doubt about it 458 00:26:05,640 --> 00:26:07,280 Speaker 3: there and there are many ways to look at that. 459 00:26:07,400 --> 00:26:09,920 Speaker 3: First of all, we're not there yet in terms of 460 00:26:10,240 --> 00:26:14,879 Speaker 3: replacing our diesel fleet that does or the industry replacing 461 00:26:14,920 --> 00:26:16,959 Speaker 3: is digel flat that does heavy duty long houl with 462 00:26:17,040 --> 00:26:20,080 Speaker 3: bettery electric trucks at least at the volume anytime soon. 463 00:26:20,119 --> 00:26:23,480 Speaker 3: I mean, we see that increasing, but it is a 464 00:26:22,920 --> 00:26:25,760 Speaker 3: longer process. And what the way I'm saying that is 465 00:26:25,800 --> 00:26:27,919 Speaker 3: because during that time, I mean we're going back to 466 00:26:28,000 --> 00:26:31,280 Speaker 3: the technology story that underlies all that. Butters become better 467 00:26:31,320 --> 00:26:33,760 Speaker 3: and better, and part of becoming better and better is 468 00:26:33,760 --> 00:26:36,439 Speaker 3: that they become not only cheaper but lighter, and that 469 00:26:36,560 --> 00:26:39,800 Speaker 3: gradually will eliminate a large part of that of that 470 00:26:39,840 --> 00:26:43,120 Speaker 3: weight gap. When we're looking then at the heavy duty segment, 471 00:26:43,440 --> 00:26:45,880 Speaker 3: for sure, you want to load as much as you 472 00:26:45,880 --> 00:26:48,440 Speaker 3: you know, to put as much cargo there as you can. 473 00:26:49,040 --> 00:26:52,240 Speaker 3: Most of the use cases practically they reach the limit 474 00:26:52,280 --> 00:26:54,840 Speaker 3: of the volume of goods that they can put at 475 00:26:54,560 --> 00:26:56,919 Speaker 3: the back of a truck. Run on the weight, so 476 00:26:57,000 --> 00:26:59,720 Speaker 3: in parlance industry partners, they volume out run on the 477 00:26:59,800 --> 00:27:02,879 Speaker 3: way out. So that means that you do have a 478 00:27:02,920 --> 00:27:06,199 Speaker 3: penalty weight if you were to load that truck as 479 00:27:06,240 --> 00:27:07,879 Speaker 3: its full weight, but a lot of the times you 480 00:27:07,880 --> 00:27:09,960 Speaker 3: don't need to. The final one is that I think 481 00:27:10,000 --> 00:27:12,600 Speaker 3: the European Union you're about to get an allowance of 482 00:27:12,720 --> 00:27:14,880 Speaker 3: I think a couple of tons in the total deco 483 00:27:14,960 --> 00:27:18,119 Speaker 3: weight for bottery electric trucks in order to counterbalance that 484 00:27:18,720 --> 00:27:21,080 Speaker 3: impact for the fleet. It's a big impact. It can 485 00:27:21,560 --> 00:27:24,359 Speaker 3: switch the economics a lot if you are not able 486 00:27:24,400 --> 00:27:25,640 Speaker 3: to carry that extra weight. 487 00:27:26,080 --> 00:27:29,040 Speaker 1: Maine. Early on in the show, I brought up tractors, 488 00:27:29,320 --> 00:27:32,560 Speaker 1: and you rightfully pointed out that they are a subset 489 00:27:32,760 --> 00:27:36,240 Speaker 1: of the heavy duty vehicle space. But part of it, 490 00:27:36,280 --> 00:27:40,320 Speaker 1: I was so excited about what they represent in terms 491 00:27:40,320 --> 00:27:43,640 Speaker 1: of adoption. They're one of those standout parts of this 492 00:27:43,760 --> 00:27:47,520 Speaker 1: kind of broader trucking umbrella that had been pretty aggressive 493 00:27:47,520 --> 00:27:53,280 Speaker 1: adopters of low and zero emissions technologies. So wire tractors 494 00:27:53,680 --> 00:27:54,760 Speaker 1: a good use case. 495 00:27:55,200 --> 00:27:58,760 Speaker 4: Yeah, I think it's because of the use cases they 496 00:27:58,800 --> 00:28:02,560 Speaker 4: correspond to. Instance, a lot of the electric trucks we 497 00:28:02,600 --> 00:28:06,119 Speaker 4: are seeing today in the heavy duty segment are port tractors, 498 00:28:06,359 --> 00:28:12,240 Speaker 4: so imports specifically, like sometimes they have zero mission pilots 499 00:28:12,440 --> 00:28:17,000 Speaker 4: in specific ports where in places like China or California, 500 00:28:17,240 --> 00:28:21,240 Speaker 4: only like zero mission vehicles are allowed to enter the 501 00:28:21,320 --> 00:28:25,080 Speaker 4: ports at certain times, so I think that encourages the adoption, 502 00:28:25,160 --> 00:28:28,280 Speaker 4: and also if they're operating in like closed loop and 503 00:28:28,359 --> 00:28:32,760 Speaker 4: short haul use cases kind of matches the range of 504 00:28:32,840 --> 00:28:36,760 Speaker 4: the electric trucks as well. In China, it's quite a 505 00:28:36,960 --> 00:28:41,960 Speaker 4: significant level of sales because we've been seeing tractor sales 506 00:28:42,040 --> 00:28:46,760 Speaker 4: take up around seventy percent of electric truck sales in China. 507 00:28:46,840 --> 00:28:50,440 Speaker 4: So to give some context, in the past couple of quarters, 508 00:28:50,480 --> 00:28:53,640 Speaker 4: the electric heavy duty trucks sales in China have been 509 00:28:53,720 --> 00:28:57,520 Speaker 4: around forty thousand, and it was fifty three thousand in 510 00:28:57,560 --> 00:29:01,240 Speaker 4: the third quarter this year alone, and percent of that 511 00:29:01,600 --> 00:29:06,000 Speaker 4: was tractors, which means electric tractor sales were thirty eight 512 00:29:06,040 --> 00:29:10,040 Speaker 4: thousand in that period in China alone. They also take 513 00:29:10,120 --> 00:29:13,520 Speaker 4: up twenty five percent of the total tractor sales during 514 00:29:13,520 --> 00:29:17,480 Speaker 4: the third quarter, so that's quite a high sales share. 515 00:29:17,760 --> 00:29:20,320 Speaker 1: So as we go through this, maybe you could each 516 00:29:20,400 --> 00:29:23,800 Speaker 1: share what your fun fact is on this space that 517 00:29:23,960 --> 00:29:26,640 Speaker 1: you're most excited about, because for me, I started the 518 00:29:26,680 --> 00:29:29,960 Speaker 1: show being really excited about that fact that you just 519 00:29:30,000 --> 00:29:34,080 Speaker 1: shared around tractors and how well they have adopted this additionally, 520 00:29:34,120 --> 00:29:36,120 Speaker 1: so I'm going to pick two. The second one is 521 00:29:36,160 --> 00:29:38,240 Speaker 1: that in some parts of the world you end up 522 00:29:38,320 --> 00:29:43,240 Speaker 1: seeing electrification in passenger vehicle fleets. Yes, it is different 523 00:29:43,280 --> 00:29:46,560 Speaker 1: by country, but it is particularly stark when you look 524 00:29:46,600 --> 00:29:49,920 Speaker 1: at trucking and how much China has adopted this and 525 00:29:49,960 --> 00:29:52,120 Speaker 1: how you see it in little more spotty in other 526 00:29:52,160 --> 00:29:53,920 Speaker 1: parts of the world. So when you look at charts 527 00:29:53,920 --> 00:29:56,000 Speaker 1: and you see these kind of colors in certain parts 528 00:29:56,040 --> 00:29:59,040 Speaker 1: of the world light up, it is a much clearer 529 00:29:59,080 --> 00:30:01,640 Speaker 1: story where you have certain areas that are on board 530 00:30:01,680 --> 00:30:04,120 Speaker 1: and other areas that maybe just haven't woken. 531 00:30:03,880 --> 00:30:04,600 Speaker 2: Up to this yet. 532 00:30:04,720 --> 00:30:06,760 Speaker 1: What are the things that are kind of that stand 533 00:30:06,800 --> 00:30:09,960 Speaker 1: out most to you in the research pieces that we're 534 00:30:10,000 --> 00:30:12,480 Speaker 1: talking about today and kind of nerd out for me 535 00:30:12,560 --> 00:30:13,440 Speaker 1: for a moment. 536 00:30:13,600 --> 00:30:16,320 Speaker 4: I think being able to use batteries and trucks. I 537 00:30:16,360 --> 00:30:20,040 Speaker 4: am quite excited about the different business models that are 538 00:30:20,200 --> 00:30:24,800 Speaker 4: emerging to support the decarbonization of the heavy duty segment, 539 00:30:24,960 --> 00:30:28,360 Speaker 4: like how the economics could potentially work with more of 540 00:30:28,360 --> 00:30:31,600 Speaker 4: these truck as a service or battery as a service 541 00:30:31,760 --> 00:30:34,960 Speaker 4: models where the ownership of the battery is separate from 542 00:30:35,000 --> 00:30:37,960 Speaker 4: the ownership of the vehicle in order to reduce the 543 00:30:38,120 --> 00:30:43,160 Speaker 4: upfront cost. It's like these different potential like financing solutions 544 00:30:43,160 --> 00:30:46,360 Speaker 4: that are quite interesting. And also the potential of using 545 00:30:46,480 --> 00:30:50,040 Speaker 4: these trucks as an energy asset, even though it's quite 546 00:30:50,120 --> 00:30:53,160 Speaker 4: early stage at the moment, and sort of to combine 547 00:30:53,280 --> 00:30:57,760 Speaker 4: different like renewable energy sources to refuel the trucks, not 548 00:30:57,920 --> 00:31:00,880 Speaker 4: just refuelling them recharging them through the regular grid, but 549 00:31:01,040 --> 00:31:04,600 Speaker 4: using renewable power to recharge these vehicles, I think is 550 00:31:04,960 --> 00:31:08,520 Speaker 4: very exciting. And also how we're seeing some really big 551 00:31:08,720 --> 00:31:12,719 Speaker 4: charging stations cropping up in places of course like China, 552 00:31:12,920 --> 00:31:15,400 Speaker 4: like we recently saw a site that's planned to be 553 00:31:15,640 --> 00:31:19,239 Speaker 4: one hundred megawatts for truck charging and half of that 554 00:31:19,320 --> 00:31:21,360 Speaker 4: has already been brought online this year. 555 00:31:21,800 --> 00:31:26,440 Speaker 1: So mainly in NERNS out on business models and charging infrastructure, Mikael. 556 00:31:26,440 --> 00:31:30,360 Speaker 3: I'm mostly looking forward to see how the competitive landscape 557 00:31:30,360 --> 00:31:33,840 Speaker 3: for manufacturers develops. We have seen some very interesting things 558 00:31:33,840 --> 00:31:38,600 Speaker 3: in China where manufacturers but not traditional truck manufacturers, account 559 00:31:38,640 --> 00:31:41,120 Speaker 3: for a large share of the electric truck market. In 560 00:31:41,160 --> 00:31:43,640 Speaker 3: Europe and the US, who haven't seen a lot of 561 00:31:43,720 --> 00:31:48,000 Speaker 3: those competitive dynamics developed yet, the contenders are not there 562 00:31:48,160 --> 00:31:50,160 Speaker 3: the same way that they were for passenger cars. Some 563 00:31:50,240 --> 00:31:52,240 Speaker 3: of them tried to make it to work. They didn't 564 00:31:52,280 --> 00:31:54,880 Speaker 3: manage who had quite a few back groupies. So I'm 565 00:31:54,920 --> 00:31:57,080 Speaker 3: trying to see how the you know, like the different 566 00:31:57,120 --> 00:31:59,920 Speaker 3: manufacturers will will enter the market, what their business stry 567 00:32:00,160 --> 00:32:03,360 Speaker 3: are going to be, and whether any contender, any startup 568 00:32:03,440 --> 00:32:05,800 Speaker 3: I mean maybe startup or existing company is going to 569 00:32:05,800 --> 00:32:08,040 Speaker 3: come in and try to append the market in some way. 570 00:32:08,080 --> 00:32:10,320 Speaker 3: I mean, there are definitely opportunities there. 571 00:32:10,520 --> 00:32:13,600 Speaker 1: Thanks so much for sharing your insights today, guys, Nico 572 00:32:13,840 --> 00:32:15,000 Speaker 1: many great having you here. 573 00:32:15,240 --> 00:32:16,800 Speaker 4: Thanks, Dana aut pleasure to join. 574 00:32:17,120 --> 00:32:24,920 Speaker 3: Great to be here, Dana. Thanks. 575 00:32:27,240 --> 00:32:30,360 Speaker 1: Today's episode of Switched On was produced by Cam Gray 576 00:32:30,600 --> 00:32:34,280 Speaker 1: with production assistance from Kamala Shelling. Bloomberg NIF is a 577 00:32:34,320 --> 00:32:37,440 Speaker 1: service provided by Bloomberg Finance LP and its affiliates. This 578 00:32:37,560 --> 00:32:40,239 Speaker 1: recording does not constitute, nor should it be construed as 579 00:32:40,280 --> 00:32:44,200 Speaker 1: investment advice, investment recommendations, or a recommendation as to an 580 00:32:44,240 --> 00:32:47,440 Speaker 1: investment or other strategy. Bloomberg ANIF should not be considered 581 00:32:47,440 --> 00:32:50,760 Speaker 1: as information sufficient upon which to base an investment decision. 582 00:32:50,840 --> 00:32:53,840 Speaker 1: Neither Bloomberg Finance LP nor any of its affiliates makes 583 00:32:53,840 --> 00:32:57,600 Speaker 1: any representation or warranty as to the accuracy or completeness 584 00:32:57,600 --> 00:33:00,640 Speaker 1: of the information contained in this recording, and any liability 585 00:33:00,640 --> 00:33:03,320 Speaker 1: as a result of this recording is expressly disclaimed.