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On the Road Ahead
The Road Ahead
Will Truck Sales Lead the Anticipated EV Surge in 2021-2022?
BY BRUCE CAMERON, BLACK PRESS CONTRIBUTOR
With California recently announcing that it will move to 100 per cent electric vehicles by 2035, and BC talking about a target date of 2040, the writing is on the wall for new car sales: they will be increasingly electric.
The transformation of the automotive industry from combustion engines to EVs is well on its way in North America, and BC is leading the way. The provincial government trumpeted the fact that at the end of 2019, BC led all North American jurisdictions in terms of per capita EV sales.
Yet despite the trendsetting pace of EV sales in BC, accounting for nine per cent of all light-duty vehicle sales—ahead even of California at eight per cent—by far the biggest and most lucrative segment of the market is truck sales.
In fact, recent Statistics Canada data confirms that truck sales have steadily increased as a percentage of vehicles sold, rising by 3.6 per cent since 2017. Truck sales, including light and heavy trucks, SUVs and minivans, account for an even bigger share of overall revenue for the industry, rising from 76 per cent of new vehicle revenue in 2017 to 81 per cent by 2019. So if the much-anticipated surge of EV sales is to actually materialize, it will have to occur in the lucrative truck segment of the market.
The current trajectory of truck sales, combined with the rise in demand for EVs, is creating a perfect storm that will transform the industry much more quickly than many people think. Changes in EV technology will have a more dramatic impact on accelerating the trend toward EV purchases than the government incentives that initially kickstarted the industry. Many of the old objections preventing people from buying EVs, particularly EV trucks, are quickly toppling.
The restricted range of many early EV entrants is a fading concern, as investments in charging infrastructure are being made all over North America, and as private companies begin to provide charging for their own truck fleets. Power and torque are also hurdles once thought insurmountable for an EV truck, but a recent publicity stunt by Ford went a long way towards addressing that objection: the electric Ford F-150 (available mid-2022) towed a massive freight train loaded with 42 traditional F-150s.
Not only are established companies like Ford and GM committing huge resources to produce EV trucks, their costs for electric batteries are dropping quickly. Bloomberg noted that battery prices per kilowatt-hour have dropped by 87 per cent in a decade.
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And upstart entrants like Tesla, Rivian, Nikola and Lordstown (all of which have new trucks they are moving into production) will benefit from even further reductions in battery costs in 2021 and beyond.
As it becomes possible to create EV trucks with considerable power at a reasonable cost, these start-ups are increasingly entering into partnerships with established companies like GM (that just bought an 11 per cent stake in Nikola, which is producing the Nikola Badger) and Amazon (that invested $700 million in Rivian, which is making the R1T truck and R1S SUV). There indeed seems to be an automotive renaissance driven by the nascent demand for EV trucks.
Of course, there will be bumps in the road ahead, including the decline in sales and revenues due to the COVID-19 crisis in 2020. But the biggest hurdles EV truck makers face is keeping up with demand. According to a recent Canadian Press story, there was a drop in sales of EVs in 2020 that was mainly attributed to temporary battery shortages. That could explain why Tesla is moving so aggressively to manufacture its own batteries, and aiming to produce an EV in 2022 that will cost about $25,000 USD. The array of new EV trucks is as intriguing and diverse as any lineup of vehicles seen in the past decade. Established companies are rolling out:
The GMC Hummer EV SUT The electric F-150 from Ford
Relatively new start-ups have introduced several fascinating entrants:
Tesla’s futuristic Cybertruck The Rivian truck (R1T) and SUV (R1S) Lordstown Endurance (made in a former GM plant) Nikola Badger (which GM just bought into in September 2020) The exotic and expensive Bollinger B2 It will be ironic in the extreme if large, hulking vehicles like the Hummer (or reinvented big iconic models like the F-150) lead the way in terms of making the EV revolution a reality in the next few years. It’s not far off. According to the Canadian Press, Toyota Canada’s vice president Stephen Beatty said that his company expects that 40 per cent of its sales will be electric by 2025. The pace of the coming shift to EV trucks will surprise people—almost as much as an electric Ford F-150 towing a freight train.
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