Tricky transition

The lack of certainty about future plans for fuel infrastructure and taxation is proving a costly challenge for truck manufacturers. Steve Banner investigates

Will registrations of new non-zeroemission trucks come to a spluttering halt or show a last-minute surge prior to the UK government’s deadlines for ending their sale?

Come 2035 the axe will fall on models grossing at up to 26 tonnes and by 2040 there will be a complete ban on the sale of trucks running on fossil fuels.

According to Andrew Scott, UK head of electric mobility and product development at Renault Trucks, new diesels are unlikely to disappear from manufacturers’ catalogues prior to those dates, but the choice offered to customers looks set to be restricted.

It boils down to money. Truck makers do not have the resources to fund everything.

“Electricity and hydrogen are rightly seen as key fuels when it comes to decarbonising transport,” he observes. “However, manufacturers are having to make commitments to these new technologies at the same time as making massive investments to improve the fuel economy and reduce the CO2 emissions of the diesels that comprise the vast majority of their sales.

“Each future investment decision has to be made in the light of a manufacturer’s ability to recoup its costs,” Scott continues. “As a consequence, it seems likely that the range of diesel options available in the future will be less than it was previously.”

Says Iveco: “At the moment we do not plan to wind down deliveries of trucks equipped with internal combustion engines in advance of the deadlines, but some rationalisation of the portfolio could be considered depending on how demand evolves.”

The introduction of Euro-7 for trucks in 2027 will have a significant influence on the decisions manufacturers make. MAN wants to see a light-touch Euro-7, given that diesel will have a less important role to play than zeroemission technologies and the investment required to fund further developments in both will be huge.

But Scott is not anticipating arriving at a situation where it is suddenly no longer cost-effective to build diesels alongside trucks using other propulsion technologies.

“As far as Renault Trucks is concerned, we’re fortunate in having a wide range of manufacturing options,” he says. “For example, diesel, compressed natural gas and electric E-Tech D models are built on the same assembly line at our factory in Blainville in northern France.

“Each production site – and indeed the wider supply chain – continues to flex in line with changes in demand. The change in drivelines will evolve over time, as will our manufacturing facilities.

“We don’t expect a defined tipping point between diesel and electric/hydrogen solutions, but an ongoing move from one to the other as the economics of production and operation change along with legislation.”

Not surprisingly, sister brand Volvo takes much the same view.

Says a spokesman: “We already have a full range of electric trucks, which we’re selling and delivering today alongside our current diesel range.

“As the trucks are built on the same production lines, it’s pretty simple for us to build either.”

Scott doubts that there will be a big surge in registrations of diesel trucks prior to the legislative end dates, in the way that registrations of Euro-5 models rocketed prior to the introduction of Euro-6.

“The business case for zero tailpipe emissions will have become compelling for most operators in most applications prior to those end-dates, so there will be less of a spike than was the case with Euro-5,” he contends.

Major fleets especially will have planned their replacement cycles to avoid being caught out by cities emulating Oxford and introducing zero emission zones (ZEZs).

Scott does not believe that derv will simply become unavailable at the pumps, a view shared by Iveco. However, energy providers will be focusing on and investing in other sources of power, and there is the question of how heavily diesel will be taxed.

If the taxman comes down hard on every litre, then that will dent the appeal of diesel trucks and affect their second-hand value, with a roll-out of ZEZs restricting their use in some urban areas. “Any moves to road pricing according to CO2 emissions will also have a significant impact,” adds Scott.

Tax could indeed have a key role to play in shaping the market, agrees DAF Trucks UK MD Laurence Drake.

The government could decide to use the levers of VAT and duty to make diesel 10 times more expensive than it is now, with so-called green electricity becoming almost free, he suggests. At the same time, more and more cities may decide to roll out ZEZs.

If this situation arises, then diesel trucks will become far less appealing and demand will swing in favour of electric models, especially if they are heavily subsidised.

“With careful attention to incentives and favourable energy prices then we could see a gradual increase in battery electric uptake,” he says. “But we must have incentives that are progressive and enable operators to investigate and evaluate electric vehicles and consider how their businesses need to change for the future.”

While tax may threaten their viability, diesels will continue to operate for many years after the end-of-sale dates, Scott predicts: “Some will keep going up to 2050 or beyond if legislation allows it.”

Might Westminster relent and either scrap or significantly water down the 2035 and 2040 cut-off dates? Scott doubts it.

“While the government has asked the industry to identify suitable vehicle types for exemption, it seems

While the UK government has announced its intention to ban sales of all new diesel trucks from 2040 onwards, the EU had yet to clarify its position on the rules that will apply in member states at the time of writing. Europe’s truck makers have stated through their trade association, the European Automobile Manufacturers’ Association (ACEA), that all new trucks sold will need to be fossil-free by 2040 in order for the industry to reach carbon-neutrality by 2050.

MAN says that it supports the setting of binding interim targets for 2030 and 2035 to 2040 in the EU’s CO2 review. However, it points out that the existing targets are already demanding, and its backing for even tougher ones will depend on how rapidly an effective charging infrastructure for electric trucks is created.

It adds: “We do not support a complete ban on internal combustion vehicles by 2040.” It argues that there will still be trucks that will require this older technology, including those involved in heavy haulage, or operated by the military. It could be an option to power these vehicles by fuel from renewable sources such as HVO, biomethane or green hydrogen.

The company stresses that it is hugely committed to the roll-out of electric trucks for most applications. “From 2025 onwards we expect total cost of ownership parity for electric trucks compared with diesels,” it states. “As a consequence, we expect around 40% of long-distance truck sales and 60% of distribution truck sales to be electric by 2030.” likely that few if any will continue beyond the deadlines,” he says. “Despite this, we believe that a case can be made for solutions such as hydrogen combustion.

“It emits no CO2, but small quantities of NOx generated from the air drawn into the combustion process. We will continue to work through various industry bodies to provide the data to inform government policy.

“We see the diesel engine having a role in the transport mix for a considerable time where the conditions and/ or the demands of the vehicle’s operation make diesel the optimum solution,” says Scott. “We welcome and encourage the use of suitable low- or zero-carbon fuels in diesel engines to limit any negative consequences of the combustion process.”

REDUCED CHOICE: Andrew Scott, UK head of electric mobility and product development at Renault Trucks, predicts that the range of diesel trucks available will decrease as the ban on fossil fuels looms closer

Drake adds: “I think people will stick with diesel for as long as they possibly can.” If that is what buyers want, and assuming the tax burden on the fuel does not become unbearable, then it is a demand DAF will continue to meet.

If hauliers prove determined to hang on to diesel against the odds, then Scott’s prediction that there will not be a Euro-5-style cliff-edge spike in registrations just prior to the end of sales of diesel 26 tonners in 2035 could prove mistaken.

One senior industry executive suggests that manufacturers and operators could even investigate the possibility of getting 26 tonners plated at higher weights in a bid to circumvent the ban.

The difficulty for both truck builders and hauliers is the lack of certainty about what will happen, says Drake – and that makes forward planning extraordinarily difficult.

Exacerbating the uncertainty is the lack of a credible UK government plan when it comes to ensuring that publicly accessible charging facilities for heavy trucks are readily available. Iveco suggests that a shortage of charging points could be one factor that prompts a pre-deadline dash to secure new diesel models.

“Electric cars have been around for more than 10 years and we still haven’t got the charging infrastructure right, so how on earth are we going to get it right for trucks between now and 2035?” Drake wonders. “We need to have a road map that will tell us how many truck charging points will be available and when, and whether there is any intention to introduce overhead charging from catenaries.”

If there is, then that will affect the need for fixed en-route charging facilities.

“Government has given us the drop-dead sales deadlines but it still hasn’t given us an infrastructure plan,” he comments. “What on earth are we supposed to do?”

What does seem reasonably certain – assuming derv does not rocket in price or become unavailable – is that there will be a large diesel truck parc for some time after new sales are outlawed. “With registrations of trucks grossing at above 6 tonnes running at around 40,000 annually on average, it would take around 10 years to replace all of them with electric models,” Drake observes.

That does not necessarily mean that there will be a healthy demand for second-hand diesels though, as the appeal of zero-emission technologies steadily grows. Says Iveco: “The used market could remain strong in some areas, and for some applications, but that probably won’t last long.”

Iveco does aim to keep providing aftersales care for diesels after 2040 “in accordance with legal requirements”.

“While diesels are still in use, we will continue to support them,” agrees Drake.

MAN would like to see a light-touch Euro-7 as diesel becomes less important and investment focuses on zero-emission technologies