America | Energy | Europe | Sustainable Finance & Economics

Why Electric Cars Are Only Half the Battle in the EV Transition (Part 1)

The race to electrify transportation is intensifying, with Norway setting the pace in electric vehicle (EV) adoption, boasting over 92% of new car sales as electric. Meanwhile, the U.S. lags significantly behind, with just 7.6% of new cars being EVs in the same period. But as the focus remains on passenger cars, a critical segment often goes unnoticed: heavy trucks, buses, and vans. These vehicles are major polluters, and electrifying them presents a daunting yet essential challenge. Norway’s ambitious goal to make all new trucks electric by 2030 showcases the country's commitment, backed by substantial investments in charging infrastructure. However, achieving this transition requires overcoming significant hurdles, including high costs, grid capacity, and the development of a widespread charging network. This article delves into the complexities of electrifying medium and heavy-duty vehicles (MHDVs) and highlights why trucks matter just as much as cars in the journey towards a greener future.

Why should we care about trucks?

The disparity between countries investing in electric vehicle (EV) adoption and those lagging behind is increasing. Norway leads global EV adoption, with approximately 82% of new car sales in 2023 being EVs, as reported by the Norwegian Road Federation. In contrast, the United States recorded only about 7.6% of new car sales as EVs in the same period. Even China has outpaced the U.S., with 24% of new car sales in 2023 being EVs.

Norway’s success can be attributed to a consistent and dedicated government program supporting EV adoption through funding and incentives since the 1990s. Early investments in charging infrastructure have significantly alleviated consumer concerns regarding the range capability of EVs, promoting broader acceptance and adoption.

There is a critical segment of vehicles that often goes unnoticed in discussions: heavy trucks, school buses, and vans. These vehicles are prevalent in the U.S. and Latin American countries. Public transportation in Mexico, predominantly fuel-powered, is estimated to contribute to 80% of the nation’s pollution due to outdated technology, insufficient upgrades, and lack of regulatory controls. Vehicles exceeding 4,536 kg (10,000 pounds) are classified as medium and heavy-duty vehicles (MHDV). These vehicles are significant emitters of greenhouse gases (GHG) and other hazardous air pollutants, including nitrogen oxides and volatile organic compounds. In the U.S., although they represent a small fraction of on-road vehicles, MHDVs account for 59% of ozone and particle-forming nitrogen oxide emissions and 55% of particulate pollution. They emit up to 417.1 million metric tons of CO2 annually, with projections indicating a continued increase. For governments to fully decarbonize the transportation sector, Lohawala & Spiller (2023) argue that substantial grid investments are necessary to incentivize transportation companies to adopt MHD EVs voluntarily, equitably, and cost-effectively.

MHD EVs require substantial energy for charging, which demands adequate generation capacity to handle peak demand and avoid power outages. The large battery sizes of MHD EV fleets can exceed the capacity of an average stadium, necessitating significant investments in the electrical distribution grid to manage these loads effectively.

To meet this demand, a combination of building more generators and utilizing renewable energy sources is essential. However, renewable energy has its challenges: it is not controllable and can be shut down during periods of low demand and high generation. Expanding transmission lines from renewable sources is crucial for making MHD EV charging environmentally friendly. For example, wind turbines are often located far from cities, and the interconnection queue for new transmission and power projects has grown significantly in recent years.

This indicates that new generation sources are needed, alongside addressing high transmission costs and site approval challenges for renewable energy generators to connect to the grid. It is estimated that up to 1,350 GW of renewable, nuclear, and energy storage capacity are still seeking transmission access and that in order to electrify long-haul trucks in the US, total current generation would need to increase by 5% (Tong et al., 2021).

Current options for charging MHD EV fleets in metropolitan areas such as New York include utilizing spare railyards or defunct malls. The strategy leverages underutilized capacity during periods of low demand to power these fleets. However, space is limited and scarce in many cities. Additionally, major grid systems often face constraints on available kilowatts. In New York City, for instance, charging stations are limited to 200 kW, which is significantly less than what a small fleet requires.

Investments in feeder circuit systems—components that transport electrical power from substations or distribution points to consumers—or substations, which manage and adjust power before it reaches homes and businesses, are needed. Effective planning and demand forecasting from MHD EV fleets are essential to justify these investments.

This leads to the “chicken-and-egg” problem: how can we justify investments in distribution grid upgrades without knowing the future demand for MHD EV charging? This critical policy analysis must be conducted at regional, state, and national levels.

Supply Chain Management plays a crucial role in managing the costs associated with Medium and Heavy-Duty Electric Vehicles (MHD EVs). The charging speed of these vehicles must be strategically determined, considering factors such as fleet size, shift duration, and dwell time (time spent parked). The flexibility and adaptability of the fleet, along with the availability of public MHD EV charging stations—which are currently quite limited in the US—will influence the viability of the investment.

For instance, the cost of installing direct current fast chargers can reach up to USD 175,000 per unit, whereas level 2 chargers can be as affordable as USD 2,500 per unit. Additionally, peak electricity demand charges must be considered, as high amounts of electricity need to be accessible from the grid to the consumers.

As previously mentioned, Norway is a leading country in passenger EV adoption. However, in the MHD segment, only 2% of trucks on Norwegian roads are electric. Electric trucks account for 10% of new truck sales, a trend bolstered by government policies aiming for 100% of new truck sales to be electric by 2030. Norwegian public-private investments amounting to approximately USD 5.5 million include funding the development of 19 charging stations, with a total of 108 chargers, along four primary transportation routes for heavy cargo: Oslo-Svinesund, Oslo-Stavanger, Oslo-Bergen, and Oslo-Trondheim. This project is expected to be completed by spring 2025 and will enable electric trucks to drive longer routes and exceed current transportation mileage expectations.

In the next article, we will discuss expert-proposed solutions to overcome the aforementioned MHD EV adoption challenges, which include managed charging, vehicle-to-grid technology, co-located storage and solar, and battery swapping. I would like to acknowledge the work of Lowala and Spiller (2023) for their findings published in Economics of Energy & Environmental Policy, which significantly contributed to this article.

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