Daimler’s global truck boss Martin Daum says that the cost of building a battery-powered truck will “forever be higher” than a combustion engine equivalent, as the war in Ukraine has accelerated an already rapid increase in the price of crucial commodities.
In making the warning Daum indicated that if battery prices remain too high Daimler may look to veer more towards a hydrogen fuel cell strategy, and away from its split battery electric and hydrogen plan.
“If you take the entirety of engine, transmission, axle, tank system, cooling, we have a maximum of about €25,000($AUD35980) of material in a combustion engine truck,” Daum, said in an interview with the Financial Times.
“How much battery do you get for €25,000? Even if battery costs fall to around €60 ($AUD86) per kilowatt hour, and I need 400 kilowatt hours, then I need €24,000 (around $AUD 34500) alone for the battery cells in a single truck”.
Daum added that it would be up to governments to make up the difference, using whichever mechanism they choose.
“Without any subsidies the price of an electric]truck will always, forever be higher than an internal combustion engine truck.”
Daimler Truck was an early entrant into the electric market and has been manufacturing battery-powered trucks since 2017.
It reported that it had more than tripled the sales of zero-emission trucks and buses last year, but that still only accounted for a total of 712 vehicles. That accounts just a fraction of the 455,000 trucks and buses Daimler delivered in total in 2021.
Its long-haul eActros model, which went into series production last year, still costs three times the price of its combustion engine equivalent, and that gap is unlikely to narrow significantly in the near future.
The cost of the key raw materials used in modern batteries has risen sharply over the past year, with cobalt and lithium more than doubling in price, and nickel climbing by almost 40 per cent, according to IHS Markit.
As a result, battery pack prices, which fell to an average of $AUD172 per kilowatt hour in 2021, according to a survey conducted by BloombergNEF, are predicted to remain above the $100 level until at least 2024.
Daum, like other industry chiefs, has called for a tax on carbon to narrow the cost disparity between combustion engine trucks and battery-powered models.
The Daimler boss said that he nonetheless supported efforts by the German government to help businesses deal with soaring diesel costs.
“We have to raise the price over time, we can live with two or three euros per litre, but we can’t live if that comes overnight, said Daum.
“Daimler Truck has a longstanding strategy to pursue both battery-powered and hydrogen trucks, but may focus more on hydrogen if battery costs continued to soar, and commodities remained scarce,” Daum added.
“In the fuel cell, we have far less rare raw material and we don’t compete with millions of passenger cars for the same material,” he said.
Daum praised German economics minister Robert Habeck for signing an agreement with Qatar last week for the delivery of hydrogen, as well as for the supply of liquid natural gas.
However he criticised Euro anti-trust authorities in Brussels for dragging their feet when it comes to approving a joint venture between Daimler and its key competitors Volvo, which will spend around $AUD1 billion (€500million) on developing a network of 1700 truck charging points in Europe.
“We are ready to invest the money and we have someone ready to take over the chief executive role and she can’t do it because we don’t have the approval, it should have been done three months ago and we should have been up and running operationally,” Daum said.