Paccar global CEO Preston Feight has outlined his company’s strategy to build battery-electric and hydrogen fuel cell Kenworth and Peterbilt trucks during a recent conference call with industry analysts and investors.

Rivals such as Freightliner and Volvo are starting to deploy electric trucks and have announced plans for commercial production. Feight explained to financial journalists during a conference call  to discuss Paccar’s second quarter earnings report, that the truck builder has its own robust strategy.

Paccar CEO, Preston Feight

Paccar has proven resilient in the face of the Covid-19 pandemic recession and while earnings and revenue took a drive, the company remained profitable and Feight explained the business started to rebound in June.

Paccar’s global second quarter profit was $US147.7 million, a 76 per cent decline on the same period a year ago. Revenue fell 54 per cent to $US3.06 billion compared to $US6.63 billion in the same quarter a year earlier.

Feight explained that to date, Paccar has deployed more than 60 battery-electric, hybrid and hydrogen-powered trucks, while Paccar’s European subsidiary, DAF Peterbilt and Kenworth have battery electric vehicles operating in North America and Europe. These vehicles are currently placed with customers in local and regional delivery, refuse collection and port applications.

“We expect that these customer segments will be the first to adopt battery electric technology because they typically operate in the city and return home every day for recharging,” Feight explained.

Paccar has said it will begin production of battery-electric trucks next year and expects that volumes will grow gradually as the cost of batteries decreases, charging infrastructure is expanded and regulations drive customer adoption of these technologies.

Paccar is also developing hydrogen fuel cell-powered vehicles and has built 10 Kenworth T680s for customers in the Port of Los Angeles. In the longer term, hydrogen could be promising for long-haul applications, due to its high energy density and its relatively fast refuelling times.

We have a three-prong strategy for zero emission trucks,” Feight said.

“First, we have to have the technologies, and that can be battery-electric and hydrogen fuel cells as they come down the line, so one element is just being aware of the technology and having it on vehicles,” he said.

“The second element that’s going to be critical is having good distribution when it comes to market, a dealer network that works really well. Paccar obviously is very proud of our relationship with our dealers… having the ability to sell and support, take care of our customers, that’s a big deal,” he continued.

“The third part of being able to have electric vehicles or hydrogen fuel cell vehicles is that you have to have flexible manufacturing capability so that you can combine not just zero emissions but clean diesel technologies and run them down the same line, so you can maintain efficiencies and be profitable in that way, and in Paccar’s case, we have actual factories that exist and can build vehicles,” Feight continued.

“We mentioned in our disclosures that we have 10 trucks that we’re putting into operations in the ports of Los Angeles, which happen to be Kenworth T680s, but we have a global approach to technology and we can use DAF, Kenworth and Peterbilt to leverage each other’s capabilities.

“So it’s where we’re starting right now, but they can be applied in Europe when the time is right,” he added.

“Some of the trucks that we’ve put into the ports are already gathering miles and our partnerships with Toyota as a fuel-cell provider and Shell as a hydrogen provider which are going well,” said Feight.

“The time to production and commercialisation, has a cost element to it which is in play. Hydrogen is currently $US12 or $US13 per kilogram, and for it to be really efficient from a commercialisation standpoint, it needs to be in the $US2 or $US3 per kilogram range,” he said.

“There needs to be infrastructure put in place and then the cost of fuel cells needs to come down, we don’t see that as something that is a near-term commercialisation prospect,  we see this as a five-year to 10-year kind of a window. We do think there’s a lot of long-term promise for hydrogen, but it’s a long-term promise,” Feight added.

Feight said that in terms of different configurations of zero-emission for North America and Europe, it’s early days on the technologies as far as their readiness for commercialisation.

“The most important thing for us is to be abreast of, involved with and partnered with great companies and watching how it develops,” he said.

“There will be some invention, there will be some cost downs during the coming few years and our goal is to make sure that we’re in a position to provide our customers the lowest operating cost vehicles, whenever the market is ready for them and  when there is infrastructure, when there is regulation and when the technology is ready,’ he said.

“We feel like we’re on top of it and we’re focused on a plan that is actionable and buildable,” he added.

Feight indicated the sales model for the Paccar electric trucks that come online next year could revolve around either a leasing model or a purchase situation, or both.

“PacLease, as you know, has a great leasing operation, so we can run them through PacLease, and we can also have the customers purchase them,” he said.

“When we bring something to market, we have confidence in its performance and we do with the electric vehicles”.

“The price point obviously at the stage of the development next year, will be higher than diesel, but I think people are interested in seeing what that technology feels like in their fleets,” said Feight.


“Obviously we have regulations coming around 2024-25, where some markets will need electric vehicles, which is what is going to bring some gradual increase in demand, so we’re developing trucks for both Europe and North America in 2021.

“From a demand and a flexible manufacturing viewpoint, it is really important to note that Paccar’s factories build to order, they are custom trucks that can be configured with various displacements of diesel engines or different numbers of axles,” he underlined.

“Our teams do a great job of being able to integrate different designs onto our main assembly line, which is one of the real core talents that Paccar has, so electric vehicles will be the same kind of thing,” said Feight.

‘We will be mounting them on our lines, whether it’s the batteries or the electric motors, and we have flexible lines that can accommodate that in low and high volume, so, we’re prepared”.

“It’s nice to have actual factories that are able to build trucks, and we can do that today and we’ll be able to accommodate all the demand in the future,” he added.

“In regards  to the time frame for advanced powertrains and autonomous trucks, I think the key to keep in mind is the customer at the end of the day is interested in the lowest total cost of operation,” he said.

“That’s what the trucking companies like to consider, that’s what they’re trying to deliver, and they will use zero-emissions vehicles, whether they’re battery-electric or hydrogen fuel cells, to do that,” he added.

“What we do is evaluate those technologies, develop those technologies and bring them to market as soon as they’re ready, and commercially they’re the right answer, or regulations ask us to bring them to market”.

“We are always making those strategic decisions about which way things will go, we continue to develop zero-emission vehicles while developing clean diesel at the same time because that’s going to be the primary motive power for the coming years.

Feight says  that autonomy is a great technology and that Paccar has strong partnerships with a lot of autonomous vehicle companies but roll out depends on  customer demand.

“We have developed autonomous vehicles, and if you look around at the space, you’ll see that a vast majority of the vehicles that are operating in trials are Peterbilts, Kenworths and DAFs, but we’ll watch that technology and when it’s ready, we’ll bring it to our customers,” he concluded.