While Elon Musk continues to make bold predictions about the Telsa Electric Semi Truck, Navistar CEO, Troy Clarke has delivered a message to the tech entrepreneur, saying there will be more electric trucks with a Navistar badge on the road by 2025 than semi-tractors from Musk’s Tesla.
It is a bold prediction from Clark but one that many automotive analysts believe could be true.
Clark believes it’s all about familiarity, comfort and established customer base. Navistar’s International brand already holds 11 per cent of the market for trucks in the heavy Class 8 segment.,.
Tesla, which unveiled its semi last November, is already holding hundreds of order reservations for the Semi, but it has yet to build a truck for a customer.
“Customers know us and they know that when we give them a truck it gives them a guarantee that this truck is going to serve their needs, because we understand how our customers make money,” Clarke said.
Navistar is currently developing an electric truck with help from its major shareholder, Volkswagen Truck & Bus.
The German company currently owns 17 per cent of Navistar and has stated it wants to increase its shareholding in the US truck maker as its main beachhead for a push into the heavy truck market in America.
The two companies have a broad agreement to work together on vehicle development, new engines and purchasing to take advantage of volume discounts.
Navistar says it expects to have electric powered medium duty trucks and buses ready to launch late next year or in early 2020.
Stephen Inc. analyst, Brad Delco says Clarke’s comment ‘is not that outlandish a claim’.
“Navistar like all major truck manufacturers has an established network of dealers nationwide to service the product and more importantly the customer who is using that product to earn a living,” said Delco.
“For these customerstime is money.” he added.
Tesla sells its passenger cars direct to consumers via its own stores and it will have to build service centers for its trucks or contract a third party to provide maintenance services.
There are 110 Tesla stores in the U.S. while truck market leader Freightliner, by comparison, has more than 100 dealerships in the Southeast alone.
‘With established brands such as International, Peterbilt, Kenworth and Freightliner, if something goes astray, those trucks get pulled into their dealerships to get fixed immediately, particularly when under warranty,” said Delco.
Proximity to a dealership can make a big difference in how much income gets lost during a breakdown. Although it is new technology, there looks to be a crowded market for trucks with electric powertrains.
Legacy manufacturers, including Freightliner, Western Star, Kenworth and even Toyota along with traditional diesel engine manufacturer Cummins are all also working on the zero-emission commercial vehicle technology.
There’s also a question of where the Tesla electric truck and similar vehicles from competitors fit into the trucking industry.
Tesla models will come with two ranges, 480km and 800 km, depending on the size of the battery. Rival trucks are expected to have ranges of as little as 160km, depending on the vehicle.
The absence of a sleeper berth rules out irregular over-the-road routes, Delco said. Line haul routes between hubs run on average just over 800 km per day in the USA.
“Since drivers are not going to push to the edge of their vehicle’s capacity, any electric vehicle would need to last more than 800 km to make it a viable option,” he said.
Delco contends that local pickup and delivery work in the USA . generally uses older trucks that have been rotated into the shorter local routes after new vehicle warranty has run out to be closer to terminals in case they break down.
He argues that the economics of buying new electric vehicles for those routes does not make sense for the industry as it works today.
Despite all this many in the industry are taking Tesla’s truck seriously.
The Palo Alto, California based electric vehicle builder has trial orders from companies such as J.B. Hunt, Sysco, PepsiCo, Anheuser-Busch, Walmart and UPS.
Antti Lindstrom, the trucking industry analyst at IHS Markit, said he is waiting to see if Tesla trucks can deliver on their promised range.
“While we’re waiting for that to happen, the most realistic application are those local runs, like from the ports in California to an inland distribution point,” Lindstrom said.
“More achievable in a shorter timeline would be a combination of battery electric with hydrogen fuel cell technology,” he said.
“Toyota is testing a class 8 fuel cell semi in Southern California while Kenworth is also working on a Class 8 fuel cell semi.
Nikola Motor Co. has received more than 8,000 reservation orders for its hydrogen fuel cell Class 8 sleeper and day cab models which it says will be be built and on the road by by 202. Major US component maker Wabco Holdings invested $AUD16 million in the Niokola Company last month
Lindstrom said that carriers are placing orders with multiple manufacturers for alternative fuel vehicles, like Nikola.
“Some of the other players might not make as much noise, but everybody is in the same boat,” he said. “Tesla is still basically securing financing right now.”
Given the early stage of the technology, he said, “at this point it’s anybody’s guess who will survive or who will be dominant in the future. Companies are hedging their bets, and they want to do their internal comparisons.”
Delco also said that UPS has made the largest Tesla order to date with 125 trucks. That’s still just a tiny percentage of the 200,000 new trucks purchased every year industry-wide in the USA. Companies such as Navistar regularly sell 1000 trucks per order to major fleets.