Battery-electric trucks set to revolutionise global transportation by 2030

Regulatory mandates push electrification

A major force behind the rise of battery-electric trucks is tightening government regulations. For instance, the European Union has set strict targets for reducing emissions, requiring truck manufacturers to cut fleet emissions by 45% by 2030 and an ambitious 90% by 2040. These mandates have spurred original equipment manufacturers (OEMs) into action, leading to the release of early-generation BETs.

Most of these initial models were built on passenger car technology, which allowed companies to test the waters with pilot projects. But as the market evolves, it’s clear that BETs will need more specialised designs to meet the specific demands of trucking. The next wave of electric trucks will require platforms that can cater to a wide range of uses, from short-haul deliveries to long-distance freight transport.

Innovation is key for competitive advantage

Technological innovation will play a critical role in determining which manufacturers succeed in the battery-electric truck space. According to the study, three key areas will differentiate companies in the coming years: battery range, cost reduction, and faster charging.

Battery technology, in particular, is vital. Right now, the battery is the single largest cost factor in a BET’s total cost of ownership (TCO), making them more expensive upfront than traditional diesel trucks. However, advancements in battery chemistry and production methods—especially in lithium iron phosphate (LFP) technology—are expected to drive down costs. LFP is becoming increasingly important due to its affordability and improved safety compared to other battery types.

Beyond the battery itself, manufacturers will need to optimize electric drivetrains and charging systems to boost efficiency and reduce downtime. The success of electric trucks depends not only on the trucks themselves but also on the infrastructure that supports them. Collaboration between the automotive, energy, and logistics sectors will be essential to develop charging networks and improve overall efficiency.

Total cost of ownership: Long-term benefits

One of the core findings of the 2024 Truck Study is the clear long-term financial advantage of BETs. While the initial investment in battery-electric trucks is higher than their diesel counterparts, they offer significant savings over time. By 2025, BETs are expected to provide better TCO for high-mileage and payload-sensitive operations, such as long-haul freight or urban delivery services.

Energy costs are a big part of this equation. Electric trucks are much cheaper to operate than diesel vehicles, assuming efficient use of charging infrastructure. However, the price of charging can vary significantly based on the type of infrastructure and its location. Efficient planning around charging times and locations is crucial to maximising the cost benefits of BETs.

Looking ahead, by 2030, more than 20% of transportation is expected to be electrified. Heavy-duty trucks and urban buses will be among the first to embrace this shift, driven by the lower operating costs and regulatory incentives. By 2040, electric trucks are projected to dominate the market, accounting for as much as 90% of new truck sales.

The electrification tipping point

Strategy& forecasts that the truck market will reach a tipping point by 2030, when battery-electric trucks will become mainstream. This shift will be fueled by stronger emissions regulations, lower energy costs, and growing awareness of the environmental benefits of electrification.

By 2030, the global demand for batteries in the truck sector is expected to surpass 400 gigawatt-hours (GWh). This figure is projected to grow to over 1.700 GWh by 2040, reflecting the increasing adoption of BETs. Lithium iron phosphate (LFP) technology will play a growing role in meeting this demand due to its cost efficiency and enhanced safety features.

Challenges to overcome

While the outlook for battery-electric trucks is optimistic, several challenges remain. The upfront cost of BETs is still higher than traditional trucks, largely due to the cost of the batteries. To address this, new financing models are needed. Leasing options, for example, could help lower the entry barrier for fleet operators, reducing the financial risk associated with purchasing expensive BETs.

Another challenge is the development of a robust charging infrastructure. Both public and private investments are necessary to expand the charging network, especially for long-haul routes. Efficient logistics operations will also be key to ensuring that trucks are charged and ready to go when needed, minimising downtime.

Finally, regulatory stability is crucial. A clear and consistent regulatory framework will encourage long-term investments in electrification. Companies need to know what to expect from future regulations in order to plan effectively and commit to fleet upgrades.

Strategic recommendations for a smooth transition

To ensure a successful transition to battery-electric trucks, Truck Study 2024 offers several strategic recommendations:

1. Innovative financing models: Developing new financing solutions, such as leasing or shared ownership, can help lower the initial investment costs for BETs. OEMs, suppliers, and logistics providers should work together to create options that are financially viable for businesses of all sizes.
2. Stable regulatory framework: Governments need to provide clear, stable regulations to support the electrification of the trucking industry. This will encourage long-term investments in infrastructure and fleet transformation.
3. Leasing over purchasing: Offering competitive leasing models can help reduce the financial burden on companies that are hesitant to invest in BETs. Understanding battery life cycles and second-life opportunities will help manage the risks associated with depreciation.
4. Infrastructure investments: The development of both public and private charging infrastructure is critical. Significant investment in depot and on-route charging facilities is needed to ensure that electric trucks can operate efficiently, especially in regions with high traffic or long-haul demands.

Conclusion

The 2024 Truck Study makes it clear that the electrification of the truck industry is well underway. With regulatory pressures, technological innovations, and financial incentives aligning, battery-electric trucks are set to transform the logistics and transportation sectors in the coming decades. By 2030, electric trucks will become a common sight on roads worldwide, and by 2040, they are expected to dominate the market. However, overcoming challenges such as infrastructure development and upfront costs will require coordinated efforts across industries. The future of trucking is electric, and the next decade will be crucial in shaping this transformation.