Zero-emission commercial vehicle sales grow, but adoption lags outside China

China leads the charge in zero-emission truck sales

China is far ahead in the adoption of zero-emission commercial vehicles. In the first half of 2024, more than 38.000 zero-emission trucks were sold globally. Remarkably, China accounted for over 80% of those sales, thanks to its well-established battery supply chain and government support for clean vehicle technologies. This translates to nearly 5,5% of all new trucks sold in China being zero-emission, a figure that far outpaces other regions.

China’s dominance in the market is driven by several key factors. First, battery prices in China are the lowest worldwide, hovering around $100 per kilowatt-hour, due to the country’s large-scale production capabilities. Additionally, battery-swapping technology, which allows trucks to quickly exchange depleted batteries for fully charged ones, has gained widespread use, making electric trucks more efficient for operators. Companies like SANY and XCMG lead the Chinese market with a variety of electric and hydrogen-fueled truck models.

In contrast, the report shows that Europe and the U.S. are trailing behind. While Europe saw about 8.000 zero-emission trucks sold in the same period, the U.S. managed only around 1.000 units. In both regions, the slow uptake is attributed to the high cost of vehicles, limited model availability, and a lack of infrastructure for charging or hydrogen refueling.

Europe and the U.S. struggle to keep up

In Europe, adoption is uneven. Countries like Norway, Germany, and the UK are making strides, with Norway leading the way—more than 10% of its new truck sales in the first half of 2024 were zero-emission. However, the rest of the continent has been slower to embrace electric trucks. In Poland, which has the largest truck fleet in the European Union, electric truck sales remain minimal, with only a few dozen units sold this year.

The U.S. faces similar challenges. California, with its strict emissions mandates and financial incentives, has seen some growth in zero-emission truck sales. However, outside of California, adoption remains sluggish. The limited availability of suitable models and the high upfront cost of electric trucks have kept the market from taking off.

Economics of electric trucks are improving

Despite slow growth in many parts of the world, the economics of zero-emission trucks are improving. Battery prices are falling, and the total cost of ownership (TCO) for electric trucks is starting to reach parity with diesel vehicles, especially for short-haul routes. According to the BNEF report, by 2030, even long-haul electric trucks could be as cost-effective as their diesel counterparts.

For now, battery-electric trucks dominate the market, making up more than 90% of zero-emission truck sales globally. However, hydrogen fuel-cell trucks are also beginning to emerge, particularly in China, where industrial by-product hydrogen is available at relatively low cost. The report predicts that hydrogen trucks could become more cost-competitive in the coming years, though the uncertainty around hydrogen production and refuelling infrastructure remains a significant hurdle.

Infrastructure gaps hold back broader adoption

A major obstacle to more widespread adoption of zero-emission trucks is the lack of charging and refuelling infrastructure. China has taken the lead in addressing this challenge by building a robust network of battery-swapping and hydrogen refuelling stations. In Europe and the U.S., however, the rollout of such infrastructure has been much slower.

Europe is working on plans to expand its network of fast chargers specifically for trucks, but progress is slow. Meanwhile, in the U.S., funding from the Inflation Reduction Act is being used to support charging infrastructure projects, but the scale of these efforts will take years to match the country’s needs.

Innovative financing offers a way forward

While infrastructure is one barrier, the upfront cost of zero-emission trucks is another. Even though battery prices are falling, many fleet operators are reluctant to invest in expensive new technologies. This is especially true for smaller operators, who may not have the capital to purchase a fleet of electric trucks outright.

The report highlights emerging solutions to this problem. Fleet operators are increasingly exploring new business models that spread the cost of electric trucks over time. For example, in both China and Europe, some fleet owners are partnering with charging infrastructure providers to co-develop charging stations, effectively sharing the costs and risks of electrification. There are also opportunities to repurpose used truck batteries for stationary energy storage, creating additional revenue streams and improving the return on investment for fleet owners.

Leasing models and fleet financing agreements, often backed by government incentives, are also gaining traction. These arrangements allow companies to spread the cost of zero-emission trucks over their lifetime, making them more affordable in the short term.

The path ahead

The BNEF report makes it clear that while progress is being made, much more is needed to meet global climate targets. Without significant acceleration in the adoption of zero-emission commercial vehicles, emissions from trucks are set to overtake those from passenger cars as the largest source of CO2 in road transport by 2040.

For regions like Europe and the U.S., scaling up adoption will require a coordinated effort among manufacturers, policymakers, and fleet operators. Investment in charging and refuelling infrastructure, along with stronger emissions regulations and innovative financing models, will be key to driving growth.

As battery prices continue to fall and more models become available, the commercial vehicle sector could see a significant shift toward zero-emission technologies in the coming years. But for now, the transition remains uneven, with China far ahead of the rest of the world.

Source: BloombergNEF