The trucking industry has to embrace electric propulsion fast or face obsolescence

While electric cars have been part of the car industry since its very beginning, they are only now starting to truly transform the industry and they are expected to dominate it over the next few decades.

Things are likely to move much quicker in the trucking industry now that EVs have matured and if legacy truck and bus makers don’t embrace electric propulsion fast, they could face obsolescence, according to analysts. 

Alexander Potter, a transport analyst at Piper Jaffray, wrote in a note to clients this week that the change is forcing him to stop recommending several truck makers and he is even turning to Tesla for a recommendation in the truck industry (via trucks.com):

“Many stocks in our truck coverage are exposed to disruption. Other than Wabco and Tesla we don’t recommend buying any of them,”

The comments follow his warning to truck makers earlier this year about not laughing at Tesla’s plan for its electric semi truck.

A few truck makers are taking the transition seriously, like Daimler, which is working on the Mercedes eTruck and the Daimler eCanter for medium-duty and urban routes, but most of the industry still don’t see batteries as a viable solution for long-haul trucks.

Tesla plans to disprove that with its upcoming electric truck to be unveiled in September.

Tesla Semi: everything we know about Tesla’s upcoming all-electric truck

CEO Elon Musk said that Tesla Semi will out torque any diesel truck and it will enable long distance trucking with full loads.

We are still waiting for the details regarding battery capacity and charging to enable such an ambitious goal, but Tesla apparently already has prototypes, which it wants to test in California and Nevada, and they should be unveiled next month at an event.

If successful, it could significantly reduce the cost of operation for trucking companies through gas and maintenance savings. Even if the starting price is more expensive due to the large battery packs, they could recoup the cost quickly and achieve quicker returns on investments.

Potter also sends a similar warning to bus makers:

“Although California remains an early adopter of electric vehicles, the merits of electric drivetrains are now being acknowledged in regions far away from ‘friendly’ coastal enclaves. Red states and blue states alike are embracing electric buses, and we see no reason why this trend should abate. Indeed, we expect it to accelerate,”

We recently reported on Los Angeles making an important order of 60 new BYD all-electric buses. BYD and other companies, like Proterra, which recently raised $55 million for upcoming expansions, are quickly stealing market shares from diesel buses and converting transit fleet operators to electric buses.