Automotive insights

Automotive insights - Winter news round-up

Paul Burrows Paul Burrows

The increasing electrification of commercial vehicles globally is one of the biggest stories emerging in the automotive world today. Read on to find out what this means for the industry, as well as related news stories from around the world, in the first Automotive Insights of 2018.

The electrification of commercial vehicles surges on

For many years, commercial vehicles that travel the length and breadth of the country have been powered by diesel engines. The increased economy of diesel has meant that many businesses favour it over petrol as company-wide fuel costs are lower and emissions are kept down to benefit the environment. However, this is almost certain to change over the coming years, with the electrification of commercial vehicles continuing at a pace.

As it stands, diesel engines power around 90% of commercial trucks in the UK and US, with just five manufacturers accounting for 76% of the vehicles sold1. Now though, the demand for electric commercial vehicles is starting to show, with the likes of Royal Mail ordering 100 electric vehicles and conducting trials on another nine2. Never to be outdone, Tesla, the trailblazing EV manufacturer fronted by Elon Musk, has recently announced its first electrically powered semi-truck3.

Due to begin production in 2019, Tesla's vehicle is fast-charging (capable of adding 400 miles with a 30 minute charge) and comes in two models, with ranges of 300 and 500 miles at prices starting at £110,000 and £140,000 respectively. However, determined to steal Tesla’s thunder, Daimler unveiled a prototype of its own electric commercial vehicle just weeks before Tesla. Known as the E-Fuso Vision One, Daimler claims it has a range of 220 miles and can carry 11 tonnes of cargo, targeting shorter intra-city trips4.

Each of these vehicles, and others in the same vein, show huge promise that the electric future of commercial vehicles is not far away. With the likes of Tesla, Daimler and others involved, it is no longer a question of whether we will see mainstream use of ECVs, but when. It is unlikely to be an entirely smooth journey, with two key stumbling blocks that need to be resolved. The first is that the initial cost of diesel trucks is much lower than their electric equivalents. Their running and maintenance costs are well known. The lower total cost of ownership promised by ECVs is yet to be proven, particularly in major areas such as battery life cycles and vehicle resale values. Additionally, there is a huge amount of infrastructure needed to charge such enormous battery packs quickly and in locations that enable irregular delivery routes.

Tesla made some bold announcements for both of these areas, but these concerns are echoed in research carried out by financial services provider UBS. It spoke to publicly traded intermodal and truckload companies, independently-owned trucking companies, fleet purchasing decision-makers, and truck drivers, to gauge the mood around electrically powered heavy goods vehicles. UBS found that “stakeholders seemed sceptical” about the capabilities of heavy-duty ECVs and the promises being made regarding cost5. The idea of a simplified unit is driving interest, but according to the report most potential buyers see the greatest demand occurring in the medium duty, 300 mile a day, space.

At least in the short term, UBS research suggests that diesel seems set to retain its mantle as the go-to fuel choice for heavy-duty commercial goods vehicles6. That is unless there’s a change in regulatory requirements, a great enhancement in battery technology, or a significant lowering of total cost of ownership that proves too attractive to resist. However, the likes of refuse trucks and regional hauliers, or in fact any commercial vehicle that travels less than 300 miles per day, are likely to be a more fertile market for ECVs. With estimates that 80% of medium duty vehicles and 30% of heavy duty vehicles travel less than 300 miles a day, UBS forecasts that by 2022 electrification of heavy duty commercial vehicles will reach 10% in Europe and 5% in North America. Similarly, UBS estimates that 20% of medium duty vehicles in Europe and 15% in North America will be electric.

The figures are promising for the direction of the sector and, whilst we appear to be some way away from regularly seeing as many ECVs on the roads as diesel counterparts, it's clear that buyers are giving serious thought as to how they can fit into their fleets. As well as from Royal Mail's EV purchases, big name companies are already making orders for trials of Tesla's semi-truck, with UPS ordering 1257, and DHL, WalMart, Loblaws, Ryder, J.B Hunt and more asking for 2008.

The electrification of commercial vehicles seems inevitable, eventually. As these trials continue, and technology progresses, a clearer timescale and roadmap of just how electric commercial vehicles fit into the market should emerge.

Global news round-up

Continuing with the topic of electrifications of commercial vehicles, these are the automotive stories making headlines so far this year:

Clean air zones for Leeds in 2020

Leeds City Council has unveiled an ambitious plan for the city centre to have clean air zones from 2020. A laudable way to match Government emissions rules, the plans that Leeds City Council has put forward would particularly affect commercial vehicles such as buses and HGVs, as they would have to be Euro 6 compliant in order to use roads within the outer ring-road or else face a £100 charge9.

Joint effort to bring EV charging to Europe

Governments and global companies are continuing to invest in the infrastructure needed for electric vehicle charging. China has outlined a plan for 4.8 million charging outlets by 2020, one for every EV on the country's roads10, while Shell has teamed up with an EV charging operator with strong ties to BMW, Volkswagen, Daimler and Ford, in a bid to bring high-speed EV charging points to 10 European countries11. Speaking of Volkswagen, the German manufacturer continues to make reparations post-dieselgate, and is planning to spend $2 billion on installing 2,800 EV charging stations in 17 US cities by June 201912.

GM ride-sharing service

American auto giant General Motors (GM) has announced an ambitious plan to launch an autonomous ride-sharing service for public use as early as 201913. According to GM, the service will let customers travel across big cities for just $1 per mile. GM is operating with a closed system, not relying on any other providers, and so it believes it can launch a service which offers 'zero crashes, zero emissions, and zero congestion'. A relatively late arrival to the autonomous vehicle conversation, GM has managed to catch up with the competition (and announce an earlier launch date than that of its main rival in the field, Ford), thanks to the $581 million acquisition of San Francisco-based Cruise Automation last year14.


  1. Q-Series: How much will electric commercial vehicles disrupt the truck market?, UBS Securities, 13 December 2017
  2. Royal Mail’s new electric vans unveiled, BBC News, 23 August 2017
  4. Daimler steals Tesla’s thunder with heavy-duty electric truck, Bloomberg, 25 October 2017
  5. Q-Series: How much will electric commercial vehicles disrupt the truck market?, UBS Securities, 13 December 2017
  6. Q-Series: How much will electric commercial vehicles disrupt the truck market?, UBS Securities, 13 December 2017
  7. UK to ban diesel and petrol cars by 2040, Daily Telegraph, 25 July 2017
  8. Telsa Semi gets 10 more electric trucks order from delivery giant DHL, bringing reported total to 200,Electrek, 28 November 2017
  9. Leeds publishes plans for city centre clean-air zone, SMMT,12 December 2017
  10. Range anxiety powers China to invest in electric car-charging points, Financial Times,3 December 2017
  11. Shell to work with carmarkers on electric vehicle charging, Financial Times, 26 November 2017
  12. Volkswagen to install 2,800 U.S. electric vehicle charging stations, Reuters,19 December 2017
  13. General Motors aims to run fleets of self-driving taxis by 2019, Financial Times,30 November 2017
  14. How GM bought its way to the front of the driverless-car pack, Bloomberg, 30 November 2017