Daimler Charges Ahead with Electric Truck

Daimler North America’s Ryan Menze talks about how the Inflation Reduction Act has paved the way for electric trucks.

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In January, Daimler Truck North America’s CEO told reporters that sales of electric trucks in 2022 fell short of expectations in 2022.

Early adopters like UPS and Sysco Corp. had made big orders for the eCascadia truck, bur reduced their orders due to lack of charging infrastructure.  As of February, the company had dispatched approximately 100 EVs, and CEO John O’Leary says the company’s Portland plant is producing four to five trucks per day.

But the passage of the Inflation Reduction Act in August has given the company more reason to be hopeful about its electric truck’s prospects, and the addition of new charging infrastructure.

Hailed as the “most significant legislation to accelerate transportation electrification in U.S. history” by the Electrification Coalition, the IRA provided unprecedented incentives for commercial electric vehicles, making them eligible for federal tax credits up to 30% of the sales price. The IRA also incentivized production of commercial charging stations with a 6% tax credit of up to $100,000 per charging unit (up from the previous $30,000 tax rebate per property). 

The company continues to experiment with charging technology at Electric Island, a prototype charging station on Swan Island opened in April 2021 in collaboration with Portland General Electric.

The purpose of the site is to accelerate the development, testing and deployment of zero-emissions commercial vehicles and to  provide data to PGE about peak charging times.

Ryan Menze, manager of charger hardware and software engineering at Daimler Truck North America, spoke to Oregon Business about the increase in demand for medium and large-scale electric commercial vehicles. and the remaining barriers to the adoption of EVs.  

This interview has been edited for length and clarity.

How significant was the Inflation Reduction Act for the adoption of commercial EVs?

It’s been amazing. One of the big things it enabled was that it changed the equation around incentives for buying electric vehicles. It changed the incentive from being calculated on a per-unit basis to a battery capacity basis. Commercial vehicles have substantially more capacity, on the order of four to six times the order of magnitude. From my perspective, it directly ties to the amount of carbon emission that you can offset or otherwise displace.

In addition to that, there’s also money as a part of that to help install charging infrastructure. So, if you’re installing charging infrastructure at your site, or on a public site, there’s very specific requirements around what those must meet, which is very important, because you want anybody who drives up with a port to be able to charge on the connector that matches their port. And the IRA incentivizes the right things, in our opinion, it incentivizes the right things from that perspective.

Our biggest customers know they need to talk about and look at electrification right now to learn.  Because it’s coming. It’s inevitable. We’ve seen California has rules on the book that say you cannot sell an internal combustion engine in specific markets.

Charing infrastructure has been a continued problem for electric commercial vehicles. What are the challenges there, and how can they be overcome?  

Commercial vehicles just have more capacity on board, so they need higher charge rates to get the same amount of distance, so the that’s the primary thing is to just delivers more power.

Our bottleneck right now is the charging hardware infrastructure readiness side of things, but after the announcement of the IFA, I saw a huge shift in how vocal public charging operators became. They started getting more aggressive with trying to make sure they got the land acquisitions to start breaking ground on these sites.

I see it as a little bit of a gold rush almost for those sites, the areas that everybody knows are going to be the good public sites to get on the routes they know their customers are running.

The IFA has some of the requirements and incentives in there for public charging infrastructure. That helps us because they offset the cost of the charging hardware so it offsets the pain of using an adopting a new technology.

There are three different types of charging that we refer to. The first is private charging, which would be behind a fence – we have several private charging situations on Swan Island that we use for our reliability growth fleet – we have public charging, so think the Electrify America sites that are out there, and Tesla which has public charging sites, and then you have semi-private charging. Semi-private charging is like one the Port of Portland might own and operate – a charging island that is exclusively used for the customers at that location to charge their electric vehicles.

It’s expensive to install electrical electric charging infrastructure in the hundreds of thousands of dollars, typically. And because of that, the customers don’t want to pay for that in a space they’re leasing. So, this third, semi-private option is something that we’re looking to in order to offset the cost and counteract the challenges we’ve been having is getting the charging hardware to the customers.

How is Daimler helping to advance charging station technology?

The hardware that is installed in electric Island is chosen very carefully from the suppliers that we feel are major players in the charging and infrastructure game. They are the ones our customers are planning on using and that’s so that we can ensure that our truck will charge on that hardware when our customers get it, they can be sure that with a high degree of confidence that they’ll be good to go.

What are the technological challenges that need to be figured out before electric trucks can compete with diesel trucks?

A driver is required to take a break for 30 minutes over the course of the driving over their driving day, so the question becomes “how much charge can we give in that 30-minute window?” If they’re stopping to unload and they’ve got 15 minutes to chart to plug in how much range can we get in that 15 minutes?

We are look towards megawatt charging instead of kilowatt charging as the next-generation technology. Instead of adding five to 10 miles to a truck, you’re adding 20 to 30 miles in that 10-to-15-minute charge session, so you go from a 200-mile haul in a day to potentially 300-350 miles depending on the route.

Another factor is getting common standards for megawatt chargers developed and approved. There’s a global organization called CharIN, and they are leading the discussions around this. Daimler is responsible for writing a substantial amount of the recommendation that is being made from CharIN to the standards organizations – the IEC is the European standard organization and the IEEE SA is the is the American standards organization.

We need both of those organizations to adopt the standard as we’ve written it to some degree for the standard to go out and say “okay, if you are building megawatt charging it must be this in form factor in communication style.” Once you get the adoption, then the industry will start moving forward.

How close are you to developing megawatt charging?

We have the prototype on our electric Island and so we’re trying to figure out how we can move forward without a published standard.

There are several different communication standards on the table, but differential PLC is the leading one right now. It’s more secure, meaning that if you’re transferring credit card information — because you want to do plug-in charge, to plug in and walk away — it will read the address off of your vehicle and say, “Oh, I know this truck, I know I charged his credit card in the past.” And boom, you’re good to go. It’s also a higher-integrity level of communication, so you can literally have upsurge in electricity that can cause the previous the communication standard to have a fault, but then you just have to go out and plug back in, and then it will work again.

What are the cost and energy comparisons between an electric truck and a diesel truck?

When we talk about electric trucks competing, we have to look at three pillars: we look at the vehicle technology in terms of range, we look at it in terms of infrastructure in place to charge, and we have to have some level of cost parity.

An electric truck cost about twice as much as a diesel truck. That’s mainly because of the battery in it and the precious earth metals involved, but the cost to operate it is much lower. The battery cells themselves are very labor intensive and energy intensive to manufacture, so as we look towards the future, it’s about offsetting that with the operating costs of the vehicle.

We have customers that are electrifying because there’s incentives money and it’s less expensive to operate, and then we have customers that are doing it because they have emissions goals that they’re trying to attain, so they’re willing to buy vehicles without incentive money.

Electric trucks produce 30% less carbon emissions than diesel trucks. That takes into consideration all the shipping and production of the batteries, production of the axles, everything that goes into it, as well as the operation over its 1.2-million-mile life. But that’s very largely dependent on the power generation method, so the greener technology, the more renewables that are used for the electricity generation, the more carbon reduction you see. One thing I always like to say is the more you drive an electric truck, the greener it gets, because we’re constantly bringing on more efficient and more renewable energy generation.

When do you project the infrastructure and technology will be in a place where Daimler can begin mass production of commercial electric trucks?

The product that we’ve designed and are selling today is meant to be a product that serves our customers’ needs in a very specific way, but there are certain things in order to make them get to market that we just couldn’t do. As we look towards the next generation of vehicle that will definitely be released within the decade, that’s where we’re going after the mass market. We are going to see huge transition, we’re talking 10s of percents of our portfolio, into electric with that next generation of vehicle.

Some of the enablers of that will be battery technology, battery cost coming down overall, on a per kilowatt hours talking of dollars per kilowatt hour. We’re also seeing 10s of percents of drops in dollars per kilowatt hour for batteries. Overall, higher efficiencies. We’re targeting higher volumes, so we’re getting those economies of scales.

We’re just being able to tackle more markets because we’re putting more capacity on board.

This is very much a partnership, where we have direct feedback from our customers. We have our aviation fleet, so our previous generation vehicle, they built trucks, we put them in customers hands, they’ve driven over a million miles total collectively. As an organization, we’ve learned from that. But we’ve also built really strong relationships with those customers that have gotten a chance to drive those vehicles, and we implement those changes into the product that we launch.

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