Doing Business at COP: Electric heavy duty trucks

Let me start by stating that by no means I wish to favor particular technologies or brands, but I do think sharing some of the innovation excitement of businesses at COP is going to help convince people that decarbonizing the freight and logistics sector is possible.

Meet Adalberto Maluf, Marketing and Governmental Relations Director of BYD Brazil. You probably wonder: BYD, isn’t that a Chinese company? Yes, that’s right, but the Chinese are thinking global too when it comes to electric vehicles and their role in mitigating climate change, and Brazil is a growing market. We got talking at a COP reception, and I asked him whether with all the attention on electric cars, BYD plays a role in promoting electric trucks.

Definitely! In Brazil, when electric trucks first came to market the business case simply wasn’t there: they were about 3 times more expensive then diesel trucks and had a 6-year pack back period. But then the São Paolo government exempted electric trucks from the 2% road tax based on vehicle price and granted them full downtown access. With these measures, the pay back period came down to 4 years, plus transport companies saved on fines previously paid for their diesel trucks entering the city center on license plate restricted days. 

I have spotted electric vans and delivery trucks in city centers around the world, but this was the first time I heard about heavy duty electric trucks used for transporting for example mining products, building materials or waste. Adalberto told me (excitedly!) that the Chinese government issued the export license of HD electric trucks only 2 months ago, so sales are just getting started in Brazil. The business case is actually better for HD trucks, he explained. As the financial savings come from using electric power instead of diesel, HD trucks recoup the investment costs faster because they travel further and consume more diesel. Plus, operational costs are significantly less because an engine with only 20 components (!!) requires less maintenance and batteries are made to last 20+ years.

Last question: is investment money an obstacle? Companies often expect a free trial of many months, but he can’t give them that. A financing model that works well is selling the electric truck at the price of a diesel truck combined with a 6-year lease on the battery. So business can find ways around the investment barrier, although favorable policies towards cleaner trucks and fuels like in São Paolo certainly speed things up. If this is matched with a faster shift to power generation from cleaner energy sources, “dirty trucking” may soon be a thing of the past!

06 December 2015
Sophie Punte, Executive Director 

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