The future of century-old Mack Trucks will still be electric.

• In 2021, Mack Trucks introduced a copper-colored bulldog hood ornament to mark the launch of its first battery-electric vehicle, a heavy-duty garbage truck.
• The company, now part of Volvo Group and headquartered in North Carolina, has delivered approximately 35 LRe's to various cities, with orders increasing by 200%. The adoption rate is described as "slow but steady."
• In 2023, the number of medium- and heavy-duty electric trucks in the U.S. increased significantly, from 1,948 to 10,265, according to an analysis by the Environmental Defense Fund.

Mack Trucks, founded in 1900 in Brooklyn, New York, is known for its 18-wheelers and diesel-powered big rigs with a bulldog on the hood. In 2021, the company debuted its first foray into battery-electric vehicles with an iconic copper-colored ornament. The LR Electric, a heavy-duty garbage truck, is designed to pick up and dispose of all types of refuse without emitting any noxious greenhouse gases.

Since then, Mack has delivered approximately 35 LRe's to various cities, including New York City and Miami, Florida, at a steady pace, as described by Jonathan Randall, president of Mack Trucks North America.

"He stated that cities are not receiving deliveries in bulk but are testing the technology to determine its effectiveness."

Mack, a subsidiary of Sweden's Volvo Group and its Volvo Trucks unit, has experienced a 200% increase in new orders for its BEVs in 2022, with a total of 124 orders compared to 44 in the previous year.

EVs are proven to be effective, as demonstrated by Mack's introduction of the MD Electric last March, which is a medium-duty model. Nearly every automotive manufacturer produces a combination of fully electric, plug-in hybrid, and gas-electric hybrid vehicles. Many OEMs have set targets to sell only zero-emissions vehicles (ZEVs) by 2050, in line with the 2015 Paris Climate agreement's ambitious net-zero goals to combat global climate change. The transportation sector is the largest contributor to greenhouse gas emissions in the U.S., accounting for 29% of total U.S. emissions in 2021, according to the Environmental Protection Agency's latest statistics.

The multibillion-dollar question about EV buying

The viability of technologies is not the only concern as the industry shifts away from internal-combustion engines; the multibillion-dollar question is whether and when customers will purchase EVs. Purchase decisions for consumers and commercial markets differ, as reflected in last year's EV sales results and future growth outlooks within both sectors.

Despite a record 1.2 million EVs being bought or leased by U.S. consumers in 2023, representing a 46% year-over-year growth and a 7.6% market share, the pace of growth slowed by year's end. EV sales increased by 40% in the fourth quarter but were down from 49% in the third quarter. Cox predicts that this year's EV sales will reach 1.5 million, a 36% increase from last year. In summary, the U.S. EV market is still growing, but not as quickly as before.

The automotive industry, including Ford, Tesla, and GM, has been reducing the prices of electric vehicles (EVs) to increase demand, adjusting production targets for new EV models, and shifting jobs from EV production to traditional engine models. Additionally, automakers are becoming more cautious about their initial timelines for the EV transition while emphasizing the benefits of hybrids.

The number of electric vehicle trucks deployed in the US has increased significantly between 2020 and 2023. In 2020, there were 80 EV truck deployments, which jumped to 1,948 in 2022. Adding to this, more than 10,000 deployments were recorded in 2023, resulting in a total of over 12,894 medium- and heavy-duty electric trucks being put into service. This increase includes Class 2 EVs, such as the electric vans being used by delivery services like Amazon.

In 2023, the sales of medium- and heavy-duty trucks, which make up only 5% of vehicles on the road, increased by 7.6% to 507,277 units, compared to 2022, according to the American Truck Dealers Association. The association does not provide information on the number of electric vehicles sold.

"Randall stated that the dynamic of discussing business-to-business versus business-to-consumer markets and the adoption of technology is different. He noted that while the demand for business-to-consumer markets has decreased, the interest in business-to-business markets remains strong. Although they haven't sold as many electric vehicles as automakers, the demand for electric vehicles in their market is still robust, and it will continue to grow."

ACT Research, a trucking industry analyst firm, agrees with Randall's optimism about the adoption of zero-emission and decarbonization vehicles, though they are more cautious. In September, the firm released a study estimating that the adoption rates for these vehicles will reach 25% by 2030 and 50% by 2040. However, the study forecasts a relatively low adoption rate from this year through 2026, reflecting the fact that BEV sales of commercial vehicles are still in their early years. This begins to change in 2027, in part due to upcoming changes in federal and state emissions regulations that may result in higher prices of diesel-powered trucks.

Rundle emphasized the importance of calculating the total cost of ownership (TCO) for commercial buyers when considering the purchase of EVs, stating that it is a crucial factor in determining their return on investment.

The payback for EV trucks is still higher than that of ICE models, so fleet owners, private hauling companies, and individual truck operators must weigh the upfront cost of an EV against its lower operating costs.

According to Mattias Holmberg, an analyst at DNB Markets based in Sweden, EVs have fewer moving parts, which means aftermarket needs can be significantly reduced. Although routine maintenance costs like brakes and tires will still be present, they won't be as high as repairing or replacing pistons, valves, and other expensive components that make up an ICE, as well as a multi-gear transmission. This will help balance the cost.

When an owner considers the total cost of ownership (TCO), which encompasses aftermarket spare parts, maintenance, drivers' wages, fuel consumption, and insurance, among other expenses, the break-even point tends to shift away from the initial large investment.

According to Holmberg, two crucial elements in the TCO equation are battery technology and charging infrastructure, which every EV manufacturer must address. Since the battery remains the most expensive component of an EV, reducing its cost and increasing its energy capacity are the primary areas of focus for truck OEMs' research and development investments.

"Holmberg stated that we need energy-dense and affordable batteries for this to be feasible. He pointed out that the development curve of battery costs indicates that this will become possible in the future. However, he believes that we are still a few years away from reaching the break-even point where it makes complete economic sense to switch."

A research conducted by the International Council on Clean Transportation and Energy Innovation in 2020 revealed that the TCO of battery-electric long-haul trucks is expected to be lower than that of diesel trucks by 2030.

In 2022, Volvo Group announced plans to build a large-scale battery factory in Sweden, expected to reach large-scale production by 2030. Closer to home, in early February, Volvo Group completed its acquisition of Proterra, a U.S. battery and electric bus manufacturer that declared Chapter 11 bankruptcy last summer, for $210 million. The deal includes a development center for battery modules and packs in California and an assembly factory in South Carolina.

The trucking industry faces a challenge in building an adequate and reliable nationwide battery charging infrastructure, which is crucial for the transition to commercial electric vehicles (EVs), especially heavy-duty semis that travel long distances. This is a major component among the federal and state governments' efforts to drive the transition to EVs.

Several startups, including Freewire, TeraWatt Infrastructure, WattEV, and others, are installing charging stations across the country. In January, a coalition known as Powering America's Commercial Transportation was formed by Volvo Group North America, Daimler Truck, and Navistar, representing approximately 70% of the medium- and heavy-duty truck market in the U.S., to promote the development of charging infrastructure.

The National Electric Vehicle Infrastructure Formula Program, established by the Bipartisan Infrastructure Law, provides $5 billion over five years to develop a charging network nationwide. Additionally, the Inflation Reduction Act offers tax incentives to businesses for installing charging equipment.

The trucking industry and government entities are working to make long-distance EV transportation more cost-effective, but short-distance routes are more viable. Commercial vehicles operating on one shift, driving less than 100 miles a day and returning to a local hub for charging are ideal for maximizing the strengths of a BEV. This is why Amazon, Walmart, FedEx, and UPS, as well as short-haul private shippers, are electrifying their fleets. Marine ports and terminals have also seen an increase in drayage EVs that transport shipping containers to local destinations.

Mack's two electric vehicles (EVs) are suitable for short-haul scenarios and align with the company's e-mobility strategy. Randall stated that the MDe can transport light loads, operate in urban environments, and return to a depot every night. As of mid-February, Mack had only a few MDe's on the road, but they have a significant backlog to deliver in the first half of the year.

Mack produces both ICE and electric MDs at its Roanoke, Virginia facility and has recently announced a $14.5 million investment to expand the facility. Randall stated that Mack will explore the development of a heavy-duty EV for regional hauling, including drayage, as there is sustained interest in adoption in these markets.

Mack Trucks' network of nearly 420 dealers is crucial in the adoption of electric vehicles (EVs). Approximately 80 of them have already or are in the process of becoming EV-certified, which involves meeting Mack's safety, infrastructure, charging, and tooling standards.

The company provides Turnkey Solutions, a fleet management program, to support dealers and alleviate customers' reluctance to adopt EVs by covering all aspects of establishing a charging infrastructure. Additionally, Mack offers ElectriFi Subscription, a leasing program, which enables customers to pay for miles driven with chassis and body, charging, applicable incentives, physical damage insurance, and maintenance costs bundled into monthly payments.

As e-mobility grows as a percentage of total sales, it will be necessary for the entire dealer network to be EV-certified, according to Randall.