Electric truck makers and buyers both win UK firm forecasts

Interact Analysis research points to positives on both sides of the ledger

Electric truck makers and buyers both win UK firm forecasts
Jamie Fox

While electric heavy vehicles look to many like an unstoppable wave, insights from UK-headquartered international market intelligence firm Interact Analysis point to it being more profitable for manufacturers, too.

Almost counterintuitively, the cost of the vehicles would be set to fall at the same time, due to cost falls in other components.

In a follow-up to its January Electrified Truck and Bus Powertrain Pricing and Architecture report, Interact Analysis principal analyst Jamie Fox notes that, while the average value of the electric truck and bus powertrain components in a single vehicle was estimated at US$13,803 last year, with the battery being over half of this, the return is projected to increase to US$16,204 by 2023.

The three main reasons for the increase are said to be: 

The underlying mix of vehicles will trend more towards larger vehicles over time with a smaller percentage of smaller, light-duty trucks and more medium and heavy-duty trucks, for example.

In 2020 and 2021, there is a strong share of hybrids (often mild hybrids) but BEVs are forecast to grow faster

In 2023, Interact Analysis expects that Nikola will be able to bring fuel cell vehicles to the market in volume. Although the number of vehicles will be small, the high value of the fuel cell system means that even a small number of vehicles can affect the average powertrain value. 

This is not to say the ‘electrification’ of light-duty trucks is likely to lose momentum.

The January report foresees the thousands of light trucks sold now making way for something approaching 1.2 million by 2030.

"We need look no further than Amazon, who have just made a huge investment in Rivian, the electric van start-up company. Rivian has a contract to supply 100,000 electric vans by 2030.

"Projected production figures for all classes of electric commercial vehicle indicate that the strongest growth will be in 2021, 72 per cent up on 2020.

"From then on until 2030, percentage growth will reduce slightly year on year, but the net result will be a figure of 1.4 million vehicle shipments in 2030, 26 times higher than the figure for 2019."

But Interact Analysis also expects medium- and heavy-duty trucks to join the fray mid-decade and reach more than 200,000 units by decade’s end.

"Interact Analysis calculates total electric truck and bus powertrain market revenue for 2020 as being under $1bn – it is forecast to grow to $23bn by 2030. A massive increase," Fox states.

"And don’t be fooled by the seemingly low medium and heavy duty truck figures: they hide significant revenue potential."

This is due to the need for bigger battery packs for them, but it will be a dynamic picture. 

Read how Volvo Australia is looking to a fossil-free future, here 

 Medium/heavy-duty electric powertrain revenues is seen as matching that of light-duty trucks by 2026 at around US$4 billion, then outstrip the latter’s growth to end the decade at around US$140 billion compared to under US$8 billion.

In 2019, the battery pack in a BEV powertrain accounted for 59 per cent of the total cost of the powertrain. By 2030 its share will increase to 67 per cent of the total cost.

"The average price of the battery pack in 2019, for all powertrain types, was $8,000. This will rise to $8,600 by 2025, defying the usual trend of price reduction as time passes," Fox says, counting in US dollar terms.

"This is owing to the fact that the average pack size will increase as more medium and heavy-duty electric vehicles enter the market.

"Conversely, battery packs for pure battery electric vehicles will see a gradual price reduction, from an average of $14,000 in 2019, through $12,000 in 2025 to $10,000 in 2030.

"Not a significant drop, but a reduction nonetheless, reflecting the fact that many pure BEVs will be cars and light commercial vehicles, requiring smaller battery packs than large vehicles.

"But as the prices of other powertrain components also drop, the battery pack remains the high-value component.

"Fuel cell systems, currently found almost uniquely in buses, cost a hefty $96,000 in 2020.

"But the research forecasts a dramatic decline in fuel cell prices up to 2030 (in $/KW) as their application spreads in a range of heavy-duty vehicles. 53,000 shipments of fuel-cell systems are forecast for 2030, when prices are predicted to average 23 per cent of the 2019 figure – a more dramatic decline than any other component in the report."

The follow-up commentary highlights the expectation that e-axles – defined as a single unit composing of motor and transmission and sometimes other components – will be the preferred motor mechanism as new vehicle architectures are developed and manufacturers start moving away from central drive solutions.

Already it notes that ZF with its ‘portal axle’ for buses, and Meritor are making headway in this direction, though a tipping point is not expected until the 2030s.

"Unlike the trends from batteries and some other components, the average eAxle price will decline quite significantly both in a specific case and averaged across all powertrains, regions and vehicle types," Fox writes.

"This is because over time many suppliers will be capable of producing the product, and greater efficiencies will be achieved once research and development is completed and economies of scale are achieved. Particularly strong competition is forecast in the first half of the decade. 

"Overall, price erosion is forecast to be higher than for most of the other components included in this report." 

This is likely to be down from around US$4,500 a unit to just under US$2,000 a unit.

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