Electric Truck Economic Feasibility Analysis

Article Electric Truck Economic Feasibility Analysis

Ram Vijayagopal * and Aymeric Rousseau

Argonne National Laboratory, 9700 S. Cass Avenue, Lemont, IL 60439, USA; [email protected] * Correspondence: [email protected]

Abstract: The technical feasibility of electrified powertrains has already been demonstrated through several simulation and prototyping efforts. The economic feasibility of advanced powertrains for trucks has not yet been fully analyzed as it depends on a very large number of parameters. There are several examples of battery or fuel-cell-powered trucks used by fleets, but most of these vehicles are either part of technical demonstrations or incentivized by government agencies. Wider acceptance of trucks with advanced electrified powertrains will be possible when they achieve performance and economic parity with conventional vehicles. This paper examines the sensitivity of total ownership cost (TCO) for medium and heavy-duty electric trucks with respect to battery and fuel costs. The results will help identify cost targets for battery packs for various types of trucks and will also highlight use cases where we are likely to see early adoption of these technologies.

Keywords: heavy duty; electric truck; TCO

1. Summary This study quantifies the economic impact of electric trucks on a $/mile basis for fleet operators compared to diesel-powered trucks. Different vehicle classes and component Citation: Vijayagopal, R.; Rousseau, sizes will be considered to determine which application and design are most likely to A. Electric Truck Economic Feasibility achieve ownership cost parity with diesel trucks. In addition, sensitivities related to the Analysis. World Electr. Veh. J. 2021, 12, cost of the battery, fuel, and electricity affecting the economic viability of electric trucks 75. https://doi.org/10.3390/ will be assessed. Class 4 delivery trucks will be considered as an example to demonstrate wevj12020075 how design choices and use cases affect electric truck purchase price and efficiency. We will demonstrate that, while a short payback period is possible for electric trucks, a full Academic Editor: Carlo Villante utilization of the battery energy is critical.

Received: 20 April 2021 2. Introduction Accepted: 10 May 2021 Several studies and reports predict that the medium duty and heavy duty market Published: 12 May 2021 will be ready for electric vehicles in the near future [1–3]. Löfstrand et al. assigned future fuel prices to establish a time frame for electric truck adoption in the European market. Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in North American Council for freight efficiency has stated that electric trucks are a viable published maps and institutional affil- choice for ‘return to base’ urban operations where the range is predictable and economic iations. overnight charging is possible [4,5]. Instead of using prototype or early battery electric vehicles (BEVs) in the markets, this study examines simulated models of electric trucks with similar performance and cargo capacity to conventional trucks. The work quantifies the monetary impact for the vehicle owners due to changes in fuel and energy prices. This paper will also examine the importance of reducing battery cost for achieving the parity in Copyright: © 2021 by the authors. Total Cost of Ownership (TCO). Licensee MDPI, Basel, Switzerland. This article is an open access article United States Department of Energy expects to bring down battery pack cost to distributed under the terms and $125/kWh within a few years and reduce it to less than $100/kWh in the long term [6]. conditions of the Creative Commons This work will help us understand how lower battery cost, combined with fuel and energy Attribution (CC BY) license (https:// prices, will shape the commercially viable rollout of electric trucks in the US market. creativecommons.org/licenses/by/ The commercial feasibility of BEVs depends on various factors, starting with vehicle 4.0/). specifications, use cases, cost of electricity, and fossil fuels. The importance of appropriate

World Electr. Veh. J. 2021, 12, 75. https://doi.org/10.3390/wevj12020075 https://www.mdpi.com/journal/wevj World Electr. Veh. J. 2021, 12, 75 2 of 10

sizing of the battery was discussed by Neubauer et al. [7] as well as Feng et al. [8]. This work includes the sensitivity to the daily driving range and examines how the TCO changes if we were to design the vehicle specifically for lower or higher ranges. Understanding the sensitivity of TCO to each of these factors allows fleets to decide when it would be appropriate to adopt these new vehicles. In the US, commercial trucks are primarily classified according to their weight class. The vocation for which trucks are designed serves as a secondary classification. The truck usage determines its requirements in terms of cargo mass, driving speed, range, electrical, and mechanical accessories, etc. The vehicle technical specifications, in turn, determines the powertrain component size requirements. In this study, we studied 5 trucks across multiple classes and applications. To ensure a fair comparison between two powertrains, a set of common performance criteria was established for each type of truck, as shown in Table1.

Table 1. Vehicles and required performance capabilities for each use case.

Grade Speed Cruise Class Purpose Cargo (kg) 0–30 mph (s) 0–60 mph (s) Range (Miles) 6% (mph) Speed (mph) 4 Delivery 2755 9 30 50 70 150 6 Delivery 5146 14 50 37 70 150 8 Sleeper 17,329 18 60 32 65 500 8 DayCab 17,324 18 66 31 65 250 8 Vocational 6874 18 76 30 60 200

Both diesel trucks and electric truck’s powertrain components are sized to match or exceed the acceleration and speed requirements. The range speciﬁed in the above table is the minimum distance the trucks are expected to drive before stopping for refueling or recharging the battery packs. It was estimated from various real-world surveys, such as Ve- hicle Inventory and Use Survey (VIUS) [9] and FleetDNA [10], as well as feedback from the industry. The default tank sizes on diesel trucks allow those trucks to exceed this distance easily. Electric trucks are designed with battery packs to match the range requirement. This study uses Autonomie [11] to model and simulates the different vehicle designs considered. Autonomie is a commercially available simulation tool that includes vehicle models for all these trucks and provides the component and control libraries for modeling conventional and electric variants. The powertrain sizing logic used to size the powertrain components is described in a prior work [12]. To simplify the cost and weight estimates, it is assumed that parts of the vehicle not directly related to the powertrain, such as chassis, body, wheels, etc. will remain unchanged between the conventional and electric trucks. The component sizes for each truck are summarized in Table2.

Table 2. Component size summary for comparable conventional and electric vehicles.

Diesel Electric Class Purpose Engine (kW) Motor (kW) Battery Pack (kWh) 4 Delivery 165 175 220 6 Delivery 165 215 325 8 Sleeper 330 630 1575 8 DayCab 307 480 835 8 Vocational 215 300 590

For all ﬁve vehicles, the engine size of the conventional vehicle is comparable to that found in production vehicles. Medium duty trucks often span multiple weight classes and share the same engine. This paper explores the cost of owning these trucks and examines the necessary price points for diesel, electricity, and energy storage systems for electric trucks to be economically attractive. World Electr. Veh. J. 2021, 12, 75 3 of 10

3. Vehicle Purchase Price 3.1. Main Component Costs The manufacturing cost assumptions used in this study are described in the following section. We assume that the batteries and electric machines used for light-duty applications will have to be redesigned to withstand the more demanding duty cycles expected in trucks. Current batteries manufacturing cost is estimated at $270/kWh, if they are produced in sufﬁcient volume. However, for trucks, the production volume is expected to be low, at least in the initial years, and this could result in a higher $/kWh value for those packs. This study considers battery cost ranging from $350/kWh to $80/kWh to examine the sensitivity. The baseline cost values for various components such as batteries and motors are summarized in Table3. These values are based on the assumptions and calculations explained in an earlier report from Argonne National Laboratory [13].

Table 3. Main component manufacturing cost comparison.

Diesel Electric Class Purpose Engine ($) Gearbox ($) Motor ($) Battery Pack ($) 4 Delivery 13,400 4700 5300 53,200 6 Delivery 13,100 4700 6400 79,300 8 Sleeper 29,200 11,400 18,400 382,200 8 DayCab 26,400 10,700 14,300 202,700 8 Vocational 17,000 5800 8700 143,300

3.2. Vehicle Purchase Price Estimation Vehicle cost is estimated by adding up the manufacturing cost of the components and applying a retail price equivalent factor. For truck application, this factor is assumed to be 1.2. In this analysis, we do not assume any grants or incentives for electric trucks. The estimated purchase price of trucks considered in this study is shown in Table4.

Table 4. Estimated purchase price of conventional and electric trucks.

Purchase Price ($) Class Purpose Diesel Electric 4 Delivery 59,100 95,900 6 Delivery 73,400 138,000 8 Sleeper 143,500 496,800 8 DayCab 122,300 296,200 8 Vocational 96,800 221,800

It should be noted that these values are provided as an example of the difference in vehicle costs. As we change the component cost assumptions in the sensitivity analysis, these values will change.

4. Vehicle Energy Consumption Fuel costs play an important part in the overall truck operational cost. For class 8 sleeper trucks, the fuel cost could even outweigh the truck purchase price. The vehicle energy consumption is measured on three separate drive cycles, as prescribed by U.S. EPA in their proposed regulatory framework for medium and heavy duty vehicles [14]. Two of these cycles represent highway driving, and the third cycle represents the transient driving observed in urban conditions. Based on the purpose for which each truck is used, the results from the three drive cycles are weighted differently. The weighing method put forth by U.S. EPA considers the share of vehicle operation within each cycle. For example, the Class 8 Sleeper trucks run mostly on highways. Thus for that type of truck, higher weight is given to the two cycles representing highway operations, and only 5% weightage World Electr. Veh. J. 2021, 12, 75 4 of 10

is given to the transient operations. The weighted fuel consumption for each truck used to examine its economic viability is summarized Table5. The electrical consumption values are converted to diesel equivalent fuel economy for easy comparison.

Table 5. Diesel equivalent fuel economy.

Weighted Fuel Economy Mpgde Class Purpose Diesel Electric 4 Delivery 12.4 52.3 6 Delivery 10.1 33.4 8 Sleeper 6.7 11.5 8 DayCab 6.4 11.5 8 Vocational 7 17.3

Fuel Cost Since predicting future fuel cost is difﬁcult, BEVs economic viability is examined for a range of diesel and electricity prices. Diesel cost varies from $2.5/gallon to $4/gallon while electricity cost varies from 10 c/kWh to 30 c/kWh. When combined with the different battery prices, we can determine under which conditions BEVs will become economically attractive.

5. TCO Analysis This section quantifies the difference between diesel and electric truck ownership costs. Some TCO factors, such as driver wages, registration costs, tolls, etc., are assumed to be identical across vehicle designs. The two main factors are 1. Initial purchase price 2. Fuel/Energy costs spread over the service period of the truck. In the commercial truck market any technology will have to be economically viable for achieving wider acceptance by fleets. TCO expressed as $/mile is widely used as a metric to measure this economic feasibility. Many industry groups [5,15] use this metric and have quantified the cost of operating trucks in US. Thus, this work will be using a similar approach for comparing the economic feasibility of BEVs and compare that with the ownership cost of conventional trucks.

5.1. Annual Vehicle Miles Travelled (VMT) Assumption We assume the vehicles are used for 20 days a month for the designed daily driving distance for the entire service period. This gives us VMT estimates shown in Table1. It is assumed that battery replacement will not be needed during the service period of the vehicle. Later sections of the paper will examine the impact of VMT on TCO parity.

5.2. Vehicle Service Period Assumption The service period changes for different types of trucks. The vehicle lifetime is expected to be 15 years for all trucks except Class 8 Sleeper. Typical sleeper trucks are used for long haul for less than 5 years. After the initial 5 years, they get used in regional or short-haul operations. We assume the sleeper trucks to have a residual value of 45% of purchase price when the ﬂeets dispose of them at the end of 5 years. If trucks are used for their full lifetime of 15 years, there is no residual value expected at the end of their service period. The variation of residual values as a function of the service time is shown in Figure1. With the assumptions shown in Table6, Autonomie estimates that the sum of the purchase price and fuel costs over the service period for a class 8 sleeper is $0.62/mile. This is similar to the estimate made by American Transportation Research Institute (ATRI) as well [15]. World Electr. Veh. J. 2021, 12, x 5 of 11

World Electr. Veh. J. 2021, 12, 75 period. The variation of residual values as a function of the service time is shown in Figure5 of 10 1. Residual Value (%) Residual Value

FigureFigure 1.1. Variation of of assumed assumed residual residual value value of of a truc a truckk as asa percentage a percentage of purchase of purchase price price as a as a functionfunction of of the the years years of of service. service.

WithTable the assumptions 6. Assumptions shown for TCO in calculation.Table 6, Autonomie estimates that the sum of the purchase price and fuel costs over the service period for a class 8 sleeper is $0.62/mile. Service Period Discount Class Purpose VMTThis is similar to the estimate made by AmericanBattery Transportation Cost Electricity Research Cost Institute Diesel Cost(ATRI) as well [15]. (Years) Rate (%) 4 Delivery 18,000 15 6 Delivery 18,000Table 6. Assumptions for TCO calculation. $350/kWh 10 c/kWh $2.5/gallon 8 Sleeper 120,000 5 7 to to to 8 DayCab 30,000 Service $80/kWh 30 c/kWh $4/gallon 15 Discount Battery Electricity 8 Vocational 24,000Class Purpose VMT Period Diesel Cost Rate (%) Cost Cost (Years) 4 Delivery 18,000 The actual cost of battery packs,15 diesel, and electricity charges could vary for every 6 Delivery 18,000 $350/kWh 10 c/kWh $2.5/gallon ﬂeet. The range considered here would help account for such variations. 8 Sleeper 120,000 5 7 to to to 8 DayCab 30,000 $80/kWh 30 c/kWh $4/gallon 6. Results 15 8 Vocational 24,000 This section summarizes the TCO parity comparison for all trucks. Sensitivity related to battery and energy cost, along with daily trip distance and associated electric range, will The actual cost of battery packs, diesel, and electricity charges could vary for every be considered. Based on Figures2–4, it can be inferred that among the vehicles considered, fleet. The range considered here would help account for such variations. the most promising candidate to achieve purchase price parity with diesel trucks is the World Electr. Veh. J. 2021, 12, x smaller (Classes 2 to 4) electric delivery trucks. Classes 5–6 and larger trucks face a tougher6 of 11 6. Results challenge due to the need for larger battery packs. This section summarizes the TCO parity comparison for all trucks. Sensitivity related to battery and energy cost, along with daily trip distance and associated electric range, will 100be considered. Based on Figures 2–4, it can be inferred that among the vehicles considered, the most promising candidate to achieve purchase price parity with diesel trucks is the smaller0 (Classes 2 to 4) electric delivery trucks. Classes 5–6 and larger trucks face a tougher challenge due to the need for larger battery packs. -100

-200

Light HD -300 Medium HD Sleeper HR -400 DayCab HR Heavy HD -500 50 100 150 200 250 300 350 Battery Cost ($/kWh)

FigureFigure 2. 2. PurchasePurchase price price parity parity comparison comparison of of all all vehicles vehicles considered considered in in this this study. study.

Figure 3. Difference in TCO in using an electric truck over a diesel truck for parcel delivery operations in urban centers. World Electr. Veh. J. 2021, 12, x 6 of 11

100

-100

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Light HD -300 Medium HD Sleeper HR -400 DayCab HR Heavy HD -500 50 100 150 200 250 300 350 World Electr. Veh. J. 2021, 12, 75 6 of 10 Battery Cost ($/kWh) Figure 2. Purchase price parity comparison of all vehicles considered in this study.

World Electr. Veh. J. 2021, 12, x 7 of 11 Figure 3. Difference in TCO in using an electric truck over a diesel truck for parcel delivery operations Figure 3. Difference in TCO in using an electric truck over a diesel truck for parcel delivery opera- in urban centers. tions in urban centers.

Figure 4. Difference in TCO in using heavy duty electric truck for various vocations. Figure 4. Difference in TCO in using heavy duty electric truck for various vocations. Figure2 shows the difference in purchase price between diesel and electric trucks. ValuesFigure under 2 zero shows show the that difference EVs are in more purchase expensive price than between diesel diesel trucks. and Light electric HD truckstrucks. couldValues see under purchase zero price show parity that EVs when are battery more packexpensive cost drops than diesel to $80/kWh. trucks. LightLight HD HD trucks trucks cancould achieve see purchase TCO parity price with parity diesel when even battery with pack costlier cost battery drops packs,to $80/kWh. as shown Light in HD Figure trucks3. can achieve TCO parity with diesel even with costlier battery packs, as shown in Figure 3. The profit or loss associated with operating an electric delivery truck is quantified in terms of $/mile in this figure. The green region indicates conditions where the electric truck is profitable. With present diesel prices at $3/gallon, class4 (Light HD) delivery trucks could see TCO parity if the battery pack cost is at $225/kWh. Figure 4 shows a similar analysis for class 8 trucks designed as Vocational, DayCab, and Sleeper. The heavier electric trucks in this analysis will be cost-effective only if battery pack cost drops under $100/kWh or if diesel prices rise to $4/gallon or higher. This shows that for today’s diesel price and cost of batteries, early adopters of these vehicles might incur a loss varying from 5 c/mile to 30 c/mile based on the type of truck they operate if they do not receive any grants or tax incentives to offset the cost of acquiring these trucks.

6.1. Impact of Driving Range and Daily Trip Distance on TCO The above figures show purchase price parity will be difficult to achieve for most trucks even if the battery pack cost reaches the lower limits considered in this study. This means that fuel savings are critical to achieving TCO parity. Fuel savings are directly linked to the distance driven by the trucks. This brings the focus to the assumptions electric truck will be driven for the full designed driving range during its service period. If the daily trip distance is shorter than the designed electric range, it means that the expensive battery pack in EVs are not being fully utilized. The price of diesel trucks is largely unaffected by such variations in daily trip distance. If the daily trip distance is lower than the designed range of the EV, it reduces the potential for fuel savings and World Electr. Veh. J. 2021, 12, 75 7 of 10

The profit or loss associated with operating an electric delivery truck is quantified in terms of $/mile in this figure. The green region indicates conditions where the electric truck is profitable. With present diesel prices at $3/gallon, class4 (Light HD) delivery trucks could see TCO parity if the battery pack cost is at $225/kWh. Figure4 shows a similar analysis for class 8 trucks designed as Vocational, DayCab, and Sleeper. The heavier electric trucks in this analysis will be cost-effective only if battery pack cost drops under $100/kWh or if diesel prices rise to $4/gallon or higher. This shows that for today’s diesel price and cost of batteries, early adopters of these vehicles might incur a loss varying from 5 c/mile to 30 c/mile based on the type of truck they operate if they do not receive any grants or tax incentives to offset the cost of acquiring these trucks.

6.1. Impact of Driving Range and Daily Trip Distance on TCO The above ﬁgures show purchase price parity will be difﬁcult to achieve for most trucks even if the battery pack cost reaches the lower limits considered in this study. This means that fuel savings are critical to achieving TCO parity. Fuel savings are directly linked to the distance driven by the trucks. This brings the focus to the assumptions electric truck will be driven for the full designed driving range during its service period. If the daily trip distance is shorter than the designed electric range, it means that the World Electr. Veh. J. 2021, 12, x expensive battery pack in EVs are not being fully utilized. The price of diesel trucks8 ofis 11

largely unaffected by such variations in daily trip distance. If the daily trip distance is lower than the designed range of the EV, it reduces the potential for fuel savings and makes anmakes EV less an economicallyEV less economically attractive. attractive. For this analysis,For this analysis, we will focuswe will on focus class 4on delivery class 4 vansdeliv- andery thevans class and 8 the Daycab class trucks.8 Daycab We trucks. will examine We will howexamine the TCOhow paritythe TCO is affectedparity is ifaffected VMT isif reduced. VMT is reduced. FleetDNA data shows that a designed range of 150 miles is sufﬁcient to cover most of FleetDNA data shows that a designed range of 150 miles is sufficient to cover most the delivery truck use cases, but a majority of those routes are under 75 miles, as shown in of the delivery truck use cases, but a majority of those routes are under 75 miles, as shown Figure5. Similar trends are found for other types of trucks too. in Figure 5. Similar trends are found for other types of trucks too.

Figure 5. Distribution of daily trip distance for delivery trucks from FleetDNA. Figure 5. Distribution of daily trip distance for delivery trucks from FleetDNA.

6.1.1.6.1.1. Case Case 1: 1: Designed Designed for for 150 150 Miles Miles but but Used Used for for Shorter Shorter Daily Daily Driving Driving WeWe consider consider two two additional additional cases cases to to examine examine the the sensitivity sensitivity to to VMT, VMT, where where the the daily daily triptrip distance distance is is set set to to 45 45 miles miles and and 75 75 miles, miles, respectively, respectively, to to evaluate evaluate a a 50th 50th percentile percentile and and 90th90th percentile percentile case case from from FleetDNA. FleetDNA. This This changes changes the the annual annual vehicle vehicle miles miles used used for for the the TCOTCO estimate estimate to to 4800 4800 miles miles and and 9000 9000 miles, miles, respectively. respectively. IfIf we we assume assume a a diesel diesel cost cost of of $3/gallon,$3/gallon, TCOTCO parityparity cancan bebe observedobserved for for a a light light HD HD delivery delivery van van only only if if the the battery battery pack pack costscosts less less than than $125/kWh $125/kWh andand $150/kWh,$150/kWh, respec respectively.tively. This is illustrated inin FigureFigure6 6..

Figure 6. TCO parity check for class4 delivery truck with reduced VMT.

The shaded regions represent the lines represent the conditions where the electric truck has a lower TCO over the diesel counterpart.

6.1.2. Case 2: Designed and Used for Shorter Daily Driving This case assumes a scenario where the battery is sized to specifically meet the daily driving requirements. As we see from FleetDNA data, about half of the daily trips are under 45 miles. If we have three use cases where daily driving distances are 150, 75, and 45 miles, respectively, we can obtain vans that are designed with smaller battery packs, just for those distances. Under such a situation, the electric truck will be economically attractive even under the present-day cost of battery packs and diesel. This is shown in Figure 7. World Electr. Veh. J. 2021, 12, x 8 of 11

makes an EV less economically attractive. For this analysis, we will focus on class 4 delivery vans and the class 8 Daycab trucks. We will examine how the TCO parity is affected if VMT is reduced. FleetDNA data shows that a designed range of 150 miles is sufficient to cover most of the delivery truck use cases, but a majority of those routes are under 75 miles, as shown in Figure 5. Similar trends are found for other types of trucks too.

Figure 5. Distribution of daily trip distance for delivery trucks from FleetDNA.

6.1.1. Case 1: Designed for 150 Miles but Used for Shorter Daily Driving We consider two additional cases to examine the sensitivity to VMT, where the daily trip distance is set to 45 miles and 75 miles, respectively, to evaluate a 50th percentile and 90th percentile case from FleetDNA. This changes the annual vehicle miles used for the

World Electr. Veh. J. 2021, 12, 75 TCO estimate to 4800 miles and 9000 miles, respectively. If we assume a diesel cost8 of of 10 $3/gallon, TCO parity can be observed for a light HD delivery van only if the battery pack costs less than $125/kWh and $150/kWh, respectively. This is illustrated in Figure 6.

FigureFigure 6. 6. TCOTCO parity parity check check for for class4 class4 delivery delivery truck truck with with reduced reduced VMT. VMT.

TheThe shaded shaded regions regions represent represent the the lines lines represent represent the conditions where the electric trucktruck has has a a lower lower TCO TCO over over the the diesel diesel counterpart. counterpart.

6.1.2.6.1.2. Case Case 2: 2: Designed Designed and and Used Used for for Shorter Shorter Daily Daily Driving Driving ThisThis case case assumes assumes a a scenario scenario where where the the battery battery is is sized sized to to specifically speciﬁcally meet meet the the daily daily drivingdriving requirements. requirements. As As we we see see from from FleetDN FleetDNAA data, data, about about half half of of the the daily daily trips trips are underunder 45 45 miles. miles. If If we we have have three three use use cases cases where where daily daily driving driving distances distances are are 150, 150, 75, and 4545 miles, respectively, wewe can can obtain obtain vans vans that that are are designed designed with with smaller smaller battery battery packs, packs, just World Electr. Veh. J. 2021, 12, x 9 of 11 justfor thosefor those distances. distances. Under Under such asuch situation, a situatio the electricn, the electric truck will truck be economically will be economically attractive attractiveeven under even the under present-day the present-day cost of battery cost packsof battery and diesel.packs and This diesel. is shown This in is Figure shown7. in Figure 7.

FigureFigure 7. 7. TCOTCO parity parity check check for for class4 class4 delivery delivery truck truck with with reduced reduced VMT VMT and and resized battery pack.

IfIf a a delivery delivery truck truck is is designed designed for for 75 75 mile mile range range and and driven driven 75 75 miles miles every every day, day, it it wouldwould have have TCO TCO parity with a diesel truck even if the batterybattery costcost isis $300/kWh,$300/kWh, if if the rechargingrecharging of of battery battery could could be be achieved achieved at at 10–12 10–12 cents per kWh.

6.2.6.2. Impact Impact of of Shorter Shorter Service Service Period Period ThisThis study study assumes assumes a a service service period period of of 15 years for medium-duty trucks. While While it it is truetrue that that many many fleets fleets own own the the vocational vocational trucks trucks for for the the entire entire lifetime lifetime of of the the trucks, the the fleetsfleets would would want want to to see see a a shorter shorter payback payback time time for for their their additional additional investment investment in in electric electric trucks.trucks. This This payback payback period period could could be be as as low low as as 3 3 years. Class Class 4 4 delivery truck designed andand driven driven for for a a daily daily trip trip of of 75 75 miles miles is is used used for for this this analysis. analysis. Figure Figure 8 shows the purchase priceprice estimates estimates and and the the difference difference between between the the diesel diesel and electric truck prices. If If battery costcost drops drops below below $170/kWh, $170/kWh, then then an an electric electric truck truck is is cheaper cheaper to to purchase. purchase. We estimate the energy consumption of 770 Wh/mile for the delivery truck. The operating cost associated with this is roughly 8 c/mile if the price of electricity is assumed as 10 c/kWh. For a diesel truck, the fuel cost will be 24 c/mile to operate at $3/gallon. For every mile, the EV will save 16 c for the operator. At 18,000 miles a year, savings for the operator is $2900 per year. The present value of such savings over the future years is quantified as shown in Figure9.

Figure 8. Estimated purchase price of diesel and electric trucks designed for 75 mile range.

We estimate the energy consumption of 770 Wh/mile for the delivery truck. The operating cost associated with this is roughly 8 c/mile if the price of electricity is assumed as 10 c/kWh. For a diesel truck, the fuel cost will be 24 c/mile to operate at $3/gallon. For every mile, the EV will save 16 c for the operator. At 18,000 miles a year, savings for the operator is $2900 per year. The present value of such savings over the future years is quantified as shown in Figure 9. World Electr. Veh. J. 2021, 12, x 9 of 11

Figure 7. TCO parity check for class4 delivery truck with reduced VMT and resized battery pack.

If a delivery truck is designed for 75 mile range and driven 75 miles every day, it would have TCO parity with a diesel truck even if the battery cost is $300/kWh, if the recharging of battery could be achieved at 10–12 cents per kWh.

6.2. Impact of Shorter Service Period This study assumes a service period of 15 years for medium-duty trucks. While it is true that many fleets own the vocational trucks for the entire lifetime of the trucks, the fleets would want to see a shorter payback time for their additional investment in electric trucks. This payback period could be as low as 3 years. Class 4 delivery truck designed and driven for a daily trip of 75 miles is used for this analysis. Figure 8 shows the purchase World Electr. Veh. J. 2021, 12, 75 price estimates and the difference between the diesel and electric truck prices. If battery9 of 10 cost drops below $170/kWh, then an electric truck is cheaper to purchase.

WorldWorld Electr. Electr. Veh. Veh. J. J. 2021 2021, ,12 12, ,x x 1010 ofof 1111

Figure 8. Estimated purchase price of diesel and electricelectric trucks designed for 75 mile range.

FigureFigureFigure 9. 9.9. PresentPresent value value of ofof fuel fuelfuel savings savings overover the the serviceservice periodperiod ofof thethe vehicle.vehicle.

IfIfIf the thethe value valuevalue of ofof fuel fuelfuel savings savingssavings exceeds exceedsexceeds the the purchase purchase price price difference difference we we see see in in Figure Figure 8 8,8,, thenthenthen the the investmentinvestmentinvestment on onon an anan electric electricelectric vehicle vehiclevehicle is isis a a gooda goodgood investment. investment.investment. If theIfIf thethe payback paybackpayback period periodperiod is set isis setatset 5 atat years, 55 years,years, then thenthen it would itit wouldwould be justiﬁable bebe justifiablejustifiable to pay toto paypay about aboutabout $12,000 $12,000$12,000 more moremore for forthefor the electricthe electricelectric truck. truck.truck. ForForFor various variousvarious service service durations, durations, the the TCO TCO parity parity with with dieselsdiesels isis achievedachieved inin thethe shadedshaded regionregionregion shown shown in in Figure Figure 10.10 10.. A AA vehicle vehiclevehicle thatthat willwill bebe usedused forfor 15 1515 years yearsyears can cancan save savesave closeclose toto $26,000 $26,000$26,000 ininin fuel fuelfuel cost cost over over the the serviceservice period,period, andand itit willwiwillll bebebe viableviableviable even eveneven if ifif battery batterybattery costs costscosts $300/kWh, $300/kWh,$300/kWh, butbutbut if ifif the thethe electric electricelectric truck truck should should achieve achieve TCO TCO pari parityparityty inin 33 years,years, thethe batterybattery costcost willwill havehave toto dropdropdrop to to $275/kWh. $275/kWh. Diesel $3/gallon Diesel Diesel $3/gallon Diesel Electricity price ($/kWh) price Electricity Electricity price ($/kWh) price Electricity

Figure 10. Impact of service duration on TCO parity of a class4 electric truck. FigureFigure 10. 10. ImpactImpact of of service service duration duration on on TCO TCO pa parityrity of of a a class4 class4 electric truck.

7.7.7. Conclusions Conclusions ThisThisThis study studystudy shows showsshows that thatthat ‘Light ‘Light HD’ HD’ trucks trucks are are the the mostmost promisingpromising amongamong thethe vehiclesvehicles consideredconsideredconsidered in in this this study study to to achieve achieve TCOTCO parityparity withwith diesels.diesels. Class Class 8 8 longlong haulhaul operationsoperations areareare thethe mostmost challengingchallengingchallenging use useuse case casecase for forfor electric electricelectric trucks truckstrucks to toto achieve achieveachieve economic economiceconomic parity parityparity with withwith diesels. die-diesels.sels. Economic disadvantages in having a generic design that can meet a 99 percentile use caseEconomic isEconomic illustrated disadvantagesdisadvantages in this work. inin An havinghaving underutilized aa genericgeneric designdesign battery thatthat is a cancan major meetmeet hurdle aa 9999 percentilepercentile in achieving useuse caseTCOcase isis parity. illustratedillustrated For class inin thisthis 4 delivery work.work. AnAn trucks, underutilizedunderutilized it was found batterybattery that TCOisis aa majormajor parity hurdlehurdle could in bein achieving achieved,achieving TCOTCO parity.parity. ForFor classclass 44 deliverydelivery trucks,trucks, itit waswas foundfound thatthat TCOTCO parityparity couldcould bebe achieved,achieved, eveneven withwith currentcurrent batterybattery prices,prices, ifif thethe vehiclvehiclee isis designeddesigned andand usedused forfor shortshort routes.routes. SuchSuch aa designdesign maymay notnot meetmeet thethe needsneeds ofof allall fleets,fleets, butbut therethere couldcould bebe real-worldreal-world usersusers whowho cancan successfullysuccessfully adoptadopt electricelectric trucks,trucks, eveneven ifif thethe papaybackyback periodperiod isis relativelyrelatively short.short. ThisThis alsoalso pointspoints toto thethe needneed forfor modularmodular batterybattery sizessizes basedbased onon specificspecific needsneeds ThisThis studystudy highlightshighlights thethe needneed forfor additionaladditional researchresearch byby consideringconsidering real-worldreal-world useuse casescases andand exploreexplore howhow additionaladditional powertrainspowertrains comparecompare toto conventionalconventional vehiclesvehicles inin thethe nearnear future.future. VariationsVariations inin dailydaily drivingdriving distancedistance maymay bebe unavoidableunavoidable forfor manymany useuse cases.cases. FastFast charging charging EVs EVs or or PHEVs PHEVs could could be be explored explored as as the the solution solution to to address address range range uncertain- uncertain- ties.ties. World Electr. Veh. J. 2021, 12, 75 10 of 10

even with current battery prices, if the vehicle is designed and used for short routes. Such a design may not meet the needs of all ﬂeets, but there could be real-world users who can successfully adopt electric trucks, even if the payback period is relatively short. This also points to the need for modular battery sizes based on speciﬁc needs. This study highlights the need for additional research by considering real-world use cases and explore how additional powertrains compare to conventional vehicles in the near future. Variations in daily driving distance may be unavoidable for many use cases. Fast charging EVs or PHEVs could be explored as the solution to address range uncertainties.

Author Contributions: Conceptualization, methodology, and formal analysis was carried out by R.V. Project administration, funding acquisition and review was provided by A.R. All authors have read and agreed to the published version of the manuscript. Funding: This work was supported by the U.S. Department of Energy (DOE), Vehicle Technology Of- fice, under the direction of J. Ward, under contract DE-AC02-06CH11357. The submitted manuscript has been created by UChicago Argonne, LLC, Operator of Argonne National Laboratory (“Argonne”). Argonne, a DOE Office of Science laboratory, is operated under Contract No. DE-AC02-06CH11357. The U.S. Government retains for itself, and others acting on its behalf, a paid-up, nonexclusive, irrevocable worldwide license in said article to reproduce, prepare derivative works, distribute copies to the public, and perform publicly and display publicly, by or on behalf of the Government. Authors would also like to thank their colleagues who provided the necessary support and feedback in making this study possible. Conflicts of Interest: The authors declare no conflict of interest.

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