Truckmakers Seeing More Profitable EV Results than Carmakers. Plus, What’s Up at ACT Expo

While Ford is one of the few global automakers to report losses from electric vehicle sales, it’s not the only one by far.

For full-year 2023, revenue was up 11% to $176 billion for Ford Motor Co. Net income improved year-over-year to $4.3 billion; but the company also reported that it took $4.7 billion in losses for the EV division last year — and that it’s on track to lose another $5.5 billion this year.

Ford and General Motors say that they’re able to fall back on hybrid and gasoline-powered passenger vehicles to offset those losses; with pickup trucks being particularly profitable. EV losses are coming form slashing prices following Tesla setting up a price war, according to Ford. It’s also about the cost of battery packs needed to power long-range, high-performance EVs.

A solution that Ford is working on starts with supply-chain collaboration to reduce the overall production costs. Other automakers may be doing the same.

According to a March 2024 study by Boston Consulting Group, automakers are losing as much as $6,000 per EV that’s being priced at around $50,000.

“Creating the bridge from ICE to EV, you need to add the cost of the battery, which is about $10,000,” Andrew Loh, Managing Director and Senior Partner at BCG said to InsideEVs. “You add the e-powertrain and incremental electronics, which is about another $5,000. And then you need to add the incremental investment and labor and overhead.”

With ACT Expo open to attendees, you can can expect to roam the exhibit halls in Las Vegas and see more trucks than ever before. They might be powered by hydrogen, natural gas, propane, hybrid powertrains, and plug-in hybrid and battery electric powertrains.

Electric trucks have become more important in recent years to this audience of OEMs, suppliers, and end users that include fleet managers and fleet operators in trucking and urban delivery, utility fleets, government fleets, and companies needing trucks of all types in medium-to-heavy-duty.

So I took a look at two major truckmakers who’ve had a significant presence in the market and at ACT Expo.

Volvo Trucks, being one of them, delivered 1,977 of its electric trucks during 2023, an increase of 256% compared to the previous year, according to the company. That comes from a company that saw strong overall performance last year. “Thanks to our strong finances, we can continue to provide a good return to our shareholders and at the same time invest in and seize opportunities in the ongoing industry transformation to more sustainable solutions,” Volvo Group said in a company statement.

Volvo Group CEO and President Martin Lundstedt during the first quarter earnings call expressed optimism about the company’s ability to retain production flexibility, cost control, and pricing discipline while also investing in new technologies. That will include battery-electric trucks and internal combustion engines running on alternative fuels. During the first three months of this year, Volvo finalized the acquisition of Proterra’s battery business and signed a final joint venture agreement with high-pressure, gas-injection fuel system developer Westport Fuel Systems.

For ACT Expo, Volvo Trucks North America (VTNA) and Volvo Financial Services (VFS) announced that they’ve joined forces to form Volvo on Demand, a collaborative initiative based on the Truck-as-a-Service (TaaS) business model. Using 25 Class 8 Volvo VNR Electric trucks, Volvo on Demand offers clients the opportunity to simplify the acquisition and reduce the major upfront investment in battery-electric vehicles. Volvo on Demand provides qualified customers with flexible term options as short as 12 months and includes Volvo Trucks’ Gold Contract and the option to bundle vehicle insurance for physical damage and collision, route planning, and optimization guidance; as well as consultation to find the best charging solution and incentives that might be available. 

Daimler Truck reported record results in 2023, including a 39% increase in profits over 2022, and more than half of those profits came from North America. Daimler Truck North America (DTNA) prides itself on having become a leader in the development of commercial electric vehicles since 2018. 

In 2023, DTNA sold 3,443 zero-emission trucks and buses, which is 277% more than the previous year, the company reported. DTNA’s electric lineup includes the Jouley bus, the FCCC MT50e van chassis, and the Class 8 Freightliner eCascadia. However, in 2022, DTNA built excess capacity to build 2,000 Class 8 battery-electric trucks, but sales were low due to a lack of charging infrastructure. DTNA plans to have 100 Freightliner dealer locations certified by 2025. 

Truckmakers have seen strong results in providing a high-quality lineup of electric trucks along with specialized services meeting the needs of the fleet market.

In March, DTNA announced rapid expansion of its BEV Dealer Certification throughout its Freightliner dealer network. The plan aims for having 100 dealer network locations certified by 2025. The company has been working on adding technical and support services since establishing its commercial electric vehicle development strategy since 2018.

Another step in this direction was announced earlier this month with Daimler Truck setting a goal to integrate zero emissions and road safety by combining its battery electric drive and integrated autonomous vehicle technology. That will be taking shape through the autonomous Freightliner eCascadia technology demonstrator. The demonstrator truck is based on a production battery electric Freightliner eCascadia and is equipped with Torc’s autonomous driving software and the latest Level 4 sensor and compute technology. This will eventually enable Level 4 autonomous driving. Torc Robotics is Daimler Truck’s independent subsidiary for autonomous virtual driver technology, the company said.

And in other news……….

Highlights from ACT Expo: Attendees made it over to Las Vegas for  ACT Expo 2024 with signs of record-breaking attendance with nearly 500 exhibitors showcasing over 200 cutting-edge technologies. The State of Sustainable Fleets saw its fifth report come out. Highlights from the study include getting a good handle on the implications of California’s Advanced Clean Fleets rule and the U.S. EPA’s Clean Trucks Plan, both setting stringent new emission standards and mandates for zero-emission vehicles. It also explores developments in the markets for renewable fuels and electricity paired with diesel, near-zero, and zero-emission vehicles; and a look at the historic investments and innovations in renewable fuels, charging infrastructure, and future engines. You can also find out who won the 2024 Fleet Awards. GNA (a TRC Company) President Erik Neandross said during his introduction that Tesla agreed to address the ACT Expo audience for the first time this year, with Dan Priestley, the Semi program’s senior manager coming out to speak. The Tesla Semi has had some excellent test fleet performance. PepsiCo has run more than 1,000 miles with one of its three Tesla Semis in a 24-hour period during NCAFE’s Run on Less Electric demonstration last year, with the other two totaling 754 and 808 miles, respectively, the company reported.

J.D. Power study on EV interest: Americans’ interest in electric vehicles has decreased compared to 2023, according to a new J.D. Power study. Concerns over cost of the electric cars and available charging has been part of it. For the first time since the U.S. Electric Vehicle Consideration study’s launch in 2021, analysts saw a decline in consideration of EVs by new-car shoppers. Those car shoppers “very likely” to consider purchasing an EV came in at 24%, down from 26% a year ago. Those who are “overall likely” to consider purchasing an EV also decreased, from 61% in 2023 to 58% in this year’s study.

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