CONSULTANTS TO THE AFTERMARKET

Bill Wade

 

Heavy Truck Technology 2020: It Is Still About the Juice

Over the past few years, we have had the opportunity to work on emerging technologies being developed at several of the nation’s top university think-tanks and incubators.

We have seen generators that have only soapy water as by-product, with the capacity to recharge vehicle batteries on the road. We have seen avgas, jet fuel and diesel created from algae or wood pulp… creating only water as the waste material.

Building on this brush with energy innovation, we decided to take a look at the effects of the unbelievable speed of commercialization soon street worthy ideas will have on the truck market by the year 2020.

By Bill Wade
Wade&Partners

Let’s start with the obvious... fuel and energy are the wildcards in trucking’s future. While natural gas is the recently elevated heavy vehicle savior, electrics and co-powered diesel electric is still a consensus favorite.

For the next ten or so years, the purchase price of an electrified vehicle will probably exceed the price of diesel-fueled commercial models by thousands of dollars. This difference is due largely to the cost of designing vehicles that can drive for extended distances on battery power and to the cost of the battery itself.

What’s more, the infrastructure for charging the batteries of a large number of electrified vehicles isn’t in place, nor is the industry tooled to produce them on a mass scale.

Fleets may decline to buy electrified vehicles for any number of reasons: the distance drivers can go before recharging may undermine acceptance for all but domiciled fleets. But on a more fundamental level, electrified vehicles will go mainstream at a pace determined by government action:

  • to make diesel more expensive;

  • to reduce the cost of producing, buying, or operating electrified vehicles;

  • some combination of these two approaches.

As for trucks, even conservative futurists are betting on interference by government. They think that concern over energy security, fossil fuel emissions, and long-term industrial competitiveness will prompt governments to seek a partial solution by creating incentives—some combination of subsidies, taxes, and investments—to migrate the market to battery-powered vehicles.

Electrified vehicles can already address certain niches whose economics could be favorable more quickly, such as bus, delivery and taxi fleets in large cities. Military fleets may lead the way.

Truck OEMs Reinvent their Businesses

From a practical business standpoint, electrified vehicles pose an enormous threat to incumbent truck OEMs, including light, medium and heavy classes. The internal-combustion engine and transmission are the core components they have focused on, while outsourcing the manufacture of many other components and subassemblies.

In a world where vehicles run on electrons rather than hydrocarbons, the OEMs will have to reinvent their businesses to survive. Nonetheless, incumbency is also a strategic strength in this sector. New tech ‘attackers’ face significant entry barriers, including:

  • Manufacturing scale (including engineering prowess);

  • End user brand equity (now worldwide);

  • Channel relationships (suppliers as well as dealership networks),

  • Customer relationship management and market research;

Moreover, electrified vehicles support increased opportunities for incumbent vehicle assemblers. These vehicles could help them meet increasingly stringent emission regulations and avoid fines. The low-end torque of electric motors can accelerate vehicles more quickly, smoothly, and quietly, which could provide distinctive new value to buyers (and regulators).

Truck makers could also beat attackers to the punch in tapping assets such as plants and dealership networks to introduce new business models, such as selling transport services rather than products.

OEMs should also think about whether dealers like Rush or aftermarket players like FleetPride will sell (or lease) battery packs and about how the supply chain for electrified vehicles differs from the present one. Demand for lightweight materials will grow, while demand for exhaust and various emission systems will shrink.

The key question is whether these new technologies can be scaled. If they can, today’s constraints on biofuels—the declining quality of available land and “food for fuel” trade-offs—may diminish.

Major Structural Market Changes

Partially due to the pressure of new fuel efficiency pressures mentioned above, as well as the shifting economics of a worldwide supply chain, four issues arise as potential truck technology definers over the next seven years:

  • OEM Global Component Integration... The European design influence on class 7-8 tractors has been joined by the designs of Asian OEMs in class 5-6, creating a definite trend toward proprietary components in every system from the engine and drivetrain to headlight modules. This will create a shift in preference between independent repair shops and franchised dealers.

  • Supplier System Partnership... As a byproduct of the above, suppliers will be forced into alliances to produce synchronized system solutions for various major vehicle functions, often taking into account the geographic and political preferences of the OEM assembler. Thus, ‘mated components’ should become more prevalent as fewer specification choices are offered to fleet operators.

  • OEM Vocational Standardization... With an eye toward ‘world truck’ solutions, as well as increasing recognition of the enhanced economics of building ‘vanilla’ trucks, more OEMs will adopt the attitude that their vocational engineering is far superior to end user specification. This theory has been tried periodically by domestic OEMs, but never stuck. With increased overseas ownership of truck and component suppliers, this unified or universal vocational spec idea may have legs this time.

  • Severe Technician/Driver Shortages... Enhanced driver ergonomics will be one of the primary design criteria for the next few years. The cyclical downturn in the number of trained drivers, aggravated by inconsistent hours-of-service (HOS) regulations and CSA enforcement will make the drivers’ personal workspace a design focus. Likewise, limited technician availability will drive designers away from complicated diagnostic/repair to easily executed remove/replace maintenance solutions.

Who Knows?

When we started working in the world of product development at the science level… with real scientists and engineers... we were truly dumbfounded (on a daily basis) over the concepts in development. No more. We are now certain that whether we’ve captured all the cogent points here and on the following pages or not, the truck of 2020 will be a marvel that only slightly resembles today’s’ big iron.

 

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