Pre-COVID 2019, I had the opportunity to meet with regulators, start-ups, material providers, utilities and state and regional government purchasing planners at several events.
I sensed a firm conviction from many that all the zero-emission trucks you could order would be available by today. They had been convinced by announcements from start-ups about how fast production would ramp up and convinced that the number of models being offered somehow would translate into real trucks coming out the door.
I even had an electric motorcycle manufacturer tout that EV companies could move much faster at launching products than manufacturers of internal combustion engines. Their eyes rolled and glossed over as I tried to explain the differences between taking orders and actually making production-level trucks. NACFE went so far as to publish its collective experience and thought leadership in a report in January 2020 titled Defining Production.
Here we are today in the Spring of 2022, and while there are reportedly more than 140,000 orders for zero-emissions Class 2b-8 vehicles, as of last December, CALSTART reported there were only about 1,250 ZEVs of all classes registered in the U.S. The massive show floor at this year’s ACT Expo was packed with ZEVs, battery electric, hydrogen fuel cell electric, hybrid electric, even a diesel-like engine that runs on hydrogen.
In Class 8 alone, I counted more than 10 manufacturers with ZEV offerings. Many of the sessions I attended talked about the new ZEVs going into production this year. NACFE’s position that many duty cycles are ready for BEVs today is described in detail in three reports published this year on terminal tractors, vans and step vans, and the most recent, heavy-duty regional haul. The fundamental need is still there: manufacturers need to make the trucks.
This last year we’ve seen just how challenging it can be to make and deliver vehicles. Every single manufacturer was impacted by a series of unpredicted challenges; from COVID, to container ships backing up at ports, from mispredictions of market demands, from slow downs in key raw material supplies and key components. Orders taken were delayed or canceled. Fleets saw cost increases on the trucks they were ordering. Used truck residual values went up with a decreasing supply of trucks and a greater demand because new trucks were less available. Spare and salvaged parts became valuable as supply lines were challenged to get new parts.
Order backlog has long been a metric used to forecast business activity, but it can be very deceptive. Plant capacity often limits how many trucks can be built in a given year. Once a factory introduces two or three shift operations, and does all it can to implement process improvements, at the end of the day it can still only make so many trucks. Once the order book has filled out for a year, orders going into the next model year are riskier for both manufacturers and fleets.
