Ready or Not: European Truckmakers Evaluated on Transition to Zero-Emission Trucks
Transport & Environment, in their “Ready or Not: Who are the Frontrunners in the Global Race to Clean Up Trucks and Gain Technology Leadership?” report, ranked European truckmakers’ readiness to transition fully to zero-emission truck (ZET) sales.
The report assesses the compatibility of their voluntary zero-emission sales announcements with climate needs and evaluates the extent to which they align their industrial plans and business activities with those targets. It aims to identify the gap between announcements and plans, emphasizing the role of regulation in ensuring a swift transition. The report also compares European manufacturers with their counterparts in the US and China to determine who is best positioned to lead the ongoing global race for commercial vehicle technology.
Scania, Mercedes-Benz Trucks, and MAN Take the Lead
Transport & Environment’s report identifies Scania, Mercedes-Benz Trucks, and MAN as the three European frontrunners based on their announced ambition and strategy. All three manufacturers aim for 100% new ZET sales by 2040 or earlier.
Volvo Trucks, the current market leader in battery-electric truck sales in Europe, sets the most ambitious 2030 target with a goal of a 70% ZET sales share. However, Volvo has not fully committed to relying solely on zero-emission technologies in the long term.
Lagging behind in the transition are Renault Trucks and IVECO Group, while DAF ranks lowest among legacy manufacturers due to its lack of a public ZET target for 2030 and poor performance in the battery value chain.
Threats from Tesla and BYD
When considering global readiness, European manufacturers have only four representatives in the top ten, as highlighted in Transport & Environment’s report. Tesla and BYD from the US and China respectively, pose a potential threat to established truckmakers.
These new entrants in the truck market have demonstrated their ability to rapidly scale up zero-emission manufacturing in the car segment, boasting strong battery supply chains and access to raw materials. In comparison, European manufacturers appear better prepared for the zero-emission transition, partly due to forthcoming stricter CO2 standards for heavy-duty vehicles (HDV) in the EU. However, the report notes a gap in some European manufacturers’ industrial strategies and emphasizes the importance of the speed at which the EU market must decarbonize compared to others, driving truckmakers to develop robust investment plans.
Challenges in Battery Supply and Potential Consequences
Transport & Environment’s report emphasizes the need for stronger action to secure battery supplies. Only Tesla, BYD, and TRATON’s Scania and MAN have secured long-term supplies of battery raw materials, primarily driven by their involvement in the car market segment.
Truck manufacturers less connected to the automotive industry face the challenge of building their own battery value chains through partnerships or in-house efforts to avoid being left behind. Without comprehensive battery ecosystems, Europe’s truck manufacturers risk having their leadership position challenged in the coming years.
The report highlights the dominance of China in the battery market, ensuring Chinese trucksmakers have no difficulty sourcing batteries. In contrast, the Inflation Reduction Act (IRA) in the US will boost battery manufacturing investments.
To prevent European truckmakers’ parent companies, e.g. Scania parent, Volkswagen, from prioritizing battery supply chain development in the US, where electric truck regulations are stronger, strong signals and actions are needed from European truckmakers and lawmakers.
To secure Europe’s position in the race for zero-emission commercial vehicles, the report suggests several measures for lawmakers to consider. These include setting CO2 reduction targets of 65% by 2030 and 100% by 2035, in line with leading manufacturers’ announcements.
The European Union should also extend the regulatory scope to cover small trucks, vocational vehicles, and non-certified vehicles to ensure all new trucks are regulated, as California did last April with its ban on gas and diesel truck sales.
Furthermore, the inclusion of fuels in the CO2 standards should be avoided, as fuel types such as biofuels and e-fuels are costly and ineffective. Notably, all leading European truckmakers are not in favor of this inclusion.
While European OEMs appear to be better positioned than their US counterparts regulatory gaps could threaten European leadership in both climate policy and commercial vehicle technology. A large part of the EU OEMs favorable performance is based on voluntary commitments, which in the absence of regulation might not be realized.
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