April 17, 2018

Heavy-Duty Trucks - Automation and Alternative-Fuel Update

DAI GR, PCAR, VOLVB SS, WBC
By Lydia Norton
Increasing air disc brake penetration and driver assist technology are expected to advance automation in the United States, while the September IAA truck fair in Germany is expected to set the tone for alternative fuel options in Europe.
UNITED STATES
Driver Assist, Air Disc Brakes Advance

Five component suppliers and three fleets said advanced driver-assistance systems (ADAS) or components therein, such as lane keeping, should be available in trucks soon. Fleets appeared convinced of the safety benefits but said integration of systems by OEMs, along with costs, will be required before these new technologies are widely adopted. “Once the lane assist is available and tested, I could see quick uptake for safety reasons. Cost is always an issue,” a fleet executive said. Daimler AG, Wabco Holdings Inc. and Knorr-Bremse AG’s Bendix Commercial Vehicle Systems were cited as being most advanced with these systems. Just three fleets expect platooning to be adopted in their own fleets; one each expects it by 2020 and 2022, and another said adoption is several years out. “I could see us having advanced lane keeping in at least 10% of our fleet in less than five years. The technology is there; the struggle is with OEs and brake manufacturers and the technology companies getting together and reducing redundancy -- make it all click seamlessly,” a maintenance director of a large fleet said.

Penetration of existing products, like disc brakes (required for more autonomous trucking, including platooning) is increasing. For air disc brakes, such as those made by Wabco and Bendix, adoption is expected to increase in 2018 Class 8 truck orders yy. Seven fleets reported that their trucks ordered in 2018 will have the same or higher percentage of air disc brakes yy, including two fleets already at 100%. “We went 100% this year,” one said. Another source who had questioned the upfront cost in the past said, “We will begin incorporating air disc brakes in 2019, and I see it coming no matter what.”

EV and Electric Hybrids Attract Interest
Electric hybrids and EVs were deemed most likely to grow the fastest among alternative fuel proposals in the United States (as in January), but most sources were not able to give a timeline for likely adoption. “Adoption rates will depend on usage and oil prices. If we get to $100 oil again, we could see electric vehicles take off. Electric vehicles, whether all electric or hybrid, I would want to see 20,000 on the road before I really got interested, although it probably makes sense for Walmart-type fleets or those hauling goods for shorter distances,” a fleet executive said. In addition to established OEMs, like Daimler and Paccar Inc., sources said new OEMs could find a foothold if the timing was right. “Hyliion [Inc.] has a lot of potential. It is interesting for sleeper loads with the APU. The electric world is going to be fun. It will work better if they start small in regional apps while they build up range and prove themselves,” a director of fleet maintenance said.

EUROPE
Biennial German Truck Fair Expected to Set Tone for Alternative Fuels
European dealers so far have little information about each OEM’s offerings and performance regarding alternative fuels. In that context, sources in Germany (the largest European market for heavy-duty trucks) said the biennial IAA Commercial Vehicle trade show (Europe’s largest trade fair for transport, logistics and mobility, September 20-27 in Hanover) would set the tone in Europe for alternative fuel offerings and OEM positioning. A German Scania dealer said, “IAA later this year will show what manufacturers have in store. As far as I know, different manufacturers focus on different technologies.”

Five of 17 sources who responded said alternative fuels such as natural gas, electric hybrid or EV could represent 5% of their heavy-duty truck sales as early as 2022, but eight said it would take more than 10 years, because of the lack of infrastructure for gas solutions, the lack of autonomy for hybrid and electric solutions, the high purchase price of all alternative fuel solutions and the lack of information about each OEM’s offerings. A German Volvo AB dealer said, “We expect that orders for LNG trucks will represent about 15% of all our orders at the IAA fair. For the whole of 2018, we expect the share of LNG trucks sales to be 5%-10%.” A Spanish Volvo dealer said, “Substantial subsidies would be needed to incentivize customers to go into these new technologies. So far, all the side costs are immense; for gas, the truck itself is 40% more expensive than a regular truck, for example. And then, the resale value of those trucks will be close to nothing.”

Volvo Best Positioned for Gas Solutions
Western European sources still believe natural gas solutions will develop the fastest among all alternative fuel offerings for heavy-duty trucks, because of the lack of autonomy of hybrid and fully electric solutions. A German Scania dealer said, “Gas is the winner for long-distance traffic, I believe, and electric hybrid is the winner for distribution and smaller traffic that require less autonomy. Electric solutions will [be for] lighter trucks, up to 7.5 tons.”

Volvo was again cited as the most advanced brand for alternative fuel technologies, with most citing its natural gas solutions, but several also cited its hybrid and fully electric solutions for its smaller truck segment. A German Volvo dealer said, “LNG gas trucks are already available, 40 to 120 tons, and the infrastructure is under construction. LNG has a strong lobby…It is a fact that the federal German government will subsidize this. It is the only technology that has a reach of 1,000 km. It is safe, and economically sane. At Volvo, you can order these trucks as of calendar week 11 this year -- that means now.” Mercedes and CNH Industrial N.V.'s Iveco were most often cited as the most advanced OEMs for fully electric solutions, but sources said it applied to medium-sized and light commercial vehicles, not yet heavy-duty trucks. A German MAN dealer said, “Almost all manufacturers focus on different technologies. For electric solutions, Iveco and Mercedes are the most advanced. Iveco is already conducting trial runs in Austria for electric solutions.”

Autonomous Trucks Remain Distant Topic, Despite Tests in U.K., Poland
The topic of autonomous trucks remains a very distant one for the vast majority of Western European dealer sources, and the recent accident with an autonomous car in the United States led them to think solutions in Europe would be even more difficult to find because of the mosaic of countries with different legislation and road sizes that represent the European Union. Yet, there are platooning tests scheduled to run in the United Kingdom and Poland in 2018, as already reported by OTR Global in January. A German Volvo dealer said, “I don't see autonomous trucks or platooning solutions fully introduced at mid-term horizon -- not in the next 15 years. There are so many unclear questions: liability questions, logistics, HR questions, insurance... All the "risk fields" have not yet sufficiently explored and solved. How will such a platooning convoy drive in Russia? There are so many countries on the European continent -- so many different legal situations and perspectives on solving issues.” A Polish DAF dealer said, “The Minister of Transport made some announcement regarding a budget allowing testing of autonomous trucks on public roads, but we will see -- a lot is said, and little is done."

ADDITIONAL QUOTES
United States
On Automation and Air Disc Brakes

“Adoption will likely be with fits and starts once the next iteration of CMS [collision mitigation system] is rolled out, making it more integrated. Once people try it, they adopt it. It doesn't go backward.” Fleet

"Lane assist is getting more testing. 2018 will be another strong year for air disc brakes in tractors." Component supplier

"It will take longer than some expect to adopt technology that gets us close to autonomous trucking. It's taken a long time for disc brake adoption in the United States, like 10-17 years to go from when brakes were available and the level of penetration today. That may shift as more young people take over roles. They are more used to the technology. It may take a leap quicker if it is not a financial burden." Component supplier

"Companies waffling over adoption and investment could hurt because the technology exists but it has to be made to work across the different aspects of the truck. Development of infrastructure is vital to the adoption of technology. Companies that have fleets that return to the same location each night and are not used 24/7 is probably where adoption will happen quickest because they can develop infrastructure with a reasonable payback period." Component supplier

"We need legislative regulation to see it become widespread. Another factor would be if OEs, like Daimler, who is making Daimler Assurance, get proprietary product then they are more inclined to make it a standard option on their trucks. But adoption should happen quickly once an integrated approach is available. The ROI is there, the safety features are there." Component supplier   

On Alternative Fuels
"I think the pendulum has swung too far right now. A lot of folks seem be adverse to hybrids. They want electric, but there are still range issues for some applications. People want CARB funding and other government subsidies, and you get those with EV. But EV still needs more advanced battery technology for many applications or range extenders." Component supplier

"Tesla [Inc.] understands the infrastructure needed, not a believer in Nikola [Corp.]. Among the big four, three are big bureaucracies that find it hard to be nimble. I think Navistar [International Corp.]'s troubles have made it more lean. The guys there are all ex-GM. They know how to implement technology well. The tie-up with Volkswagen [AG] could give them a leg up. Paccar may surprise everyone. They are testing several options. Cummins [Inc.] is reacting very well to EV. I am surprised at how little Allison [Transmission Holdings Inc.] and Eaton [Corp. PLC] have dedicated to EV." Component supplier

"Paccar has been testing their safety truck longer. [Daimler] is close. Volvo has some activity. Navistar is working to reestablish themselves. They are working more through partnerships with aftermarket companies than doing things internally." Component supplier

Western Europe
On Alternative Fuels

“Demand for alternative fuels is quite limited as infrastructures are not set up.” French DAF dealer

“There is no demand for alternative fuels from customers; it's pushed by the marketing departments of large retailers.” French Mercedes dealer

“We will soon be delivering fully electric trucks, and I think dump trucks will be our first sales. Fully electric trucks will first concern trucks that do only 150-200 km per day. Actually, we see that all OEMs are moving so quickly with alternative fuels that it might all happen very fast... Personally I think cell fuel trucks will be very interesting. There already are tests made, but a truck costs €700,000 so far.” Benelux Volvo dealer

On OEMs
“We at Volvo will be delivering those gas trucks at the end of the year, and we see that demand is actually developing fast, so strong the anti-diesel movement is.” Benelux Volvo dealer

“CNG gas solutions will develop the fastest for sure, because of security and costs. The fully electric engines are not fully efficient, and hybrid solutions are too expensive.” Polish DAF dealer

“DAF is pushing for electric and does not believe in gas technology or ethanol. DAF will test this year a 100% electric 12.5 ton truck in urban zones.” French DAF dealer

“The Iveco CNG truck is more expensive by €40,000 compared to a diesel version. No one is buying without incentives.” Italian Iveco dealer

 “I hear Tesla is moving forward faster than expected with its electric trucks.” U.K. DAF dealer

On Automation
“Safety -- that's the point. Recent accidents in the U.S. do not make it easier. Let's remember that it was only for passenger cars." Polish DAF dealer

"Currently, almost all truck manufacturers work and autonomous cars, but the most advanced is Volvo.” Polish MAN dealer

“The next thing we are looking at is intelligent maintenance solutions: The truck will be able to see the problems before they actually occur; it saves time at the maintenance department.” U.K. DAF dealer

Contributors: Sylvain Gavard, Glauber Goncalves, Enrico Gualandi, Birgit Heitfeld, Azim Mamanov, Fabrice Pozzoli-Montenay, Roksana Ulatowska and Julie Woodruff

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