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SEASON TWO

SEASON INTERSESSION: EPISODE TWO

IS TRUCKING CHARGING TOWARD AN ELECTRIC REALITY?

Right now, in the ports of Southern California, product planning, purchasing, and regulatory forces are coming together to lay the groundwork for first real electric ecosystem. Grants and incentives make EV technology attractive for both new truck manufacturers and buyers. So, host Dan Ronan wonders, could what’s happening at the ports of Southern California have consequences for the way the rest of the nation experiences an electric future? To find out, he spends time with the head of product planning for a major truck manufacturer and the policy expert with an eye on sustainable trucking. Tune in.

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FEATURED GUESTS

Keith Brandis has served as vice president of product planning for Volvo Trucks North America since 2009. He began working with Volvo in 1980 at its cab assembly plant in Dublin, Va. He later moved to its Greensboro, N.C., headquarters to become a sales engineer and sales trainer, and in 2001 took over Volvo’s marketing department and business development

Mike Tunnell is the Director of Energy & Environmental Affairs for the American Trucking Associations. Mike has been working on energy- and environmental-related regulatory and legislative issues for ATA for more than 20 years. During this time, Mike has helped develop ATA positions on a number of unique rulemakings affecting trucks and trailers ranging from federal greenhouse gas emissions standards to California’s in-use emissions standards. .

Keith Brandis

Mike Tunnell

EP. 2

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Episode Transcript

From Transport Topics in Washington D.C. This is RoadSigns. Here's your host, Dan Ronan.

Dan Ronan: Hello and welcome to RoadSigns from Transport Topics, I'm Dan Ronan, the associate news editor here at Transport Topics. In this podcast we'll be examining the emergence of electric power trucks and their place in the transportation industry. All of the major truck manufacturers are investing heavily in electrification and so are a number of startups and newcomers to the trucking industry. But how soon will these fleets be willing to deploy these electric vehicles and what are some of the opportunities and challenges that lie ahead? To help answer these questions we're pleased to welcome Keith Brandis. He is the vice president of product planning for Volvo Trucks North America. And joining us a little later will be Mike Tunnell. He is the director of Energy and Environmental Affairs at American Trucking Associations. We begin first with Keith.

Thanks for joining us. Now where are we at right now as we come to the end of a year in terms of one that's been very exciting with regards to some of the things that are taking place with electric trucks?

Where are we at right now in terms of the development and the acceptance of by not just the manufacturers but by the fleet owners and operators?

Keith: So I think 2018 when we look at the year was a lot of announcements beyond just the truck manufacturers, also suppliers and other startups. And now we're seeing that real plans are in place and we expecting in 2019 to actually be putting trucks on the road and preparing for commercialization. You know after that so we're moving into real vehicles. We're actually putting parts together we're building those real vehicles that will go into customers’ hands towards 2019.

Dan: You're at a stage in your career where you've got almost 40 years in the trucking industry. Is this something that is commercially viable or is this something that is a fad, what do you think?

Keith: Well, when you say almost 40 years I feel old when you say it that way but in the nicest possible way. I have a passion for this business. And I think when you're around the business and you meet so many people that have been in it for years so many families that are second- and third-generation owners or operators or drivers and the like that you realize that we have an important role to move the economy forward and not only deploy people but also get goods and services where they need to be is the thing. I think we're still feeling the benefits of that. And I know that's helping trucking because it's actually more truck movements not fewer as a go between the distribution centers. And I see that this whole conversation about connectivity, automation, electro mobility, we're at the early stages but this will come in and it is already starting to show the benefits when they get fully developed that customers will be able to optimize towards their business model. Think about sustainable transport in terms of now you can have a zero-emission footprint. And that's what we're really striving for and in certain communities in California and the like that have an air quality problem. They want that ultimate solution. And they're pushing us but we're also we're investing in preparing for that ultimate solution. We talked about connectivity. It's more than just knowing where that load is. It's also how can we keep the uptime of the vehicle. And in terms of automation it's helping the driver to be more productive and safer. How can we become the more eyes and ears that are possible to eliminate some of the blind spots around the peak. All those kinds of things we're working on and it's a very exciting time.

Dan: What about Volvo's involvement in Southern California at the ports? Tell us about what's taking place there in an area of the country that does have some real serious challenges with regards to air pollution and the like there have been around for many years and there they're working very hard to try and solve those problems.

Keith: So we've been awarded a bid that we proposed to California (Air) Resources Board called LIGHTS, Low-Impact Green Heavy Transport Solutions, which is an end-to-end. It's a complete zero-emission target that we've set for a facility that includes not only the trucks and the truck charging infrastructure but also solar power and solar harvesting and includes forklifts, electric forklifts, electric yard jockeys. It's trying to make that complete customer enterprise energy sufficient. So we're very excited about how getting the incentive funding and grants that we needed in place but also working with customers and working with our dealer and working with suppliers and partners, 16 different partners in order to put together this complete eco system. And it addresses the critical issues as you said in Southern California in terms of air quality.

Dan: Is this transferable this technology once this once you have some information that you can start that your crew can crunch the numbers or really can some of these lessons be used in New York, New Jersey, or Baltimore, Savannah, other places that may not have air quality issues to the extent that Southern California does? But they just want to run a more efficient operation. They want to lower their carbon footprint. Can they use some of these ideas and say well they did this at Long Beach in Los Angeles? Let's try this here at our facility.

Keith: We're getting a considerable amount of interest from like you said these municipalities as well as major accounts in those areas that have set sustainability goals or you know that they're looking at their carbon footprint. So I don't think it's just so that California will expand, the question for us and many others is in what manner do we expand. Because you might imagine there's tremendous investments that are needed. We will have infrastructure concerns that have to be addressed. So we don't have yet the all the plans for how this could roll out. And it won't come through every community overnight. But we do see as you said that there are similar problems and we need the technology in order to solve those problems.

Dan: In the case of California there are government incentives that are worked into this contract with Volvo and others to make this work. We have a very robust infrastructure in this country right now to support the trucking industry through diesel both with private truck stops and all of the work that's been done over the last more than a half century. What is it going to take in terms of maybe not a dollar figure but public-private partnerships, investment and some degree of risk by the private sector to put in charging stations to put in different types of charging stations whether it be AC power DC power? This is not just something that's just going to pop up overnight and every truck stop along every exit ramp on the interstate.

Keith: Exactly and we get the chicken and the egg question all the time. When will the trucks be out there so they know that they're they should invest in and have these are the charging stations available and we said well the trucks will come when we have the charging stations. So I think the public-private partnership is an important ingredient. And we will have to take I think a geographic approach of where is the density that makes sense as well as how do we support the ecosystem how do we make and work with the policymakers as well as the various incentives that maybe it will only be needed in order for this to progress further.

Dan: Now many companies have already started doing this and have started. UPS has quite a lot of electric in their fleet to some certain degree. FedEx the same thing and as I was saying before in an earlier conversation I was at a new facility for UPS a couple of weeks ago in Atlanta where they have built into their infrastructure their new facility. They have built-in charging stations for their trucks and the like. So the companies themselves the fleet owner-operators are going to have to put some capital into that as well if they want to get into this as well especially if it's on their own property.

Keith: You're correct and when you talk about a greenfield experience where you're planning for you know a building and you're working with the utility companies to run the right level of line in there and have this transformer sized correctly, dedicated bays for the charging stations to be secured all of those things you said can go through the permitting and longer term and that may be one or two years. When you talk about change in an existing facility that's when it gets tricky and there you have to bring in the utility company, you have to bring in your local fire marshall, there's lots of other entities that maybe you didn't think about right before you just start to add you know several trucks at once in terms of your charging most facilities are only a couple hundred kilowatts, 305 or so kilowatts and then we're talking about one megawatt when you want to charge several trucks at once so your utility company may have to make changes in order to provide that. And then of course you need to think about backup power, standby power. What happens when you know the hurricane or storm comes through your genset today is probably not sized for that type of needs and supply. So all of these things that we're working with these particular customers and particular locations to address on a site-by-site basis

Dan: You had mentioned before about maybe some areas of the country that might be more amenable to this right off the bat. Densely populated areas. And also again to use the example of smaller trucks many companies especially in large municipal areas with shorter range distances to 200 to 300 miles a day. Electric trucks would be perfect in those locations is compared to somebody who's gonna do 600 miles over the road during the course of the day so maybe we start in going into Manhattan or going into the central district of Boston or Washington D.C. and then expand out from there. Is that is that a feasible plan of attack you think?

Keith: I think we're starting to see the first signals of that and as you mentioned FedEx and some of these other large fleets have already ordered some light-duty vehicles for that last mile in those city deliveries, pick up and deliveries where I think for heavy trucks that the real challenge is do we have enough footprint? Do we have enough volume there to be a payback? And it may be expensive when a when a fleet is investing significant sums of money in the capital and facility changes with only a couple of trucks. It's going to take a longer time to pay that back.

Dan: What about weight because every pound that you have to put in for batteries you end up sacrificing a pound of cargo. What about weight?

Keith: When I first thought about taking the diesel engine out that weighs 2,000 pounds on a transmission that's a couple hundred pounds. I thought well this should be weight neutral even swap. So I'll help you out but what I found is that in order to get the batteries to meet the safety standards we put a cage around the batteries to protect them from accidents. We also have a lot of controllers which have to be cooled onboard charging and switching components that are added so when you start to add all of these things on a truck. All right. You're not reducing weight. In fact you have kind of a weight penalty especially in terms of rain. So the more range that you want the more battery capacity that you're going to have to add and therefore the tradeoff against the range.

Dan: Couple more points real quick with regards to drivers this is going to require a different style of driving because you won't have the auditory feedback that you get now when it comes to driving a diesel.

Keith: I think drivers will be able to adapt pretty quickly. I typically drive a desk even though I have a commercial drivers license and I was able to get behind the wheel and operate a vehicle pretty safely on a test track. I wasn't doing real work with it but you know the thing that we're trying to do is to make it seamless. We will have changes to the display and instead of a fuel gauge we're going to have a range gauge and you'll also be able to get an indicator whether you're driving efficient or you're not driving efficient. So we will provide that information to the driver. And I think that will make the transition easier.

Dan: OK. Very good. Keith Brandis, he is the vice president of product planning for Volvo Trucks North America talking about a very exciting set of changes that are taking place in the trucking industry one less. Are you optimistic about this? I mean this is this is a big change optimistic about this?

Keith: I'm very optimistic. For me this is a big change in my career. After working with a typical truck technologies for many years to take this leap and say OK I'm going to focus and that's what I'm planning to do is in the new year really focus on making the lights project for us a win not only for our company but also for the customers for that for the charging infrastructure all of these partners have some skin in the game and they want to see it succeed and how can I help us succeed and make Volvo trucks a part of sustainable transport.

Dan: Keith Brandis the vice president of product planning for Volvo Trucks North America. Thanks for joining us on RoadSigns.

Dan: And now joining us from Southern California is Mike Tunnell, the Director of Energy and Environmental Affairs with the ATA. Mike, thanks for joining us since you work in Southern California. This really is one of the places where if there is a ground zero if you will in the issue of electrification of trucks from both a policy and a manufacturer's standpoint it sure seems like Southern California is the place to be right now.

Mike: Yeah it sure is. Yeah. There's manufacturing going on electric truck manufacturing in southern California basin and then the ports are looking at how to electrify the trucking fleet there.

They have a long-term commitment that would ultimately result in the operation on electric trucks in and out of reports of L.A. and Long Beach.

Dan: Are the ports going to be the first place where we see a real lot of activity taking place because of just the sheer volume of trucks and vehicles that are in a very condensed space?

Mike: Well it depends. Because the caveat I would put on that is the port you're requiring a very large Class 7, a vehicle to be electrified and pulling a container out of the port wave. So you're pulling a lot of weight. So is the ability of electric trucks to meet that duty cycle will be the question. The other area that may be more attractive is small package car in urban delivery stop-and-go applications you know, potato chip delivery trucks things like that that haul less weight so you can get by with fewer batteries, a smaller vehicle profile. So we may see activity electric truck activity those areas move forward before you get to the class A.

Dan: What type of grants and tax benefits tax credits are available to fleet owner-operators to move in this direction, what is the state offering?

Mike: Yeah. California has some of the largest incentives for vehicle acquisition that they have a program called HVIP and it offers $165,000 for electric class a truck to offset some of the purchase price. And then you can get less as you go into the smaller vehicles but this program focuses on offsetting some of the higher upfront cost associated with electric trucks. And then California also through their low carbon fuel standard has produces credit when you use electricity as a fuel source for your vehicle. And I've seen estimates that you can get as much as $30,000 a year in credits from that program if you were running a class 8 for electric truck

Dan: At $165,000 in terms of a tax incentive that would pretty much cover the cost of a brand new class a truck wouldn't it. That's pretty close almost dollar for dollar.

Mike: Well and it's not a tax incentive it's actually purchased vouchers so you get $165,000 off the purchase price of a new electric truck. Now you know electric trucks are substantially higher cost than a diesel truck but yeah like you said that's pretty much the cost of an additional truck.

Dan: Yes that yeah that would knock a big chunk out. My guess wouldn't it. Good. Let me let me ask you this and want to just maybe put you on the spot a little bit, the California Air Resources Board has been controversial with regards to what some would say in the trucking industry and some would say and I'm not saying you are but some have said that the relationship at times has been somewhat antagonistic. How are you finding them to work with in terms of your relationship with them because you understand that as a government agency they have a different mission than what the trucking industry does ours seems is to is to move material on items as efficiently and as cost effectively as possible while they are their mission is to improve the air the air quality for the state.

Mike: Right. And they are very focused on their mission. So you know you kind of have to start there and realize that they will move forward with programs such as they have truck and bus roll out here to ensure that they're meeting their air quality goals. So as we move forward they're looking at programs such as electric trucks to meet further meet their air quality goals. And so while there trust that you know I will give them credit they make an effort to under try and understand the industry. The industry is very varied. So developing a rule that accommodates all the applications and in that trucking offers is very difficult.

So it's been tough for the trucking industry to be addressed by these rules just because of the variety that has happened. And then enforcement is the other side. They haven't done a very good job of enforcing the regulations they have when it comes to trucking they are trying to beef that up. But quite honestly it's been subpar. And so that's created unlevel playing field for compliant companies, non-compliant company versus non-compliant companies.

So those issues need to be fixed as they move forward in their future rulemaking which we know they will be pursued.

Dan: Are the OEMs pretty excited about the opportunity and the research that's taking place on electric trucks? Because it seems as though as we said in the intro all of the major manufacturers are investing in electrification. Plus there's a number of startups that have jumped in on this so it seems as though the manufacturing side of the house they realize that this is coming and this is coming pretty quick. So the time to get involved in it, is at this point.

Mike: Yeah I mean it's got to be an exciting time to be an automotive engineer working on trucks because the technology is unprecedented. Yeah that you're available. So I think everybody is excited about it. Now the prospect of a regulation you know adds a new dimension.

I think if it was just free market moving forward that would be one thing but adding the regulatory hammer over this creates some stress tension.

It's going to set a deadline. It's going to say this technology will be ready by a certain date and you guys need to meet it as a manufacturer. And that's what California is looking at. So that is going to be a high hurdle to hit.

Dan: What are the deadlines that are looming out there, what are the deadlines and calendar deadlines if you will that are really of the ones that are the big the big ones?

Mike: Yeah. In regards to electric truck this 2019 I expect CARB to look to adopt a regulation that fact that will require the manufacturers to produce a certain percentage of electric trucks in their sales volume so that, and it's all to be determined when they have to do that by, what that percentage is, what types of vehicles are required. So all this is, will kind of be developed over the next probably 12 months or less what the requirements will be.

Dan: Do you see straight electrification of trucks more traditional battery in the drivetrain system, more fuel cell being the prevalent way that will go as compared to some sort of a hybrid system that uses diesel in some applications but the electric motors and others which do you think is more likely to be if the marketplace decides, which is more likely to be the winner?

Mike: Yeah, yeah. That's a tough question but I would say the prospect of an all-electric zero-emission truck is probably where people gravitate towards because that has one technology whether it's fuel cell or electric it's in theory simpler to manage where it when you get in a hybrid, 1 you have emissions and 2 you have, kind of two different systems in place.

So you've become more complicated. So I think you know from the emission side and from the technology side it the preference is more towards the all-electric.

Dan: I did hear some comments to on that particular topic from Martin Daum with Daimler who said that with a diesel hybrid you still have the emission systems that are still have to be in place that have to be there. And do you have more weight because you have a diesel engine and you also have electric motors so he was not one who supported that. He seemed to think that if we're going to go in that direction it would either be with the fuel cell with hydrogen or some sort of a plug-in with electric that you drive the vehicle for two-, three-, 400 miles whatever the range is and then plug it in and get it recharged back up to a sufficient level to do the job the next day.

Mike: Yeah that's it. That seems like one approach although you could say hey the Prius has done pretty well. So yeah the possibility of some type of hybrid truck operation.

Now it's definitely attractive to some. Because then you would have the rain. It takes some of the range anxiety out.

Dan: Are you optimistic Mike in the closing moments that we have that the technology and the lessons learned at Long Beach, Port Los Angeles, Oakland and other ports on the West Coast someday will be transferable to other facilities in the country that are maybe not having the air quality issues that Southern California deals with but they still have to be in compliance and these lessons can be learned in the OEMs in the material they learn can be used in a way as well.

Mike: Yeah I, I'm very optimistic on the technology. I think the timing's a question. It will be the, you know, the prospect of moving to an electric truck is attractive if things play out right. And I think other areas would really look to that to address their community needs surrounding the ports and feel like electric zero-emission technology is where they want to be as well. But the real question is cost. I mean it needs to be competitive with the other options that are out there.

Dan: And that's the latest edition of RoadSigns and we wish to thank our guest who joined us for the discussion of the electrification of the trucking industry. Keith Brandis the vice president of product planning for Volvo Trucks North America. And Mike Tunnell the Director of Energy and Environmental Affairs with ATA in Southern California. Thank you for listening.