Electric vehicles have been a hot-button issue for a long time in the trucking industry. However, recent events have shown how an unpredictable petroleum market can lower revenues for carriers, and the only way to offset the cost is to pass the expense onto consumers, which leads to lower demand. A recent survey from TravelCenters of America, Inc. has given insights into changing attitudes towards alternative transportation and cutting the diesel umbilical cord.
Electric Vehicles Are Here
Of the responses to the survey, the data showed that 20 percent already had electric vehicles in their fleets, with about 50 percent expecting to have electric vehicles by 2030. This is in line with other large carriers that have been using electric vehicles for LTL and last mile shipments. Amazon, UPS, FedEx, and even Walk-Mart have been circulating electric vehicles into their fleets to supplement or replace traditional diesel trucks.
Beyond Electric Vehicles
Almost 10 percent of those responding currently used compressed gas vehicles, and five percent are currently using hydrogen-powered trucks. While these types are outliers, and not many plan on adding more hydrogen or compressed gas vehicles to their fleets, the numbers alone are indicative that trucking companies are willing to explore options to reduce wildly fluctuating fuel costs.
Electric Fleet Growth by 2030
Many fleet owners responding to the survey from TravelCenters of America, Inc. said they had intentions of having electric vehicles that comprise up to 25 percent of their fleets by 2030. The plan serves two purposes. The larger “feel good” goal comes from the medium and heavy-duty “Zero-Emission Vehicle Action Plan.” In this agreement, 17 states have agreed to eliminate emissions from commercial and industrial vehicles by 2050. The first big milestone is for those states to reach a minimum of 30% electric vehicle use by 2030, with 100% usage by 2050.
The second, and perhaps more tangible aspect of both the survey and the Zero Emission Vehicle Action Plan, is fiscal in nature. For decades now, the trucking industry has watched fuel prices skyrocket, level off, drop, rise, rise even higher, and drop unpredictably. The two forces at play are investment groups and scarcity. Investors will pour money into the petroleum industry to drive up prices, knowing the trucking industry will have to eat the cost, and then pull money out when the economy starts to stagnate. The scarcity of petroleum-based fuel is both artificial and real. When prices plummeted in 2020 because of the pandemic, major companies in Texas and overseas cut back on production. This created artificial scarcity when the economy started moving again in 2021. The scarcity is also very real, in that there is a finite amount of petroleum to be mined. Electric vehicles, and the technology they use, will become more affordable over time, and the cost to operate and recharge is minimal and manageable compared to what we have seen with fuel prices over the past few months alone. Yes, prices are falling now, but that is not a permanent trajectory, making it more imperative for carriers to make the switch to electric vehicles.
The Cost of Switching to Electric Vehicles
Currently, the cost of switching to electric vehicles is still fairly steep, which is why trucking companies are gradually introducing them instead of performing total fleet conversions. Additionally, switching to electric vehicles does not take into account the limited number of charging stations at rest stops and along highways in the United States. There needs to be an expansion in infrastructure to allow electric vehicles to charge on the road, otherwise carriers will be severely restricting their shipping distances.
Saving on Fuel for Your Fleet
Most of the trucking industry still relies on diesel-powered vehicles. While prices are still falling, carriers and owner-operators would still like to save more. Single Point Capital provides steep discounts on fuel at over 5,000 locations as well as wholesale purchases. Our fuel discount program and fuel credit lines offer big savings to trucking companies and owner-operators who are already enjoying the benefits of our freight bill factoring services. If you want to lower fuel expenses in an unpredictable economy, contact the team at Single Point Capital today.