Navistar CEO to Tesla: We’ll Have More Electric Trucks Than You

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Trucks.com  /  January 2, 2018

Navistar International Corp. Chief Executive Troy Clarke has a message for tech entrepreneur Elon Musk: There will be more electric trucks on the road by 2025 from Navistar than semi-tractors from Musk’s Tesla Inc.

It’s all about familiarity, comfort and established customer base. Navistar’s International brand already holds 11 percent of the market for trucks in the heaviest Class 8 weight segment, according to research firm Statista.

Tesla, which introduced its semi in November, has collected hundreds of reservations. But it has yet to build a truck for a customer. It plans to launch production in 2019.

“Customers know us, and they know that when we give them a truck it gives them a guarantee that this truck is going to serve their needs, because we understand how our customers make money,” Clarke said in an interview with Trucks.com.

Navistar is developing an electric truck with help from its much larger partner, Volkswagen Truck & Bus. The German automaker owns 17 percent of the Lisle, Ill., maker of International trucks, IC buses, defense vehicles and engines. The two companies have a broad agreement to work together on vehicle development, new engines and purchasing to take advantage of volume discounts

They expect to have electric-powered medium-duty trucks and buses ready to launch in late 2019 or early 2020.

Clarke's comment “is not that outlandish of a claim,” said Brad Delco, transport analyst at Stephens Inc.

Navistar, like all major truck manufacturers, has an established network of dealers nationwide “to service the product and, more importantly, the customer who is using that product to earn a wage or put food on the table.” For these customers, Delco said, “time is money.”

Tesla sells its passenger cars direct to consumers via its own stores. It will have to build service centers for its truck or contract with a third party to provide maintenance services. There are 110 Tesla stores in the U.S. Freightliner, by comparison, has over 100 dealerships just in the Southeast.

With established brands such as International, Peterbilt, Kenworth and Freightliner, Delco said, “if something goes astray, those trucks get pulled into their dealerships to get fixed immediately, particularly when under warranty.”

Proximity to a dealership can make a big difference in how much income gets lost during a breakdown.

Although it is new technology, there looks to be a crowded market for trucks with electric powertrains. Legacy manufacturers, including Freightliner, Western Star, Kenworth, Toyota and diesel engine manufacturer Cummins Inc., are all also working on the zero-emission commercial vehicle technology.

There’s also a question of where the Tesla electric truck and similar vehicles from competitors fit into the trucking industry. Tesla models will come with two ranges, 300 miles and 500 miles, depending on the size of the battery. Rival trucks are expected to have ranges of as little as 100 miles, depending on the vehicle.

The absence of a sleeper berth rules out irregular over-the-road routes, Delco said.

In the less-than-truckload sector, he said, line haul routes between hubs run on average just over 500 miles per day. Since drivers are not going to push to the edge of their vehicle’s capacity, any electric vehicle would need to last more than 500 miles to make it a viable option, he said.

The other typical less-than-truckload route is local pickup and delivery. However, carriers generally use their older trucks for these routes, Delco said. After new vehicles on longer routes run out of warranty, they rotate to local routes to be closer to terminals in case they break down. So, he argued, the economics of buying new electric vehicles for those routes do not make sense for the industry as it works today.

Still, many in the industry are taking Tesla’s truck seriously.

The Palo Alto, Calif., electric vehicle builder has trial orders from companies like J.B. Hunt, Sysco, PepsiCo, Anheuser-Busch, Walmart and UPS.

Antti Lindstrom, the trucking industry analyst at IHS Markit, said he is waiting to see if Tesla trucks can deliver on their promised range.

“While we’re waiting for that to happen, the most realistic application are those local runs, like from the ports in California to an inland distribution point,” Lindstrom said.

More achievable in a shorter timeline, he said, would be a combination of battery electric with hydrogen fuel cell technology.

Toyota, for example, is testing a Class 8 fuel cell drayage truck in Southern California. Kenworth is also working on a Class 8 fuel cell drayage truck. Nikola Motor Co. has received over 8,000 reservations for its hydrogen fuel cell Class 8 sleeper and day cab models to be built by 2021, and Wabco Holdings invested $10 million in the Salt Lake City company last month.

Lindstrom said that carriers are placing orders with multiple manufacturers for alternative fuel vehicles, like Nikola.

“Some of the other players might not make as much noise, but everybody is in the same boat,” he said. “Tesla is basically securing financing right now.”

Given the early stage of the technology, he said, “at this point it’s anybody’s guess who will survive or who will be dominant in the future. Companies are hedging their bets, and they want to do their internal comparisons.”

Delco also said that UPS has made the largest Tesla order to date with 125 trucks. That’s still just a tiny percentage of the 200,000 new trucks purchased every year industry-wide. Companies such as Navistar regularly sell 1,000 trucks per order.

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[41chevy]

Tesla is doing nothing that any of the truck and auto manufacturers could or can do. His trucks are more expensive to purchase and I recall his designed charging system is not compatible with others.

Service on the systems it seems that Tesla relies on a sevice desk type diagnostic and software up date / repairs. My Tesla semi dies in  Northern Maine who does he send? The Tesla/Best Buy Geek Squad? No support or parts facilities does not instill confidence on my end.

In my opinion the Tesla would have much broader acceptance if the overall design was not so radical and some what more conventional looking. Also a lot of Tesla's ideas are already catching flak, the central drivers position, touch screens, full cameras and monitors, all great but to radical to be plopped in our lap all at once.  Look at the past the cutting edge designs of the past,  the Airflow, Delorean, Corvair and Tucker to name a few. Aeronautic, all too cutting edge and radical and not accepted at the time.     Paul

Edited January 3, 2018 by 41chevy