The semi truck is king of the road.
Weighing in at over 33,000 pounds, these beasts are nearly 10 times heavier than a small passenger car.
Driving on the road with these monsters can be anxiety inducing. No one likes being stuck driving between two semis.
Sometimes it can be downright aggravating. You can’t see around them, they’re slow to take off… you know the deal.
But trucking is truly important. Everything is shipped via truck: clothing, food, furniture, electronics, even truck parts. Chances are you couldn’t find a consumer product in your house that wasn’t shipped via truck before you bought it.
The American Trucking Association estimates 71% of all American freight tonnage is shipped via truck. Basically, nothing gets delivered without a truck of some sort somewhere along the way.
There are more than 15.5 million trucks on American roads today, and 3.6 million of those are heavy-duty semi trucks.
That means just as many jobs and a huge contribution to the GDP overall.
The U.S. Department of Commerce reports that spending in the American logistics and transportation industry totaled $1.4 trillion in 2016, 7.5% of U.S. GDP that year. And that doesn’t include the contribution of jobs to the economy at large.
No doubt, trucking is a huge industry. And amid the low-emission vehicle revolution, trucks have not been completely overlooked.
Major automakers like Tesla (NASDAQ: TSLA) and Toyota (NYSE: TM) are currently developing low-emission heavy-duty semi-trailer trucks. Both have even already produced prototypes.
Tesla unveiled a prototype of an all-electric battery-powered Class 8 semi back in November 2017. The company expects production of the vehicle next year.
Meanwhile, Toyota revealed a testing model for a hydrogen fuel cell-powered semi-trailer truck a few weeks ago.
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| The Tesla Semi | Toyota’s Project Portal Hydrogen Fuel Cell Class 8 Truck |
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Both Tesla’s battery-powered semi and Toyota’s fuel cell truck have comparable driving ranges — between 300 and 500 miles. But that’s just a fraction of the range of a traditional diesel-powered semi-trailer truck with full tanks.
With dual 150-gallon tanks and an average of 7 MPG, a diesel semi-trailer truck has a nonstop range of more than 2,000 miles.
Nevertheless, we should expect the driving ranges of Tesla’s and Toyota’s semi-trailer trucks to increase over time, as both companies continue developments in their zero-emission projects.
But Toyota is a step behind Tesla in the zero-emission truck department. And that’s due to the technology.
Hydrogen fuel cell technology is not as far developed as the tech inside Elon Musk’s battery-powered cars. That means costs of hydrogen fuel cell vehicles are still very high.
To date, less than 7,000 hydrogen fuel cell vehicles have been sold globally
Toyota hopes to turn this around with continued development and lowered costs. The company has been producing a hydrogen fuel cell passenger car called the Mirai for retail. But both production and sale have remained very low. To date, Toyota has only sold about 3,000 Mirais.
The company expects, however, to be in full-scale commercial production with its fuel cell passenger cars and heavy-duty trucks by 2025.
Drawn in by the sheer size of the opportunity, smaller vehicle manufacturers are also dipping their toes in the zero-emission trucking waters.
Hydrogen-powered semi truck startup Nikola Motor Company (private) is developing electric vehicles and hydrogen fuel cell trucks for the commercial market.
The company has secured hundreds of millions of dollars in financing and already has a deal with Anheuser-Busch InBev (NYSE: BUD) to deliver up to 800 zero-emission big rigs beginning in 2020.
Nikola says its trucks have a range up to 1,200 miles. That’s more than both Tesla’s and Toyota’s trucks, but still far below the range of a traditional semi with full tanks.
Still, all of these companies remain ahead of the curve in regards to zero-emission vehicle production. And heavy-duty transport remains mostly overlooked by investors in the EV market.
When we think of automakers, we first tend to think of passenger cars. And that’s expected. For most of us, that’s what we’re used to using every day.
But as we’ve already talked about, trucking is a huge part of the transportation industry. And as low-emission regulations expand all over the world, companies with developed zero-emission trucking solutions will be default leaders in the industry.
Until next time,
Luke Burgess
As an editor at Energy and Capital, Luke’s analysis and market research reach hundreds of thousands of investors every day. Luke is also a contributing editor of Angel Publishing’s Bull and Bust Report newsletter. There, he helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets. For more on Luke, go to his editor’s page.
