Navigating Electric Truck Residual Value: Insights from ChargePoint VP
The regulation-driven purchase of commercial electric trucks carries a lot of unknowns, with one of the most significant being their residual value. Rich Mohr, senior vice president of North America ChargePoint, highlighted the challenges faced by fleets adopting electric vehicles, particularly in terms of the anticipated life and residual value of these vehicles. The uncertain resale value of electric trucks has been a major concern for fleet operators.
Early adopters of electric vehicles have faced financial difficulties when looking to trade in their cars, and a similar situation could arise for early adopters of Class 4-8 electric trucks. The situation is slightly more favorable for Class 1-3 trucks due to a larger secondary customer base. However, the overall uncertainty surrounding the residual value of these vehicles remains a pressing issue.
Mohr emphasized that the cost of producing electric vehicles in their first two generations is typically the highest. As commercial OEMs continue to produce electric trucks, they are still in the early phases of production, with the second generation just beginning. This uncertainty in production cycles further complicates the determination of residual values for these vehicles.
The evolving market for used electric vehicles, as seen in platforms like Carvana, CarMax, and dealer lots, is gradually shedding light on potential residual values for electric trucks. As more used EVs enter the market, it becomes easier to establish residual values based on consumer willingness to pay.
Challenges remain in accurately setting meaningful residuals for electric trucks, with longer purchase cycles for trucks suggesting that concrete market data may be three to four years away. Mohr expressed uncertainty about the future of residual values for electric trucks, emphasizing that many variables could impact the actual worth of these vehicles in the future.
The higher costs associated with using electric trucks have been a cause for concern, with recent studies from companies like Ryder System Inc. shedding light on the projected costs of converting to electric vehicles. An upcoming study from Ryder will delve deeper into the economic impacts of transitioning to commercial electric vehicles, providing insights into the real-world costs involved.
On the topic of charging infrastructure, Mohr discussed the trend of commercial truck operators charging their vehicles at home and seeking reimbursement for electricity costs. ChargePoint aims to simplify this process by integrating with existing fleet software and systems, allowing seamless reimbursement for both home and on-route charging.
Despite concerns about the reliability of public charging stations, Mohr highlighted the investments being made by companies like ChargePoint and its competitors to improve the charging network for commercial vehicles. He noted that while uptime reliability for public charging stations may not match ChargePoint’s direct control chargers, improvements are being made to enhance the overall network reliability.
In Arizona, plans for a hydrogen hub by Fortescue Future Industries are facing potential downsizing due to regulatory changes that could significantly increase costs. The project, formerly known as Nikola’s hydrogen hub, aims to produce green hydrogen using electrolyzers but may need to scale down in response to shifting regulatory environments.
The electric truck market is experiencing both challenges and opportunities as the industry navigates uncertainties around residual values, charging infrastructure, and regulatory changes. The evolving landscape of electric vehicles poses unique challenges for fleet operators and OEMs, requiring a proactive approach to address these unknowns and ensure a sustainable future for commercial electric trucks.
The purchase of commercial electric trucks driven by regulations presents many uncertainties, with one major concern being their residual value and trade-in worth. Rich Mohr, from North America ChargePoint, explains that similar uncertainties existed with the early adoption of electric vehicles as well. However, as more used EVs enter the market, the setting of residuals becomes more predictable based on consumer demand. The challenge with early adoption of electric trucks is ensuring their cost-effectiveness over time, including maintenance and fuel costs. Establishing meaningful residual values for these trucks may take a few more years as the market matures.
Here are some news articles related to electric trucks:
1. “Unraveling the Mystery of Electric Trucks’ Residual Values” – This article discusses the factors affecting the residual values of electric trucks.
2. “Electric Truck Residual Values: What’s the Mystery?” – Another article on the same topic, exploring the challenges of predicting residual values for electric trucks.
3. “Understanding the Residual Values of Medium Duty Electric Trucks” – This article focuses on the residual values of medium duty electric trucks.