Commercial Vehicle Market Dynamics Evolve Over Time to Include Electrification, Yet Diesel Remains Dominant, IHS Markit Says
Commercial vehicles will continue to run on diesel fuel for the
foreseeable future, according to new research from business information
provider IHS Markit (Nasdaq: INFO). Sixty-six percent of new medium and
heavy commercial vehicles sold in the U.S. will be fueled by diesel
(diesel and diesel hybrid) in 2040, compared to nearly 80 percent today,
per findings released today from the IHS Markit multiclient study, Reinventing
the Truck. The study was completed between January and July of
2018 and includes research from the automotive, economics and country
risk, energy and chemicals teams at IHS Markit.
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Medium/Heavy Sales by Fuel Type, through 2040 (Source: IHS Markit)
Diesel is expected to remain the dominant fuel type globally through
2040 due to increases in fuel economy which will play a major role in
keeping diesel competitive versus alternative powertrains, the study
says. Range and load capacity requirements from long-haul, on-highway
trucking will keep diesel relevant in the short- and long-term, while
other propulsion types will grow in popularity as technology continues
to advance.
“Understanding the future course of commercial trucking is so important
because its impacts will reverberate far beyond just the trucking
industry and through a whole host of industries,” said Daniel Evans,
vice president of the IHS Markit downstream practice and co-author of
the study. “Trucking accounts for half of diesel demand globally, or
one-sixth of oil demand, making the future of trucking critically
important for the oil industry. A wholistic, system-wide view is needed
to see the full picture of this new reality of transportation.”
While diesel does remain dominant, the report and forecast indicate a 15
percent compound annual growth rate (CAGR) for battery electric vehicles
in the U.S. during the timeframe, as adoption rates increase in
medium-duty trucks. This growth is driven from an increase in urban
trucking ton-km and advancements in battery technology allowing for more
mainstream adoption – particularly among class 4 and 5 trucks with
lighter payloads.
The study also highlights a view on total cost of ownership (TCO), with
modeling suggesting BEV struggles in competitiveness compared to diesel
and natural gas (CNG and LNG). Additionally, the weight requirements of
the battery pack cause limitations on the hauling capacity of the truck.
Currently, to achieve equivalent range compared to a diesel class-8
truck the subsequent battery pack weight required would result in a
large cargo capacity penalty.
Due to the initial cost disadvantage of these alternative powertrains,
larger truck fleets will be the first to adopt alternative powertrain
technologies. Smaller fleets and owner-operators encompass a large share
of the market, leading to the slower adoption curve seen in the study.
Also, larger fleets will have the capacity to implement a diversified
fleet in a more strategic manner, allowing for alternative propulsion
options to be implemented in areas that maximize their fuel saving
benefits and minimize the range and payload penalty.
“The regulatory environment will have a large impact on the pace of
change in the industry between now and 2040,” said Matt Trentacosta,
automotive advisory consultant for IHS Markit and a co-author of the
study. “A diesel ban within city centers has the potential to cause
fleet owners to adjust their strategy alongside OEMs and suppliers,” he
said. “In addition, trucking impacts energy consumption and any dramatic
change could elicit a major disruption in the energy markets.”
In the study, IHS Markit also considers a future with a more stringent
regulatory environment in its “Autonomy” scenario, which takes a more
aggressive approach from regulators to shift away from fossil fuels. The
impact from regulations banning diesel options inside of city centers
creates a scenario with a much more rapid adoption of BEV, hybrid and
fuel cell trucks. European markets will experience faster adoption of
alternatives in this scenario.
Overall sales of medium and heavy-duty trucks in China begin to taper to
2040 in both scenarios as the industry becomes more organized and
mature. Adoption rates of Alternative powertrains start a bit slower
than the rest of the RTT regions (Japan, US, and EU), but grow quickly
as the technology is proven.
Matt Trentacosta will discuss findings from Reinventing the Truck
during the upcoming IAA Commercial Vehicles show in Hannover, Germany.
IHS Markit automotive experts will be available to discuss further
details from the report during the conference.
About Reinventing the Truck
Reinventing the Truck is a major multi-client research initiative
that provides a first-of-its-kind, system-wide analysis of the new
reality of transportation and the potential implications for the oil,
gas, automotive, electric power and chemical industries.
Chaired by Daniel Evans, Reinventing the Truck combines the
industry-leading expertise from the chemical, automotive and energy
teams within IHS Markit. The project uses the organization’s long track
record of scenarios development to envision content-rich scenarios that
encapsulate possible futures for cars and energy, combined with
comprehensive analytics and datasets based on the modeling expertise of
IHS Markit.
Reinventing the Truck focuses on the world’s largest trucking
markets—the United States, Europe and China, as well as Japan—with
projections out to the year 2040. Forthcoming research will assess the
specific impacts, investment implications and strategic choices for the
automotive, oil, gas, electric power and chemical industries.
The findings provided in this news release represent the findings of the
project’s baseline scenario, “Rivalry”.
Reinventing the Truck also includes an accelerated
scenario, “Autonomy,” which examines an increased pace of change
exceeding the baseline findings.
For more product information about the study, please contact Kate Hardin
(Energy), Kate.Hardin@ihsmarkit.com;
Matthew Trentacosta (Automotive), matt.trentacosta@ihsmarkit.com;
Anthony Palmer (Chemicals), Anthony.Palmer@ihsmarkit.com
For media inquiries, please contact Jeff Marn (Energy), Jeff.Marn@ihsmarkit.com;
Michelle Culver (Automotive), Michelle.Culver@ihsmarkit.com;
or Melissa Manning (Chemicals), Melissa.Manning@ihsmarkit.com
About IHS Markit (www.ihsmarkit.com)
IHS Markit (Nasdaq: INFO) is a world leader in critical information,
analytics and solutions for the major industries and markets that drive
economies worldwide. The company delivers next-generation information,
analytics and solutions to customers in business, finance and
government, improving their operational efficiency and providing deep
insights that lead to well-informed, confident decisions. IHS Markit has
more than 50,000 business and government customers, including 80 percent
of the Fortune Global 500 and the world’s leading financial
institutions. Headquartered in London, IHS Markit is committed to
sustainable, profitable growth.
IHS Markit is a registered trademark of IHS Markit Ltd and/or its
affiliates. All other company and product names may be trademarks of
their respective owners © 2018 IHS Markit Ltd. All rights reserved.
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