How can the MHDT industry prepare?
The expected disruptions are significant enough that European players in the trucking industry must start preparing now. Suppliers and OEMs must modernize their business models and redesign their workforces to build the capabilities needed for zero-emission trucks. Infrastructure players should start building and scaling up a coordinated truck charging system, and utilities should prepare to build a renewable energy grid to support that system.
Regardless of the pace of change, some players in the MHDT industry will need to make large-scale changes to their product portfolios and operations. Other companies will have to scale the physical infrastructure and electrical power grid they need to support clean energy vehicles.
Suppliers must radically change their business models. The shift from manufacturing ICE components and related parts to manufacturing battery cells, electric motors, power electronics, and related parts will require distinct new capabilities. Not all existing suppliers will be able to manage the transformation, creating opportunities for new competitors. Suppliers must define their path into the ZEV space and start thinking about how to end their business in ICE.
OEMs will bear the brunt of the disruptive shift to ZEVs. Along with suppliers, OEMs will face the biggest disruptions to their business model. As a result, they have to make similarly radical changes. OEMs may also have to face new competition from foreign ZEV truck makers. To reorient themselves, OEMs must create a ZEV ecosystem beyond their current relationships. They need to establish strategic partnerships with partners such as technology providers, charging station infrastructure operators, utility companies, as well as other original equipment manufacturers.
The changes OEMs must make require a massive workforce shift to equip workers with the skills they need to produce and sell ZEVs and support other new offerings. Training alone will not fully meet the demand. Companies must modernize their hiring practices and talent pipeline to identify, hire and retain people with relevant capabilities and experience.
Infrastructure players must build and scale a charging network. If the T&E scenario is implemented, Europe will need 185,000 charging stations for MHDTs by 2035. Infrastructure players must start rolling out a coordinated system of public and private charging stations linked to major European transport routes. Ensuring truck drivers can recharge wherever and whenever they need to will involve overcoming a number of implementation hurdles, including a lack of access to the existing electrical grid and other infrastructure.
Utilities must accelerate the development of renewable energy capabilities. Electricity is to charging stations what diesel is to traditional truck stations. Utilities must build their generating capacity with enough renewable electricity to power future ZEV fleets. The estimated 1.8 million ZEV trucks on the road in 2035 under our high adoption scenario will require 160 TWh of electricity — a massive increase from the 1 TWh of electricity used by the commercial trucking industry in 2022. Act quickly to expand the power grid Current, using electricity produced primarily through wind or other renewable energy, and distributing it to charging stations at truck stops and other locations.
The entry of non-European players into the market will negatively impact European OEMs and suppliers. Although the switch to ZEV will increase the number of jobs and GDP of the European MHDT industry overall, the entry of non-European competitors into the market will reduce this effect. The loss of domestic jobs and GDP will be particularly severe if foreign competitors manufacture vehicles or key components elsewhere and import them into Europe. Conversely, a full localization model would be more beneficial to the region. Policymakers can influence the influence of non-European competitors by introducing protective measures such as import tariffs or local content requirements, subsidies for domestic production, and regulations to ensure supply keeps up with demand.
The transition to ZEVs is fast approaching. Getting enough ZEV trucks on the road in time to meet regulatory requirements requires working across the value chain — from securing raw materials for the batteries that will power the electric trucks to generating enough electricity to keep them moving. All players in the industry have a vested interest in making the transition as smooth as possible. They can contribute to this effort by establishing closer connections with existing partners and working with new providers. These shifts will create uncertainty, but will also make the industry more robust and self-reliant, and ultimately create more value.
