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News18 » Auto
4-min read

Daimler Unveils All-Electric Heavy-Duty Truck, To Rival Tesla Semi

Truck buyers anticipate global regulation to curb pollution from trucks and see advantages from lower fuel and maintenance costs of electric vehicles.


Updated:June 7, 2018, 10:59 AM IST
Daimler Unveils All-Electric Heavy-Duty Truck, To Rival Tesla Semi
Martin Baum, Head of Daimler Trucks and the Daimler Buses Divisions speaks at an investors event at Portland International Raceway in Portland, Oregon, U.S. (Image: Reuters)

Daimler AG unveiled on Wednesday an all-electric big rig truck it promises to have in production in 2021, as the German automaker mounts a major challenge to European and American rivals, including new entrants like Tesla Inc. Truck buyers anticipate global regulation to curb pollution from trucks and see advantages from lower fuel and maintenance costs of electric vehicles, but a fleet technology switch is far from certain given challenges of cost, charging infrastructure, range, and the potential for heavy batteries to constrict payloads.

Daimler's Freightliner eCascadia is an 18-wheeler with a 250-mile (400 km) range, aimed for regional distribution and port services, while Tesla has said that its Semi - which it expects to build by 2020 - will be suited to longer-distance runs with a 500-mile range.

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Daimler on Wednesday also unveiled a medium-duty Freightliner eM2 106, with a range of up to 230 miles, designed for local distribution, such as beverage delivery, which some analysts see as the "sweet spot" of the emerging electric truck market. Daimler said it will deliver a total of 30 prototypes on the two models to customers later this year for field-testing and expects to have the trucks in production in 2021.

Daimler, as the world's largest truck maker, has much to lose as competition for electrified trucks intensifies. The company's Illinois-based rival, Navistar International Corp, and its partner Volkswagen AG, which is spending $1.7 billion on electric drives, autonomous vehicles and cloud-based systems by 2022, aim to launch their own medium-duty truck in North America by late 2019.

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Daimler, with a $66.4 billion market capitalization and best-known for its luxury Mercedes-Benz brand, has a 40 percent share of the roughly $39 billion North American heavy-duty truck market. Local delivery "makes an enormous amount of sense because it doesn't have the long-range requirements, yet puts on enough miles on a daily basis where you can get fuel savings," said Tim Denoyer, a senior analyst at consultancy ACT Research.


Success for the larger class 8 trucks would hinge on lowering battery costs: "While electric truck sales will be fairly significant in coming years, I don't think it will displace diesel anytime soon especially in highway, long-haul trucking where obviously battery capacity and range anxiety present itself," Denoyer said. The company will use batteries from German firm Akasol, a spokesman for Daimler told Reuters. No final sourcing decisions on batteries have been made, however, he said.

Akasol buys lithium cells and adapts them to battery systems used by bus makers Daimler and Volvo among others as well as in industrial vehicles, locomotives and ships. Reuters reported earlier this week, citing sources, that Akasol is preparing for a Frankfurt stock market listing before the summer break. Daimler Trucks North America Chief Executive Officer Roger Nielsen said the truck's payload had been curbed by the size of batteries.

"Overall, this is an ideal application for customers whose routes have a distinct radius and whose operating model provides time for battery recharge," he said.

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A heavy-duty commercial truck runs up to 100,000 miles a year, and Tesla has promised a 20-percent saving on current per-mile operating costs, to some skepticism.

Tesla also has more than 450 reservations for its truck and expects to have a head start, although its plans are still developing and the roll-out of its Model 3 sedan has been plagued by production problems. CEO Elon Musk plans to start production in 2020 but there is no Tesla truck factory yet.

Martin Daum, head of Daimler's trucks and buses divisions, took a jab at Tesla when asked during an interview with Reuters whether Daimler would start accepting truck reservations with cash down payments, as Tesla does to raise funds.

"We don't need the down payments to finance our investments," Daum said after flashing a smile. "We give (customers) prototypes. We don't charge for that. It's gaining knowledge on their side, as well as on our side. Then we sell the trucks and then we deliver the trucks. We don't need any pre-orders."

Daimler also announced a new research and development center for autonomous driving in Portland, which will work with existing facilities in Stuttgart, Germany, and Bangalore, India on getting self-driving freight trucks on the road.

Stuttgart-based Daimler will invest more than 2.5 billion euros ($2.9 billion) in R&D at its truck operations by 2019, with more than 500 million euros earmarked for electric heavy-duty commercial vehicles, connectivity and self-driving technology.

Daimler Trucks expects a strong second half of the year but second-quarter business remains challenging, finance chief Jochen Goetz said, citing problems in the supply chain. He also said the truckmaker would focus on executing its previous savings plan and aim to lower costs by 1.4 billion euros as planned by 2019.

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| Edited by: Ayushmann Chawla
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