Early Read of the Week: Can Heavy Trucks Replicate the Success of New Energy Passenger Vehicles? (AI Translation)

【周刊提前读】重型卡车能复制新能源乘用车的成功吗？

The heavy truck fleet of Youlian Supply Chain Investment Co., Ltd. plans to achieve a 7:3 ratio of new energy to traditional energy models this year, following successful evaluations of new energy heavy-duty trucks over the past two years.[para. 1] The company provides transportation for major clients such as large aluminum companies, which are pushing for reduced carbon emissions due to their high energy consumption. Government efforts are promoting green ports and zones, reinforcing the shift to new energy trucks.[para. 2]

Sales of new energy heavy-duty trucks have shown phenomenal growth, from 10,400 units in 2021 to 34,000 units in 2023, with 11,000 sold in the first quarter of 2024 alone. China’s heavy-duty trucks, which constitute 4% of the national fleet, are massive pollution contributors, making their transition to new energy trucks a priority for the country’s carbon reduction goals.[para. 3] Current sales primarily feature electric heavy-duty trucks, with charging and battery swapping as the main energy replenishment methods.[para. 4]

Since 2021, numerous policies have been rolled out to expedite the electrification of heavy-duty trucks, promoting battery swapping and laying out a pilot for new energy vehicle applications in various cities. This is in response to stricter carbon emission standards introduced by key service sectors such as the aluminum industry.[para. 5]

Several companies have entered the new energy heavy-duty truck market, including industry leaders like Sany Group, XCMG Group, Yutong Bus, and traditional heavy truck manufacturers such as FAW Jiefang and Dongfeng Commercial Vehicles. The market saw a spike in battery-swapping truck models from eight in 2020 to 156 in 2021, with about 3,000 units sold.[para. 6] Though the Chinese heavy truck market hit a peak of 1.623 million units in 2020, sales have since dropped. However, the market penetration rate of new energy heavy trucks rose from less than 1% in 2021 to over 8% by early 2024.[para. 7]

The capital market for new energy heavy trucks is buzzing, spurred by investments like Qiyuan Xindongli’s 1.5 billion yuan Series B financing and Proton Motors’ 380 million yuan Series A round.[para. 8] Pure electric heavy-duty trucks have begun to show economic viability, often boasting a 5% to 10% cost advantage over diesel trucks.[para. 9] Hydrogen-powered trucks, however, are still in early stages due to high costs, though continuously supported by policies like toll waivers for hydrogen vehicles in regions like Shandong and Chengdu.[para. 10]

Battery swapping is gaining traction for its efficiency in high-load scenarios, despite being more expensive than charging. For new energy heavy trucks, lifecycle energy consumption and operational data collection are crucial for maximizing efficiency and cost-effectiveness.[para. 11]

Closed-loop scenarios like ports and mining sites are the initial testing grounds for battery-swapping heavy trucks due to the manageable distance, typically less than 200 kilometers. However, the future focus is on creating a national battery-swapping network for long-haul transportation.[para. 12] Local governments like those in Tangshan are leading this transition by promoting electric, hydrogen, and methanol heavy-duty trucks, aligning with their specific industrial conditions and clean energy resources.[para. 13]

Even though the market for new energy heavy-duty trucks is still evolving, experts believe that a combination of new energy and autonomous driving will eventually offer the most economical solution for highway transportation. While autonomous driving technology is predominantly confined to closed environments currently, its extension to main lines remains a future goal.[para. 14]

In summary, the shift to new energy heavy-duty trucks in China is driven by increasing carbon emission regulations, booming market growth, substantial capital investments, and significant advancements in battery swapping and hydrogen technology.[para. 15]