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California’s Electric-Truck Drive Draws Startups Building Charging Networks

California, which depends on trucks to move billions of dollars worth of consumer goods, manufacturing parts and agricultural products each year, aims to replace more than 30,000 heavily-polluting trucks with clean-energy vehicles by 2035. (Infraprime Logistics Technologies (IPLTech))
California, which depends on trucks to move billions of dollars worth of consumer goods, manufacturing parts and agricultural products each year, aims to replace more than 30,000 heavily-polluting trucks with clean-energy vehicles by 2035. (Infraprime Logistics Technologies (IPLTech))

Summary

  • An aggressive emissions-slashing mandate means thousands of charging sites are needed in the coming years

Electric vehicle-charging startups are racing to cash in on California’s drive to electrify truck fleets in the state.

A clutch of companies are spending hundreds of millions of dollars to lease or buy land, install charging infrastructure and in some cases even order dozens of heavy-duty electric trucks to jump-start the nascent industry.

The competition is heating up because of recent California regulations that force some trucking companies and owner-operators to begin buying electric vehicles starting Jan. 1, 2024.

California, which depends on trucks to move billions of dollars worth of consumer goods, manufacturing parts and agricultural products each year, aims to replace more than 30,000 heavily-polluting trucks with clean-energy vehicles by 2035.

The state’s rules targeting truck emissions are the toughest in the country calling for electric fleets, and they mean California will need thousands of charging stations to support the vehicles. Experts say such sites will have to be clustered close to the state’s big ports and warehousing hubs, critical connections for the U.S. economy, as well as spread across the state to deliver energy to power-hungry tractors.

First the state must solve the chicken-and-egg problems that plague emerging technologies. Charging providers won’t install infrastructure if they don’t have a large enough pool of potential customers. Truckers, meanwhile, say they won’t buy electric vehicles if there is nowhere to charge.

“It is a huge amount of infrastructure required," said Neha Palmer, co-founder and chief executive of startup TeraWatt Infrastructure.Palmer compared the build-out of charging networks to the expansion in past centuries of the railroads and the federal highway system.

The company has raised $1 billion in backing, which she said “will go in a heartbeat" as the business expands across the country.

Concerns over charging are a major roadblock to accelerating demand for electric vehicles in general, and questions over whichbusinesses will run charging stations remain unsettled.

The questions are particularly pressing for commercial trucking, with fleet operators saying the downtime needed to recharge vehicle batteries along with limitations on the range of electric heavy-duty trucks raise big economic hurdles.

California has passed a series of rules to stimulate demand. The rules include a requirement that electric trucks make up an increasing percentage of the state’s heavy-duty truck sales and fleets as well as a ban on diesel trucks over a certain age or mileage from calling at the state’s ports and rail yards.

The rules, combined with state and federal green-energy grants, are fueling startups offering trucking companies bundled packages that include the electric trucks, charging, parking and perks such as vehicle maintenance and cleaning.

“You are seeing new business models that are just directly a result of the regulation and the grants," said Julian Counihan, general partner at San Francisco-based Schematic Ventures.

Paul Gioupis, founder and CEO of startup Zeem Solutions, based in Inglewood, Calif., said his company’s bundle includes charging, maintenance and parking for about $7,500 a month. The goal is to get the monthly running costs for electric trucks as close as possible to those that run on diesel. “That’s what everybody has been running for," Gioupis said.

Heavy-duty trucks are among the most challenging electric vehicles to operate. The trucks cost about three times as much as diesel vehicles. Most battery-powered tractors today have a range of less than 250 miles. The trucks require more charging power than passenger vehicles, but industry executives say there are hardly any publicly accessible charging stations for heavy-duty trucks in California.

John O’Leary, CEO of Daimler Truck North America, said this month that to support California’s electric-truck requirements would require an average 30 DC chargers a day to go online in the state between now and 2026.

But O’Leary said lead times for DC charging depot projects are currently running to more than two years and that “infrastructure build-outs are flailing."

Daimler Truck is working with a unit of Florida-based renewable company NextEra Energy and with BlackRock Alternatives to develop a national network of public charging for commercial electric trucks that will take many years to roll out but that could eventually support long-distance trucking.

For now, companies deploying heavy-duty trucks are focused on local routes shuttling freight between ports or rail ramps and nearby warehouses. The shorter distances allow drivers to work a full shift between charges.

Rudy Diaz, co-owner and CEO of Long Beach, Calif.-based Hight Logistics, is working with Forum Mobility to help electrify the company’s 50-truck fleet. Forum Mobility, an Oakland, Calif.-based startup, bought the electric heavy-duty trucks and installed chargers in Hight’s freight yard near California’s Port of Long Beach for a fixed monthly lease. Forum Mobility covers maintenance too.

Diaz’s company operates four electric trucks today and expects to have 10 of the trucks by the end of the year.

Getting charging power to truck yards and warehouses is expensive, complicated and time-consuming. It includes finding a site with sufficient available power and working with power utilities and government agencies as well as installing, maintaining and upgrading specialized equipment and software.

Some companies, such as California-based warehousing and distribution specialist Performance Team, have developed on-site charging at facilities with industrial property giant Prologis.

Startups such as TeraWatt, Forum Mobility and Long Beach, Calif.-based WattEV are also looking at developing off-site charging where trucks can charge or park overnight.

Matt LeDucq, CEO of Forum Mobility, said his company wants to add sites capable of storing more than 100 electric trucks close to ports at Oakland, Los Angeles and Long Beach. The company, which has raised $425 million, will provide customers with a truck that can be picked up fully-charged each morning.

“Right now we are delivering the trucks because we think that is the right thing for the market," LeDucq said. “But the core business is to build the charging infrastructure that we need."

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