The cost of building a battery-powered truck will “forever be higher” than an internal combustion engine equivalent, the boss of the world’s largest truckmaker has warned, as the war in Ukraine accelerates an already rapid rise in the prices of essential goods.
“If you take the engine, transmission, axle, tank system, cooling as a whole . . . “, said the CEO of Daimler Truck, Martin Daum, the Financial Times, “we have a maximum of about 25,000 euros [of material in a combustion engine truck].”
“How much battery do you get for 25,000 euros? Even if [battery costs fall to] €60 per kilowatt hour and I need 400 kilowatt hours, then I need €24,000 for the battery cells alone [in a single truck]“.
He added that it is up to governments to make up the difference using whatever mechanism they choose. “Without subsidies. . . the price for one [electric] Truck will always be higher than a [combustion engine] TRUCK.”
Daum’s comments come after Daimler Truck, which was an early entrant into the electric market and has been making battery-powered vehicles since 2017, reported that it more than tripled sales of zero-emission trucks and buses last year to a total of 712.
However, that is only a fraction of the 455,000 trucks and buses that the company delivered in total in 2021.
Its long-distance eActros model, which went into production last year, still costs three times its combustion equivalent, and this gap is unlikely to narrow significantly in the near future.
The cost of the key raw materials used in modern batteries has risen sharply over the past year, with cobalt and lithium prices more than doubling and nickel prices up nearly 40 percent, according to IHS Markit.
As a result, battery pack prices, which have fallen to an average of $132 per kilowatt-hour in 2021, according to a survey conducted by BloombergNEF, are expected to remain above the $100 mark through at least 2024.
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Daum, who has joined other industry bosses in calling for a carbon tax to narrow the cost differential between internal combustion engine trucks and battery-powered models, said he nonetheless supports the federal government’s efforts to help companies deal with rising diesel costs.
“We have to increase the price over time,” said the board, “we can live with two or three euros per liter, but we can’t live if it happens overnight.”
Daimler Truck, whose longstanding strategy has been to pursue both battery-powered and hydrogen-powered trucks, may focus more on the latter if battery costs continue to rise and raw materials remain scarce, Daum added.
“In the fuel cell, we have far fewer rare raw materials,” he said, “and we’re not competing with millions of cars for the same material.”
Daum praised Federal Economics Minister Robert Habeck for signing an agreement with Qatar last week to supply hydrogen and liquid natural gas.
But he criticized antitrust authorities in Brussels for their delays in approving a joint venture between Daimler and its main competitors Volvo and Traton, which will spend 500 million euros to set up a network of 1,700 truck charging points in Europe.
“We’re willing to invest the money,” he said, “we have someone willing to take on the CEO role and she can’t do it because we don’t have the approval.
“That should have happened three months ago. We should have been operationally ready.”