Daimler Deals with Booming Market, Preps Electric Trucks

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Deborah Lockridge, Heavy Duty Trucking (HDT)  /  October 29, 2018

Booming truck sales pushed by a strong economy create their own headaches, which Daimler Trucks North America is dealing with even as it pushes forward on electric trucks, advanced safety technologies/automation, connectivity and other projects.

In February, DTNA President and CEO Roger Nielsen told truck journalists that he expected the industry to sell 420,000 Class 8 trucks in North America this year. He’s upped that expectation to “somewhat higher than 440,000,” he said Oct. 28 in a wide-ranging roundtable with truck reporters at the American Trucking Associations’ Management Conference and Exhibition in Austin, Texas.

“Definitely the market is a lot stronger than we ever expected it to be,” he said. “Over 330,000 vehicles were delivered through the end of September. 330,000 is a good year in itself, and we’ve still got three months to go.”

DTNA’s market share has slipped a bit, to 38%, which Nielsen said was largely due from supply chain challenges. “We’ve had a lot of lingering effects from instability in the supply chain that has hounded us all year and continues to be a daily challenge.” Running at “peak volume and capacity,” as he put it, means even small supply chain hiccups can cause big problems. However, “We’ve seen a lot of stabilization over the last two to three months and once again our factories are running at stable rates.”

There’s often speculation that some of the high truck order rate we’re seeing across the industry does not consist of “real” orders, which will evaporate as soon as the economy shows signs of going south. But Nielsen said DTNA has been working hard to keep that from happening, and indications are that other companies are likely doing the same.

Nielsen said Class 8 truck orders passed 52,000 in July, but if truck makers had accepted every order, it likely would have been in six digits. DTNA is working with dealers and customers to reassure them that they will be able to get trucks next year and they don’t have to place orders just to “save spots.”

“We know the industry can turn overnight, and we don’t want to lave people holding the hot potato, with too much inventory in dealer lots or trucks sitting on the fence at our customers,” he said.

When asked whether other truck makers took the same approach, he said, “I would say everybody’s in that reasonable mode. Nobody has an extraordinary amount of vehicles in the backlog, no more than would be expected.”

Electric trucks on the way

Even as it works to manage current demand and production, DTNA is progressing on electric trucks and other high-tech advances it highlighted in June at its Capital Market & Technology Day.

Nielsen said the company is “days away” from delivering the first vehicles of its Freightliner Electric Innovation Fleet. NFI and Penske will test a total of 30 pre-production Freighliner eCascadias and Business Class eM2 106 trucks.

It recently hosted them and other customers at an ‘electric vehicle council’ event, where fleet representatives got a chance to experience the vehicles first hand and offer their feedback for DTNA to use as it develops full production models.

Nielsen said in addition to experiencing the trucks (attendees especially commented on the acceleration and the quiet, based on a video DTNA shared with reporters), the council spent a lot of time talking about charging infrastructure, financial incentives, route planning and use cases.

Last month, Daimler made a large investment in Proterra, which Nielsen said is the largest supplier of electric bus technology in North America. While this initially is most applicable to Daimler’s bus-manufacturing operations, the underlying technology research will no doubt have implications for trucks as well.

DTNA’s electric trucks, which use existing cabs, may not be as futuristic-looking as trucks from startup competitors such as Tesla, Nikola, or Thor, but Nielsen said that’s the way fleets want it, based on comments from the recent electric vehicle council meeting.

“Our customers were really pleased with the fact we were able to take a vehicle they were familiar with, they know how to maintain, they know how drivers enjoy the cascadia, that it was a smooth transition from a diesel powered truck to an electric powered truck,” he explained. “The trucking companies have a difficult time attracting drivers. They’ve had good luck attracting drivers to the new generation of the Cascadia, so I don‘t see them too eager to change that cab interior. Drivers don't like change, good or bad.”

Similarly, he said, many fleets want to be able to buy and sell electric trucks on the same trade cycles they currently have with diesel trucks. “Customers aren’t expecting to change their trade cycle,” he said, because they buy new trucks every few years to take advantage of the latest technology available. “Just like [the trucks and engines designed to meet] diesel exhaust emissions, they should expect an improvement in energy consumption year over year.”

Questions such as trade cycle, residual value, expected battery life, etc., are ones DTNA hopes to be able to answer for customers as they evaluate these new technologies.

“Our customers want answers,” Nielsen said. “They’re getting pressure from different municipalities to come up with zero or near zero emissions vehicles and they want to know what to invest in. Not all experiences in the past have been very positive for them; they’re not going to jump into yet another new experience, so they’re looking this time around for us to get that confidence level up.”

Automated future

Nielsen also noted that Daimler is ramping up the autonomous vehicle research center it announced in June.

“We definitely believe there is a time in the future where Level 4 automation is going to be a positive business case,” he said. However, “we don’t see a case where we’ll be able to get rid of the driver in the trucks,” because “drivers do a lot of other services for customers. But we believe increasing the level of the automation in the vehicle will improve safety for the driver and others on the road.” He teased further automation developments when DTNA introduces the next version of its Detroit Assurance advanced driver assistance platform.

Asked about Daimler Trucks chief Martin Daum’s recent remarks about platooning not providing the type of real-world payback it would need to succeed, Nielsen agreed.

While it has some promise for fuel efficiency, he questioned whether the costs would be worth it – not just the equipment costs, but the costs to the drivers’ lifestyle, drivers’ stress level, and in organizational costs.

“As we talk to customers it is becoming difficult to find an application which would make sense to equip the whole fleet with that kind of technology,” he said.

DTNA will continue to do platooning research, pointing out that the company is learning a lot about safety, and called it “an interim step along the way to different levels of automation.”

“As we get further along with different levels of automated driving, it might get more palatable,” he mused. “You can imagine truck number two doesn’t have a driver behind the wheel; there might be a case like that for platooning.”

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DTNA outlines goal to dominate the electric vehicle market

Jeff Crissey, Commercial Carrier Journal (CCJ)  /  October 29, 2018

Customer interest in electric commercial vehicles is happening quicker than expected, but Roger Nielsen, president and CEO of Daimler Trucks North America, said DTNA will continue its efforts to dominate the electric commercial vehicle space in North America.

“In 2020 we’ll have the highest number of [electric] vehicles on the road in trucking segment,” said Nielsen during a press roundtable at the American Trucking Associations’ 2018 Management Conference & Exhibition in Austin, Texas. “We are trying to get the most experience as quick as we can,” adding that the OEM that can provide a durable, reliable vehicle with batteries that have the right power-to-weight ratio will be the company that finds that finds the best value solutions for its customers.

“It’s no different than diesel power, it’s all about energy consumption,” he said. “The [OEM] that wins the energy consumption race will win the [electric vehicle] race as well.\

Nielsen said Freightliner customers already are looking for answers as to what technology they should invest in as some municipalities across the country signal their intent to limit commercial transportation to near-zero or zero-emissions vehicle solutions.

“In the past they’ve had some alternative powertrain technology options, be it [compressed natural gas] or whatever else they had a choice of investing in, and not all of those experiences have been good for them,” said Nielsen. “But they definitely are not going to jump into another unknown experience and say, ‘Here we go again,’ and have a new set of powertrain problems. This time they are looking to us to get that confidence level up.”

Electric vehicle R&D in progress

DTNA unveiled its Freightliner eM2 medium-duty and eCascadia heavy-duty trucks at an investor event in June, and earlier this month hosted an Electric Vehicle Council meeting with 30 fleets to garner reaction and input directly from its customers.

“Our customers were pleased that we could take a Cascadia vehicle they were familiar with and make a smooth transition from diesel-powered truck to an electric-powered truck,” said Nielsen.

Initial use cases for Freightliner electric vehicles will revolve around port drayage, regional and inter-city applications, but the ultimate goal is a long-haul electric vehicle solution.

“As we develop a vehicle we always take the extreme business use case which is a full 11 hours of driving, spending the night in the truck or get a second shift out of the truck,” said Nielsen. The power-to-weight density of the batteries isn’t yet to that point where we believe a long-haul business case can be made.”

Nielsen said NFI and Penske Truck Leasing next month will take possession of its Electric Innovation Fleet, a customer trial of 30 eCascadia and eM2 power units. DTNA will collect feedback on issues including charging infrastructure, incentives, route planning, servicing and use cases.

Citing the eCascadia’s commonalities with the Mercedes-Benz eActros electric cabover truck in European markets, Nielsen said DTNA will continue to leverage global resources and bring together common solutions. “As we go forward [with electric vehicle development] separated from having to comply with regional diesel exhaust emissions standards, we are able to bring more of those global resources to bear.”

Several weeks after Daimler’s investment in Proterra – the market share leader in the North American electric city bus market – DTNA installed a Proterra city bus power unit into a C2 Thomas Built school bus. “[The Proterra acquisition] helps us advance testing and gives us another chance to explore another technology in the commercial vehicle space.”

In the medium-duty electric vehicle segment, the Freightliner eM2 initially will have two battery-powered powertrains by two different systems integrators.

“The industry exploration is all in our quest to find a battery-connected vehicle solution that provide the best solution and positive use case for our customers,” said Nielsen.

Lifecycle considerations

Nielsen said a switch from diesel to battery-electric vehicles doesn’t mean customers should have to adjust current trade cycle practices.

“They are realizing that just like with diesel exhaust emissions, they should expect an improvement in energy consumption every year,” he said.

Residual value through the vehicle’s life and resale value remain unknowns but are at the top of the list of customer demands.

“Everybody is expecting that we should provide a battery-electric Class 8 truck that has a three- to five-year first owner lifecycle and it has not depreciated to zero when it gets to the second customer,” said Nielsen. “They are looking for similar depreciation values [to diesel powertrains] so they don’t upset the whole business case. At the moment the systems are costlier than a diesel truck, but we believe with the scale worldwide we can bring those costs down faster than anyone else.”