Obama touts electric delivery truck, but still a long haul to market?

President Obama on Thursday toured a Missouri factory that makes electric delivery trucks, dismissing criticism of his program to provide federal funding to promote electric vehicles.

By , Staff writer

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    President Obama tours the Smith Electric Vehicles facility in Kansas City, Mo., on Thursday.
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President Obama visited one of America's first makers of electric delivery trucks Thursday, touting the job-creating advantages of reshaping the US automotive fleet with an emphasis on running not just cars, but trucks, on batteries.

Entering a hangar-like building at Smith Electric Vehicles in Kansas City, Mo., Mr. Obama was shown a rack of lime-green batteries the company now installs into delivery trucks, converting them from diesel to electric power.

A nearby Frito Lay truck had "Good fun – powered by electricity" plastered across its exterior. The private company, which received a $32 million Department of Energy grant in March, is the US offshoot of a British parent that does the same thing.

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"They ought to tell the workers of Smith Electric that we’d be better off if your jobs didn’t exist," the president said, taking issue with critics who oppose his program to provide government funding to promote electric vehicles. "They ought to travel across America and meet the people I’ve met at places like Navistar in Indiana, where folks are being hired to build new electric trucks."

Highlighting jobs created by new electric truck makers might sound like a risky move for a president eager to show his policies – including federal grants – are making a difference in the economy. Who ever heard of an electric delivery truck anyway?

But like the image in a rear-view mirror, nearly silent, plug-in trucks – and the jobs they could create as manufacturing of them increases – may be a lot "closer than they appear," observers say.

Early market studies suggest that as much as 30 percent of urban work trucks could be standard (Toyota Prius-like) gas-electric hybrids by 2020, according to Calstart, a Pasadena-based, clean transportation technology organization that works with about 130 companies nationwide. Another 5 to 10 percent could be plug-in hybrid (electric mainly with small gas engine) or all-electric trucks.

"What we're seeing is confluence of more robust electric technology, steadily decreasing battery costs, and concern about the fuel-price roller coaster," says Bill Van Amburg, senior vice president for Calstart. "That has produced a stronger business case for companies to move toward electrifying their fleets."

Another huge factor boosting the business case for electric trucks is the president's call for new fuel efficiency standards for commercial trucks. There have never been any standards for trucks weighing over 8,000 pounds, Mr. Van Amburg says. But by fall, the Obama administration expects to propose the first new fuel economy and carbon emissions standards for trucks. Those standards would be implemented by 2014.

With fuel prices expected to rise over the long term – and new fuel standards coming in – signs of business interest are popping up. Navistar already has an all-electric delivery truck in early production. Another big truck maker, Freightliner, is making all-electric parcel delivery trucks, too. Calstart's last hybrid truck users forum, which focuses on speeding commercialization of hybrid and plug-in technology into the truck market, had 550 members, including 80 fleets and most major truck makers and systems suppliers.

"No question about it, the commercial fleet market is a giant untapped opportunity for electrified vehicles," says Felix Kramer, co-founder of Calcars, a California-based group that promotes plug-in technology. "We think the future will be retrofitting existing trucks with electric-drive technology."

Because companies with fleets of trucks tend to look at the total cost of lifetime ownership, the case is compelling if a retrofitted truck can shift from 10 to 15 miles per gallon to 20 to 40 all-electric miles. Cost is an issue, though. A traditional FEDEX-style delivery truck might cost about $50,000, and the hybrid version about $95,000, Van Amburg estimates. But a plug-in or all-electric version could cost $100,000 to $130,000.

Fleet buyers can justify a premium of 20 to 30 percent over the base cost of a truck. But incentives are needed for perhaps the next four to five years. A bill pending in Congress would restore some tax incentives that have lapsed, Van Amburg says. Meanwhile, there are indications that battery costs could drop by as much as half over the next five years.

"We think this is just the beginning," Mr. Kramer says. "You don't need lots of batteries for these trucks – and you can make customers and neighbors happy by being quiet and emission-free."

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