Is electrification already pushing European truck OEMs to change their business model?

Last Thursday was ‘truck decarbonisation day’ at the Road Transport Expo, and very interesting it was too. I could write about any number of topics that came up, but I’ll start by joining a few dots to point to what’s shaping up to be a significant change in the business models for truck manufacturers.

Like many in the audience, I was particularly struck by a comment from Harry Campey, of hauliers Campey’s of Selby. This small family firm is showing real leadership as an early adopter of electric trucks, and in his presentation Harry included the interesting detail that they had decided to risk taking their DAF electric truck without an R&M contract. Based on his own experience of driving a Tesla, Harry had concluded that EVs just wouldn’t need enough maintenance to make it worthwhile.

It’s an open secret in the automotive world that manufacturers don’t make great margins on the cars, or trucks, they sell. The majority of overall profits are actually made by the finance companies that loan you the money to buy, and the sale of parts and maintenance after the fact – with this latter being especially true for commercial vehicles. It’s early days to know for sure if electric trucks will need less maintenance, but based on the experience with cars few would bet against it.

What might fill the profits gap left by lower maintenance? Well, in the last few weeks Ford and GM have both struck deals with Tesla in the US to allow their customers to use the Tesla Supercharger network, making Tesla’s decision to invest in charging as well as cars look remarkably prescient. And late last year, four of the big European truck brands joined forces in the Mileance partnership, which is setting out to build the truck equivalent of the Supercharger network in Europe.

This could be the beginning of a pretty fundamental shift in the automotive world. Imagine if Henry Ford had also set out to own the distribution of petrol – that’s the model we may see for trucks, and possibly cars too if Tesla achieves the same success in Europe.

Shell and BP are certainly investing heavily in car charging networks, and with such a huge market they are unlikely to be edged out. Truck charging is still at an early stage though – will the vehicle manufacturers seek to make the sale of energy to power those trucks the revenue stream to replace maintenance? In January this year BP announced it was investing in six charging stations along a 600km stretch of the Rhine-Alpine corridor across Germany, so the oil companies won’t go down without a fight.

If the business model does shift, there’s also the question of where that leaves the dealer networks. One possibility is that electric trucks will be run for longer than diesel equivalents, with regular refurbishments to the cab, or drivetrain upgrades, throughout that longer life, which could be a lifeline for dealers.

There are certainly interesting times ahead…

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