Electrification in the heavy-duty truck segment is moving into a more competitive phase as operating economics shift and Chinese manufacturers prepare to broaden their global footprint, according to Fredrik Allard, a former executive at Scania who now sits on the board of Windrose Technology.
Allard told industry observers that battery-electric trucks are getting closer to achieving cost parity with diesel in a number of specific use cases, especially when government subsidies are in place. He pointed to two core drivers behind the improving economics: lower maintenance requirements for electric drivetrains and greater energy efficiency compared with diesel powertrains.
However, Allard emphasized that the lower operating expense profile for electric trucks is conditional on two variables: the availability of charging infrastructure and the continuity of subsidy programs. According to his remarks, fleets face constraints from a slower-than-expected rollout of charging stations and from instability in government incentive schemes. He added that parity is aided by high annual mileage and charging costs below 0.30/kWh.
Analysts at Bernstein described Allards view as "notably more bullish on electrification than most investors," reflecting a belief that battery-electric trucks could ultimately deliver superior economics to diesel models because they have fewer moving parts and use energy more efficiently.
Competition from Chinese manufacturers is expected to intensify as firms respond to domestic overcapacity. Installed production capacity in China is estimated at roughly 900,000 to 1 million trucks per year, while the current domestic market is closer to 600,000 units. That gap has created pricing pressure at home and is prompting producers to seek growth abroad.
Allard said that Chinese companies typically target Latin America and Africa ahead of Europe, and that many are already manufacturing second- or third-generation electric trucks, reflecting an earlier shift toward electrification in their domestic market.
Bernstein analysts warned that this pattern will probably increase competitive pressure over the coming decade. Established manufacturers may use the transition to electric technologies to solidify international positions, while new entrants will exploit shifting technology cycles to gain market share.
The move to electric powertrains has implications for aftersales revenue. Discussion participants noted that service revenue for traditional truckmakers could decline over time because electric trucks require fewer spare parts and less maintenance, particularly in the powertrain. In the current assessment, the powertrain accounts for about half of the maintenance needs of diesel vehicles.
Despite the reduction in routine maintenance, Allard stressed that reliability and uptime remain vital commercial considerations. He highlighted that Chinese manufacturers could encounter difficulties without established service networks, though some have begun striking agreements with independent workshops and assembling semi-knocked-down kits locally to address that gap.
Allard also argued that purpose-built electric trucks are likely to have an edge over models adapted from diesel platforms, because they can be optimized for battery placement, weight distribution and aerodynamics. He described Teslas Semi as "a very competitive product" that is already in production, while questioning how soon it will reach European markets. He noted that the Semi is focused on long-haul operations, which represent only a portion of the overall truck market.
On the investment front, Bernstein analysts suggested that industry spending may have peaked after several years of simultaneous investment in diesel and electric technologies. They expect further declines in diesel-related investment and foresee an increase in partnerships as companies seek to share costs. Windrose itself, Allard noted, already sells its battery-electric powertrain chassis to other vehicle manufacturers.
Allard summed up the determinants of electrifications trajectory as infrastructure development, policy stability and manufacturers ability to deliver vehicles that are competitively priced in segments historically dominated by diesel. The transition, he said, remains uneven across geographies and use cases, but is accelerating as economic conditions increasingly favor battery-electric technology in targeted applications.
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