As the transportation industry accelerates toward an electric future, businesses are navigating a complex landscape shaped by new regulations, technological advancements, and shifting market demands. The transition to electric vehicles (EVs) is more than a trend; it’s a fundamental shift in how companies approach transportation, logistics, and sustainability. Yet, the journey to mass adoption of EVs, especially in commercial settings, reveals a path filled with opportunities and challenges.

Despite the enthusiasm surrounding EVs, the transition for commercial use, particularly for heavy-duty vehicles such as trucks and buses, is progressing at a varied pace across different sectors and regions. Factors such as regulatory environments, charging infrastructure availability, and vehicle production rates significantly influence adoption rates.

Research by Proactive Worldwide (PWW) indicates skepticism among truck dealers about the immediate uptake of EVs. Proactive Worldwide interviewed several truck dealers from the largest manufacturers regarding this topic. Major initiatives have been put in place by truck manufacturers, namely Volvo and Ford. Other OEMs have taken steps to enter the market but have not been as committed as Volvo and Ford. Volvo is introducing charging infrastructure nationwide through Mack Trucks’ expansion of its Turnkey Solution program through two new partners, InCharge Energy and Blink Charging. Volvo is also working on upgrades to service facilities and training staff to become Certified Electric Vehicle dealerships. At the same time, Ford recently launched the 30×30 initiative focused on deploying 30,000 EV charging ports in Xcel Energy service territories across the US by 2030. However, these efforts are contrasted against production challenges. Regulations from the Biden administration’s EV Acceleration Challenge require electric vehicles to account for 40-50% of new vehicle sales in 2024. As a result, some dealers are facing challenges to meet this requirement. For example, Hino dealers report that Hino was expected to produce 10,000 vehicles overall in 2024; however, because it does not have an electric vehicle for mass production, it now has to decrease production to only about 4,000 vehicles in total, less than half of the expected quantity.

The type of vehicles in demand also plays a role. According to Navistar dealers, they are seeing increased demand for medium duty vocational electric vehicles rather than heavy duty electric vehicles, as a larger percentage of work trucks, buses, and vans must adhere to zero-emissions regulations sooner than heavy duty vehicles.

The government aims to support the widespread adoption of EVs through various initiatives and incentives. The expansion of charging infrastructure is critical to supporting the adoption of EVs in commercial settings. The U.S. Department of Transportation’s EV Infrastructure Deployment Plan aims to establish a nationwide network of 500,000 electric vehicle chargers by 2030. This expansion is crucial for enabling long-haul electric transportation and reducing range anxiety for commercial operators. Certain states are also implementing state-specific regulations on electrification of vehicles, such as California, which has been spearheading such initiatives. California’s Advanced Clean Trucks (ACT) regulation, for instance, requires truck manufacturers to sell a growing percentage of zero-emission trucks starting in 2024. Several other states have implemented or are considering following suit with similar requirements for OEMs to sell a certain percentage of zero-emission vehicles.

Though efforts are being made at the OEM level, there needs to be more awareness of this and communication from the OEM corporate offices down to dealers for a rapid shift in the purchase and ownership of EVs, not only in terms of production and availability of vehicles but on the financing side as well. According to PACCAR dealers, PACCAR frequently discusses zero emissions vehicles and partnerships for charging capabilities, but the infrastructure and processes being put in place to finance ZEVs remain largely unknown by dealers. PACCAR has yet to announce definitive financing programs as ZEVs have yet to be fully launched in the market. This sentiment is echoed by Volvo dealers, who say it is too early to discuss specifics on electric vehicle financing, as few vehicles have been built yet. 

Further, the adoption of vehicles tends to be limited to certain types of commercial customers. Those who have purchased EVs tend to be large companies or entities, like government municipalities, logistics companies, and major retailers or foodservice companies who are testing the use of EVs for their operations. Large companies (Amazon, PepsiCo, FedEx, etc.) are leading the trial and use of EVs due to their ability to cover the costs of such vehicles. Even in areas where local municipalities use EVs for services like waste removal, it tends to be limited to a trial of a few trucks, not a widespread fleet. 

Other factors playing a role in low adoption are:

• High Costs: The initial investment in electric commercial vehicles and the necessary charging infrastructure remains a significant barrier, particularly for small and medium-sized businesses. Although the total cost of ownership may decrease over time, convincing companies to make the upfront investment is an ongoing challenge.
• Infrastructure Limitations: The current availability of charging stations is limited across the country, especially in rural areas, posing a significant hurdle for logistics companies or other companies that operate over long distances.
• Range Anxiety: Commercial vehicles require a reliable range to complete daily operations. Concerns about the vehicles’ range and charging times can deter companies from transitioning to EVs, fearing that electric options may not meet their operational standards.
• Environmental Considerations: The lifespan of a battery can be threatened by extreme weather conditions, which is likely in many areas of the U.S. Decreased battery efficiency and concerns around replacement costs can deter commercial operators from switching their fleets to EVs.
• Regulation Uncertainty: The evolving regulatory landscape can make businesses hesitant to invest in EV technology without clarity on long-term policies.

Addressing these challenges will require significant efforts and education from OEMs, policymakers, and businesses. Investments and incentives are already being made, making it clear that momentum is building, however widespread adoption of EVs in commercial trucking is still years away.

PWW will continue to monitor the market for commercial adoption of electric vehicles. Will it continue to be limited to large companies with significant buying power in some areas of the country, or will we see rapid expansion of EVs throughout various industries and locations?