Daimler, Volvo Show Hydrogen is Here, Diesel Has a Sell-By Date

November 2, 2020

By Jerry Hirsch
Trucks.com

Volvo Group and Daimler Trucks created a joint venture that will develop, build and commercial hydrogen fuel cell systems for heavy-duty trucks. That development, plus recent moves by Toyota, Hyundai and other commercial vehicle manufacturers, signal a sea change for trucking. Diesel is on its way out – although it will take several decades – hydrogen will become the go-to fuel for long-distance freight.

These truck builders are mature companies rather than startups attempting to catch a high-tech wave. They already have strong relationships with motor carriers and shippers. Daimler, which between the Freightliner and Western Star brands, owns 40 percent of the U.S. Class 8 truck market, certainly understands where the market is headed. Volvo has another 20 percent between the Volvo and Mack brands.

It’s easy to say that the companies are reacting to what’s going on in Europe, where cities and countries are starting to levy high taxes on carbon-producing fuels and plan increasingly strong regulation on diesel fuel, including bans. But much of what these truck builders do in Europe finds its way into their American brands. There may be a lag but expect hydrogen Daimler and Volvo trucks on U.S. roads.

And it’s not just two companies moving in this direction. Hyundai earlier this year started using fuel cell truck to haul goods for retailers in Switzerland. It plans to grow the fleet to more than 1,600 trucks over the next several years. The South Korean automaker plans to start offering fuel cell trucks in the U.S. and expects to see 12,000 from multiple manufacturers on the road by 2030.

After testing fuel cell trucks in Southern California for several years, Toyota is jumping into the market. It is working with Hino, the automaker’s truck subsidiary, to develop a fuel cell version of the XL Series truck, relying on fuel cell technology Toyota is pulling from passenger cars.

All of these companies say multiple factors make hydrogen an attractive fuel for trucking. It leverages the work they all have done developing electric trucks and drive systems. Electric powertrains don’t care whether the juice comes from a massive battery pack or a fuel cell stack. That’s a real-world technology that will grow rapidly over the next five years.

The companies believe fuel cell and battery-electric trucks will share the road, depending on the use case. “In the future, the world will be powered by a combination of battery-electric and fuel-cell electric vehicles, along with other renewable fuels to some extent. The formation of our fuel-cell joint venture is an important step in shaping a world we want to live in,” says Martin Lundstedt, chief executive of Volvo Group.

Earlier this year, Lundstedt told Trucks.com that he sees battery-electric trucks as the right technology for local-hauling and drayage. That’s basically anything that leaves from a distribution center or yard, runs a route and returns for recharging. Fuel cell trucks, he said, would work for long-haul trucking.

One reason is that fuel cells free Class 8 electric trucks from having to haul massive, heavy batteries. That leaves payload for freight and bolsters the revenue equation. Hydrogen fuels at about the same speed as diesel. Fuel cell trucks have a massive advantage over battery-electric vehicles in that regard. There’s no waiting around for a charge.

And like electric vehicles, fuel cell trucks should have far lower maintenance expenses and higher reliability than diesel trucks. All those diesel emissions control systems, complex transmissions and internal combustion engines are expensive to fix and break down too often.

The Volvo-Daimler partnership is focusing on developing fuel cell systems for long-haul trucks. That’s not to say the road to hydrogen trucking is obstacle or risk-free. A big breakthrough in battery technology could lower the cost of electric trucks enough to make fuel cell development uncompetitive.

There’s almost nowhere to fill a truck now. But even here, the economics get interesting. Hyundai says it would take only 10 to 15 trucks fueling daily to make a hydrogen station profitable. It’s easy to imagine a network of filling stations at depots and along major highways in the U.S. Existing truck stops could add the facilities, creating a network of stations about 200 miles apart.

Finally, there’s the expense. A Class 8 diesel truck runs about $150,000. It will be years before fuel cell trucks reach price parity. That’s one reason why Hyundai’s trucks in Switzerland are essentially a pay-per-haul play rather than a vehicle sale.

Volvo and Daimler acknowledged the extended time frame for fuel cell deployment. "The ambition of both partners is to make the new company a leading global manufacturer of fuel cells, and thus help the world take a major step towards climate-neutral and sustainable transportation by 2050," they said in a statement.

But they also see fuel cell potential that goes beyond trucking. The technology can be used for stationary power generation and emergency power. Both companies promise to remain competitors in all other areas such as vehicle technology and fuel-cell integration in trucks. And they will have plenty of competition from startups such as Nikola and rivals like Toyota, Hyundai, Kenworth and others.

With big, legacy companies jumping into fuel cell technology and environmental regulators globally giving it a push, it's hard to see how diesel can survive long term.

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