Electric Trucks Are Revolutionizing the Industry, Leaving Fossil Fuel-Based Transport in the Dust

Strategic Insights -

Energy industry executive Mike Nakrani has spent years trying to make hydrogen-powered trucks commercially viable, but he has finally come to the sobering realization that it's a lost cause. He now leads the push into electric lorries and buses as chief executive of VEV, a venture backed by Vitol, in Teesside, a region rebranding itself as the world's first decarbonised industrial cluster. Nakrani's epiphany stems from the vastly superior efficiency of electric vehicles, which can transport power three times more effectively than hydrogen cars. Last year, a mere 12,866 hydrogen cars were sold globally, compared to over 17 million electric vehicles, and the trend is only expected to gain momentum.

Key Takeaways:

  • Mike Nakrani, former head of BP's hydrogen operations, now leads the UK's push into electric lorries and buses, conceding that hydrogen will never be commercially viable in the transport sector.
  • Hydrogen vehicles are inefficient due to the difficulty of storing, transporting, and dispensing hydrogen, with energy losses reaching 75% when using 'grey' hydrogen from fossil fuels.
  • Electric vehicles (EVs) have displaced 1 million barrels a day (b/d) of oil worldwide, with this figure expected to rise to 1.6 million b/d over the next 12 months.
  • China's e-truck sales are booming, with the country capturing 22% of the heavy-duty market in the first half of this year, up from 8.6% over the same period last year, and expected to reach 50-80% by 2028.
  • The International Energy Agency (IEA) has been reducing its forecast for global oil demand due to increasing electrification, which could now move faster than expected.
  • Britain's expensive electricity tariffs are a key obstacle preventing e-trucks from achieving cost parity with diesel even with current government measures.
  • A trial in Middlesbrough using a 42-ton electric lorry demonstrated a 2.3-tonne reduction in CO2 emissions over 10 days at a cost comparable to a diesel equivalent.

Statistics:

  • 12,866 hydrogen cars were sold globally last year.
  • Over 17 million electric vehicles (EVs) were sold in 2023.
  • Electric vehicles have displaced 1 million barrels a day (b/d) of oil worldwide, set to rise to 1.6 million b/d over the next 12 months.
  • China's e-truck sales captured 22% of the heavy-duty market in the first half of this year.
  • The International Energy Agency (IEA) has reduced its forecast for global oil demand due to increasing electrification.
  • Britain's average power prices per kWh for non-household consumers in late 2024 were £0.32, one of the highest in Europe.
  • Finland's average power prices per kWh for non-household consumers in late 2024 were €0.08, one of the lowest in Europe.

Sources:

  • The Financial Times
  • Institute for Energy Economics and Financial Analysis (IEEFA)
  • Rhodium Group
  • Bloomberg New Energy Finance
  • Eurostat