“The smaller and more automotive you are, the greater the scale of production, the lower the cost,” Roeth said. “As you move to a cutaway, where you have to work with a different manufacturer to get that box on, the cost challenges go up.” That’s true for both EV and internal-combustion vehicles in this class, he said.
Still, manufacturers of battery-electric trucks stand a good chance of making headway across market segments while fuel prices are high, Cantor said.
Workhorse has taken a more circuitous route, Roeth said. He worked at the company back when it was an affiliate of Navistar International making chassis for internal-combustion-engine trucks. In 2013, Workhorse was acquired by startup AMP Electric Vehicles and shifted to making battery-electric chassis.
Those losses were driven in part by higher investments in manufacturing, as Workhorse retools its factory in Union City, Indiana, for the latest generation of its all-electric chassis, featuring more efficient batteries, drivetrains, and power-control systems. That factory is capable of producing up to 5,000 vehicles per year.
“We’re not just sticking an electrified powertrain on what we currently sell,” said Griffith, who was CEO at Motiv before the merger. “You can get some efficiencies out of that. But you can’t capture the full benefits of a fully software-defined vehicle without going all the way.”
Getting to up-front price parity
The primary barrier to fleet electrification is the up-front cost of electric trucks. Right now, “a standard rule of thumb is that these vehicles are going to cost two times more than the equivalent cost of a diesel or gasoline version,” Calstart’s Richard said.
But there’s a lot of variation. Commercial vehicle pricing data “is not as transparent and easy to access as [data on] passenger cars,” Cantor said. Many vehicles are custom-designed, and pricing varies greatly depending on factors such as bulk purchase orders and preexisting relationships with fleet operators.
In the case of Workhorse, Griffith estimated that the company’s electric step vans cost about 30% to 40% more than comparable fossil-fueled vehicles. In early April, Workhorse dropped the price of its standard-sized W56 battery-electric step vans by roughly $60,000 to bring them just under $200,000 apiece, about level with the highest-end gasoline- or diesel-fueled alternatives.
The payback time on an electric truck depends on a mix of things — the model, state incentives, fuel prices, and so on. In states like California and Washington, which have generous incentives, buyers can recoup the extra costs on Workhorse’s larger step-van model in three to five years depending on gas prices, according to the company’s chief communications officer, John Williams.
Whether these kinds of paybacks are fast enough will depend on the fleet operator.
In general, bigger operators can afford to take a risk and wait longer, according to Richard. But Calstart presumes that the majority of buyers need to see a payback in three years, which coincides with how they structure financing and resale planning for their internal-combustion fleet vehicles, he said.
Today, the vast majority of electric trucks are being bought by big corporations that have both the deep pockets and the sustainability goals to make the up-front costs worth absorbing, Griffith said.
“But this is a $23 billion-a-year industry,” he said, citing estimates of annual U.S. sales of medium-duty vehicles — and to meet the needs of the broader market, “we’ve got to get the price point down.”
In certain regions, government incentives can nearly close that price gap, Richard said. Though the Trump administration and Republicans in Congress erased many of the federal tax credits that incentivized EV purchases, some EV-friendly states still provide incentives and rebates, he noted. “It makes sense for fleets to capture those up-front incentives while they stand.”
But electric truck manufacturers can’t bank on government incentives, Griffith said. “Those dollars are disappearing in the coming years. The industry has to get to the point where [total cost of ownership] blows internal combustion out of the water — and the buying price of an EV has to be closer to a 10% premium.”
To be clear, electric trucks offer significant benefits beyond lower fueling costs, Roeth said. Companies participating in his organization’s Run on Less events have tracked financial benefits like significantly lower maintenance costs as well as perks like increased driver comfort. Plus electric trucks release much less carbon and local air pollution — an important improvement, as commercial trucks are responsible for a disproportionate amount of such emissions from the U.S. transportation sector.
“For good or for bad, these trucks are used in routes that are sitting and idling for long periods of time,” Griffith said. “They emit three or four times per mile the emissions and carbon you get out of a passenger car. And they’re on routes that tend to affect dense populations,” he said.
Ultimately, he said, “if we can improve the economics and emissions together, make everything better on that route, fleets are going to adopt it.”
