Loading large trucks in California attracts attention from private money – Orange County Register

Authors: Tope Alake and Cailley LaPara | Bloomberg

Hundreds of millions of dollars in grants through state and federal programs have helped spur an influx of spending to develop electric vehicle chargers for America’s heaviest trucks, which produce more than their fair share of emissions but are among the slowest to transition away. from petroleum-based fuels.

Greenlane Infrastructure – a $675 million joint venture between Daimler Truck North America, NextEra Energy Resources and BlackRock – has just begun work on the flagship site of a planned 280-mile commercial charging corridor between Los Angeles and Las Vegas.

TeraWatt Infrastructure, which has raised more than $1 billion from investors including Vision Ridge Partners, is building a network of durable charging stations connecting the Port of Long Beach with El Paso, Texas.

WattEV, backed by Apollo Global Management and Vitol, already operates several charging stations and has 15 more “grant-funded and shovel-ready, covering the entire West Coast,” said Salim Youssefzadeh, CEO of WattEV.

“We’re seeing the industry make more investments,” especially as projects move beyond the pilot phase, said Erika Myers, executive director of Charger Interface Initiative North America, an advocacy group whose members span the entire electric vehicle charging supply chain, from utilities to automakers. There has been a lot of “excitement and enthusiasm for the development of electrification in medium- and heavy-duty space recently.”

For countries and states looking to reduce their carbon footprint, electrifying the medium- and heavy-duty transportation sector probably seems like a no-brainer: These larger trucks produce nearly a quarter of the U.S. transportation sector’s greenhouse gas emissions, even though they account for just 5% of vehicles on the road.

But uptake across the U.S. has been slow, with BloombergNEF calling the U.S. market a global “lag” in decarbonizing its commercial fleets. The latest data shows that medium and heavy trucks accounted for about 6% of electrified commercial vehicles sold in the U.S. in June. In the entire first half of 2024, less than 1,000 zero-emission trucks were sold in the US.

The classic chicken-and-egg conundrum is largely to blame: Some manufacturers are slow to produce larger electric trucks, citing a lack of charging infrastructure, but who wants to build chargers for a commercial EV fleet that doesn’t yet exist? A congested power grid that is already strained by the demand for artificial intelligence doesn’t help either.

And the trucks themselves can be expensive, especially for drivers who already have a working diesel option. What’s more, according to BNEF’s analysis, it’s unclear whether any state and federal policies aimed at this sector could come under fire after November’s presidential election.

The market may soon reach a tipping point, and more electric trucks are likely to hit the road this decade as long as charging infrastructure keeps pace with this trend.

A white paper from the International Council on Clean Transportation estimates that there will be about 1.1 million zero-emission Class 4-8 trucks in 2030, up from just a few thousand today, thanks to California state goals and federal funds freed up as part of inflation reductions Work.

Activity is also increasing in Washington, D.C., where the Biden administration is now soliciting input from stakeholders on medium- and heavy-duty vehicle charging technology following the release of a long-haul trucking electrification roadmap in March. Tesla, which delivered its first electric Semi trucks to customer PepsiCo Inc. in 2022, is just one of the high-profile companies looking to expand in the emerging market.

Given the potential growth prospects, private money gives the sector a good, tough look.

For example, private equity group EQT AB, which backs charging infrastructure developer and operator Voltera, has not specified how much it plans to invest in the company, said Erwin Thompson, a partner at EQT Partners. Last month, Voltera secured a $100 million loan from units of ING Group NV and Investec Plc, which is in addition to approximately $100 million already provided to infrastructure group EQT.

“Any company we invest in, you want to make sure you’re selling a growth story; you don’t sell something that is a fully harvested fruit tree,” Thompson said in an interview. “Forecasting for 2028-2029, I have full confidence that everything will be on track.”

Originally published: September 27, 2024 at 12:21 pm