Capital Equipment News May 2018

EDITOR'S COMMENT

STATING THE CASE OF THE ELECTRIC REVOLUTION

I recently visited the Netherlands on a business trip, and one of the major talking points for me was that electric cars are fast becoming a common sight on the country’s roads. We would all agree that alternatively fuelled vehicles are an important part of reducing the global carbon footprint. European companies have put most of their focus on the e-mobility components of the charging infrastructure and services, which have always been the stumbling block as far as rolling out electric cars is concerned.

When looking at one of the e-mobility sectors, electric cars, figures show that their numbers have grown dramatically in the past year. The number of electric passenger cars on the road in the Netherlands amounted to approximately 115 000 in 2016, more than double the amount in 2014. Elsewhere, there are more than 90 000 electric and plug-in cars in the UK. construction equipment eventually follow. We have already seen some commercial truck launches from major OEMs and the revolution is set to continue unabated. For example, in July 2017, Daimler celebrated the start of production of its Fuso eCanter, said to be the world’s first all‑electric light-duty truck. Elsewhere, Volvo Trucks has introduced its first all-electric truck for commercial use – the Volvo FL Electric for urban distribution and refuse operations, among other applications. Sales and series production of the new model will start in Europe next year. As you will see in the Profile section of this edition of Capital Equipment News , the case for electric trucks is becoming more compelling globally and by 2025 the global light/medium/heavy-duty hybrid and full electric truck segments are expected to achieve annual sales of more than 2,25 million units. The market is currently about 61 000 units across the globe. From a construction equipment perspective, the electric revolution is also taking shape. In 2016, I attended Volvo Construction Equipment’s famous Volvo Days in Sweden, where the OEM demonstrated its EX2 – a fully electric compact excavator said to deliver zero emissions, 10 times higher efficiency, 10 times lower noise levels and reduced total cost of ownership than its diesel-powered counterparts. However, Volvo’s innovation is still a prototype and there is no set date for commercial rollout. Earlier this year, JCB announced it had It’s normally the case that where automobiles go, trucks, buses and

developed its first ever electric digger in response to customer demands for a zero emissions machine that can work indoors, underground and close to people in urban areas. The 1,9-t mini-excavator can be charged by simply plugging it into a standard 230 volt domestic electricity supply. Long term, it looks like the ownership costs of running hybrid and electric trucks and construction machines will be substantially lower. From a user perspective, of course the big gain will be lower diesel costs. But how much should the customer allocate for battery life and replacement? Or the maintenance of electric motors? In my conversation with a mobility expert from Frost & Sullivan, he alluded to the fact that policy and emission regulations form part of the legal and social agendas pushing for alternatives to combustion engines. But, from a cost-effectiveness point of view, how will electric trucks, for example, compare to their petroleum counterparts in terms of total cost of ownership for the end user? He reasons that right now, electric trucks won’t reach cost parity with their gasoline, diesel or NG counterparts, unless supported by incentives and subsidies. Depending on the truck segment, it is expected that electric trucks will make economic sense only post 2019 for LCVs (less than 6 t GVW), post 2022 for medium duty (MD) trucks (greater than 6 t to 16 t GVW), and post 2024 for heavy duty (HD) trucks (greater than 16 t GVW). Added to this is that battery costs and performance restrictions are the main reasons why eTrucks are still struggling to make a mark. Consequently, I am of the view that the arrival of electric, hybrid or even autonomous machines will undoubtedly drive down the total cost of ownership. However, these new forms of equipment won’t fundamentally change the complexity – or importance – of accurately calculating total cost of ownership.

Munesu Shoko – Editor

capnews@crown.co.za

@CapEquipNews

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