Only an Oil Glut Would Slow a Rapid Electrification of Trucks

Having the price of diesel above $3 per gallon guarantees a $30,000 per year incentive to switch from diesel to electric for heavily used Semi and large trucks. Currently, prices at the $4.5 to $5 per gallon level provide a $60,000 per year incentive to switch from diesel to electric.

There will be a shift for ten of thousands of the 270,000 Semi trucks sold each year in the United States because of massive subsidies and grants at the federal and state level. There are those who complain loudly that tens of billions or hundreds of billions of dollars per year grants and subsidies are government waste. The various bills have already passed. It is like this is some shocking new revelation that governments might spends billions or trillions on things that they do not agree with. California has passed a legal mandate that 30% of all trucks sold in California will have to be electric by 2030.

The 2008-2009 recession took prices down to $2 per gallon briefly.

The electric Semi won’t sell for less than a diesel model. So long as diesel goes not drop below $1.5 per gallon there will be a significant operating cost advantage for electric Semi. 100,00 miles/year $17k of electricity at 10 cents per kwh wholesale, 14300 gallons used for 7mpg to go 100,000 miles/year. $5/gallon $71.5k, $4/gallon $57.2k, $3/gallon $42.9k, $2/gallon $28.6k. Last 20 years briefly touched $2/gallon twice.

$7-8 per gallon in Europe vs 20 cents per kwh in europe. $100-110k/year vs $34k/year for electricity.

$4 per gallon in China vs 9 cents per kwh. $57k/year for diesel vs $16k/year for electricity.

Oil Advantage for Countries that Shift

If all trucks are made electric 40 million large trucks and 80 million smaller work trucks globally (not counting another 100 million casual trucks and large SUVs) then this removes demand for 17 million barrels of oil per day. This is 17% of global oil for just large trucks. Shifting that much transportation energy to solar, wind or natural gas and coal means adding 20-40% to fixed electrical generation. The USA is already adding 70 Terawatt-hour per year in solar and wind at current annual pace. World is about 4-5X more solar and wind. Yes, massively subsidized but all energy and transport is massively subsidized.

Pepsi will shift at least 30,000 of their 44,000 trucks because of massive subsidies and because they can cut their $2 billion per year fuel bill to $500 million per year in electricity. Capital costs over 3-5 years to payback. Packback cut by 2-3 years because of subsidies.

For China the truck electric shift means, cutting out 5 million barrels per day of 10 million barrel per day that are currently imported. It is like getting the oil of Iran and Iraq without any of the politics and war. Japan would cut out 1 million barrels per day of oil. India 1 million barrels per day. US 2 million barrels per day. Europe 2 million barrels per day. Europe was importing 2 million barrels of oil per day from Russia before the war.

How many tens of billions of subsidies would be justified to shift from imported oil dependence to domestic energy sourcing?

Every million barrels of oil per day is $28 billion per year to import. China would benefit by about $140 billion per year in lowered oil imports. However, the geopolitical and strategic advantage has even more value.

Megapacks Needed

I have written extensively that the grid has to be modified to handle the electric trucks. It is a feature for Tesla. The grid cannot handle it. You must have the 3.9 megawatt-hour megapacks to buffer the grid. About one megapack per 5-8 large trucks and for every 20 cybertrucks.

Pepsi had four megachargers (version 1 at 750 kw charging next ones will be 1-2 megawatt). Five to eight trucks per megacharger. Only 150-300 kilowatt draw max for prime factory utility customer. Must have big battery and solar (costco size for 4-6 megawatt hours per day in sunny areas) to flatten the draw for no very costly and impossible peak draws.

The billions and tens of billions for solar, grid and batteries is already happening.

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