8 Trendlines from Work Truck Week 2023

NTEA’s Work Truck Week 2023 drew 14,885 attendees, beating the record attendance in 2019. The event is fully recovered from the pandemic disruption and then some. The event is fully recovered from the pandemic disruption and then some. For the work truck industry (and me) it is truly old home week and new product Christmas rolled into one. Check out this detailed historical record of the origins of Work Truck Week, its evolution, and its growth.

I was looking back at our coverage of Work Truck Week over the years, particularly as it relates to new technologies. In 2017, EVs began to encroach on the alt-fuels announcements and exhibits, and by 2019 the event was ensconced in the new electrification era. This year the press conferences were dominated by electric trucks and products.

The EVs shown off at the pre-pandemic events hardly made it to production. A few electric models from established OEMs are still slowly ramping up to wider sales, but the rest are gone,only four short years later, and in many cases the OEMs are gone too.

We all knew electrification 1.0 was an experiment. The difference today is that the industry has paved the way to electrification with billions of dollars in the pipeline, from R&D reallocation and manufacturing plant switchovers to the massive buildout of EV infrastructure. The question today is, how soon?

In a presentation at the Green Truck Summit, Andrew Wrobel of Escalent shared data projections that zero emission vehicles (ZEVs) will make up 20% of the commercial vehicle market by 2030. “There will be no hockey stick moment of adoption,” he said.

In the past five years, at least 35 new, independent electric commercial vehicle manufacturers have emerged to elbow their way next to incumbent OEMs now selling EVs — in a market that will still be 80% ICE vehicles for a while. It’s clear that many of the exhibitors on the show floor won’t make it to 2030.

This maturing market will produce less churn, so unlike the past five years, the products we saw last week have a much better chance of meaningful sales and production. But getting there will be a bumpy ride.

Upfitters Showcase Packages for EVs

One development that stood out this year was the number of new upfit packages for EVs. Canoo had several of its Class 1 electric cargo Lifestyle Vehicle units in different exhibits, including rack-and-bin packages from Sortimo and Ranger Design, and a purpose-built upfit managed by Holman for Schindler Elevator’s fleet.

The J.B. Poindexter family of body manufacturers and upfitters showcased various combinations, including a Reading truck body on a Ford chassis with a ZEVx electrified repower system under the hood; a Leer truck cap on a Lordstown Endurance pickup; and an electric mail truck for the Canadian Post with a Morgan Olson body and a Masterack cargo management system.

The ongoing industry trend to lightweighting bodies and upfits takes on even more importance with EVs, as a lighter package gives back a few precious miles in range. Sortimo is moving from aluminum-and-steel-composite rack and bins to “aerospace” aluminum that is 20% lighter, at no upcharge to the customer.

Tight Vehicle Supply Drives Efficiencies

Supply is finally loosening for trucks and vans. The U.S. Commercial Vehicle Market Report, released by Commercial Truck Trader, NTEA, and S&P Mobility in relation to the event, shows continuing supply chain and sales improvements, though registrations still lag.  

Nonetheless, the need for fleets to hunt for small amounts of efficiencies remains. This was reflected in the new bodies, upfits, and rack-and-bin packages on the show floor.

With the continued lack of cargo van availability, upfitters such as Adrian Steel exhibited new packages on full-size pickups. These could be a replacement option for fleets that no longer have small vans as an option when they exit the U.S. market.

Charles Bowles of Commercial Truck Trader said a popular move for fleets in this dearth of supply in 2022 was to order pickups with a box delete, leaving fleets to get creative with a body.

Another option is to move from those small ICE vans into the new crop of small commercial EVs. In addition to Canoo’s Class 1 van, Mullen Automotive exhibited its new Class 1 EV cargo van and Class 3 low cab forward. As the Class 1 van’s cargo areas are smaller than that of a Transit Connect, the upfit packages are designed to maximize every inch of space.

Bowles also added perspective on EVs in the commercial space right now: The Commercial Truck Trader site averages 200,000 listings and 2 million visits a month, with about a 50/50 split behind new and used. Searches for EVs are rising, but still amount to only .5% of all searches. That should change as the product pipeline fills this year.

New Niches & Growth for Alt Fuels

Fleets are continuously under corporate ESG goals and emissions mandates, but they can’t (or don’t want to) go full EV. Alt fuels such as CNG, propane, and renewables are still options.

In fact, Escalent projects slight growth for CNG and more pronounced growth for propane through 2028, followed by a tapering off to 2030. (By comparison, Escalent projects much slower growth for hydrogen from 2026 to 2030.)

One reason for propane’s potential is its relative abundance. “We’re producing 30 billion gallons of propane and exporting 20 billion gallons,” said Todd Mouw of Roush CleanTech on the show floor. “There’s opportunity if we can keep some of that home.”

With virtually zero emissions, renewable propane is an even greener option and it doesn’t need changes to the existing delivery infrastructure. Though it’s growing at a much smaller in scope: The market has about 25 million gallons of renewable propane of today, with California taking 4 million gallons, said Mouw.

One new opportunity for propane is mobile EV charging. Mouw pointed to the Propane Education & Research Council's (PERC) booth, which exhibited a mobile charging unit from Propane Fueling Solutions and InCharge. The unit can refuel vehicles with propane autogas or recharge with DC level 3 fast chargers independent of the grid. The infrastructure combines a 60kW propane generator with wind and solar power to create a microgrid that's greener than diesel-powered solutions. 

Complications Coming for EV Upfits?

Configuring an upfit for an electric truck or van is more complicated than just measurements — engineering must consider the truck’s electric componentry. (Don’t mess with those orange cables!) Sortimo’s EV upfit package is mounted to the van’s subfloor, avoiding any interplay with an EV’s electric system.

Here’s a story in that regard, recounted on the show floor: A rep for an electric OEM worked on several upfits for a fleet customer’s new electric truck, including an electric liftgate. After the finished truck was in the customer’s hands, the liftgate started shorting the truck’s power system. The truck was out of service for a month.

That became a problem for everyone – the OEM rep, the liftgate company, and the fleet. We’re still figuring out this new technology. More mistakes will be made, but hopefully with as little downtime as possible.

EV Price Premium is Relative

Judging from Escalent’s projections, we won’t have commercial EV economies of scale at least for the next few years. As such, the price premium over ICE vehicles will remain wide, and fleets will be dependent on rebates and incentives.

That said, the rebate and incentive landscape is growing. I asked around if anyone knew whether the Biden administration’s IRA credits for EVs will be stackable with state help. Many weren’t sure, while others said it’s possible under certain conditions.

In California, stacking an HVIP grant of up to $65,000 with IRA’s maximum $40,000 tax credit is a strong impetus to go electric. Texas’s new Clean Fleet Program allows an applicant to receive up to 80% of the incremental cost of the commercial EV over a comparable ICE vehicle. New York and New Jersey’s programs now rival California’s.

In its exhibit area, Motiv displayed a Giant Food-branded electric step van. (And had one of its drivers come out for interviews.) The metro-DC grocer took advantage of substantial funds from Maryland’s clean fleet program to put the first two commercial EVs in Maryland on the road.

Will these EV funds be renewed annually? They’re essential to increase penetration, because the TCO won’t pencil for many years.

But let’s face it, ICE vehicles are as expensive as ever, along with maintenance, parts, and the cost of downtime. New emissions regulations will force costs on diesel powertrains too.

I ran into John Mertes, who oversees a small drycleaning fleet for Ziker Cleaners in South Bend, Ind. He recently bought a used Ford Transit Connect with 100,000 miles for $25,000. “I had no choice,” he said.

Van maintenance is an ongoing pinch point, Mertes says. With parts delays the norm, what used to take five hours recently took two weeks. And employment costs have doubled for his entry-level workers in five years. For Mertes, fleet costs are relative. Fleet is only 5% of his business’s budget, while personnel costs represent 50%.

Add cost of money as a pain point: Reconnecting with NTEA’s economist Steve Latin-Kasper, his reading of the tea leaves is that interest rates are still on an upward trend, it’s just a question of whether it’ll be a .25% or .5% jump. We’ll know at the next Fed meeting this week.

Dealers Hold the Cards

On the passenger car side, new OEMs are looking to follow Tesla’s direct-to-consumer model. On the commercial EV side, it’s the opposite. Dealers, which make up a good contingent of Work Truck Week attendees, hold the cards now more than ever.

Dealers such as Tom’s Truck Center in Santa Ana, Calif. are becoming experts in the space. These commercial dealers already know their customers’ duty cycles, and thus can spec fleet customers into the right EVs. Enterprising dealers can also consult customers on charging infrastructure, as they’re already going through the set-up process at their dealership.

Fleets are worried about EV servicing. Smart truck dealers are ready to step in with maintenance and preventive maintenance solutions. As well, they can point fleets in the right direction for funding and rebates.

Systems Integration a Growing Concern

Fleets already run several software programs and apps to manage maintenance, drivers, and safety, now they’ll need more to manage EVs and charging.

The struggle is real: Workhorse, the electric step van maker, has a side business in which they contract with FedEx Ground for a delivery route serviced by 10 trucks. The fleet manager fires up 11 different systems each morning to do his job.

Ashlee Tramutolo of Verizon Connect said the telematics provider is working on systems integrations to minimize the program shuffling. Verizon Connect, along with other large telematics providers, have online marketplaces that connect third party apps to the fleet customer through a single dashboard.

These marketplaces aren’t new, but they’re increasingly focused on electric vehicles. So, Verizon Connect manages GPS location, routing, and maintenance today, but will also be able to manage EV data through a single pane of glass.  

Can Regulations Drive New Business Models for Fleets?

Finally, regulations are driving a lot of the electrification market in the U.S. and Europe too. In Europe, the regulations go further as cities such as Munich, London, and Paris are planning to exclude non-ZEVs from their city centers.

While not a U.S. initiative yet, in Europe this may create a hub-and-spoke system in which ICE trucks drop their loads at the green zone perimeter, where they’re picked up by a fleet of electric trucks. Isuzu is ready for this, as it unveiled its first ever electric truck, the Class 5 cabover N Series EV, at the show.

By the way, Isuzu’s new EV model will come with four battery configuration options. After a while, we’ll finally understand if fleets are over-spec’ing EV batteries.