Decarbonizing Medium- & Heavy-Duty On-Road Vehicles - Zero-Emission Vehicles Cost Analysis

DecarbonizingMedium-&Heavy-DutyOn-RoadVehicles:Zero-EmissionVehiclesCostAnalysis CatherineLedna,MatteoMuratori,ArthurYip,PaigeJadun,andChrisHoehne March2022 ExecutiveSummary •Withcontinuedimprovementsinvehicleandfueltechnologies(inlinewithU.S.DepartmentofEnergytargetsandvettedwithindustry),zero-emissionvehicles(ZEVs)canreachtotal-cost-of-drivingparitywithconventionaldieselvehiclesby2035forallmedium-andheavy-duty(MD/HD)vehicleclasses(withoutincentives). •Assumingeconomicsdriveadoption,ZEVsalescouldreach42%ofallMD/HDtrucksby2030,reflectinglowercombinedvehiclepurchaseandoperatingcosts(usingreal-worldpaybackperiods). •Inthisscenario,ZEVsalesreach>99%by2045,and80%oftheMD/HDstocktransitionstoZEVsby2050,reducingCO2emissionsby69%from2019. •Twotechnologicalsolutions—batteryelectricvehicles(BEVs)andfuelcellelectricvehicles(FCEVs)—areviableinmultiplemarketsegments,offeringalternativepathwaysfordecarbonization. –BEVstendtobecomecost-competitiveforsmallertrucksbefore2030andforshort-haul(<500-mile)heavytrucksbefore2035. –HydrogenFCEVstendtobecomecost-competitiveforlong-haul(>500-mile)heavytrucksby2035. ExecutiveSummary(cont.) •Thisstudylooksatthreedifferentvehicleclassesandeightdifferentusecases/drivingdistances.ZEVadoptionismorerapidinlighterandshorter-distancevehicles,whichalsotendtobecentrallyfueled,reducinginfrastructurerisk. –Basedonexternalstudies,busesareassumedtofullytransitiontoZEVby2030(100%sales). •Sinceeconomicsaremorelikelytodriveadoptioninbusinessapplications,especiallyinlargercompanies,itispossiblethatdemandforZEVscouldriserapidlyinMD/HDtrucksoncecostparityisreached.Manufacturingcapacityandcharging/refuelinginfrastructurewillneedtoincreasecommensuratelytosupportvehicleadoption. •Operatingcostsavingsareacriticalfactor,especiallyforheavylong-haultrucks,soresultsarehighlysensitivetoassumedfuelprices(bothfornewtechnologiesandforexistingdieselfuels).Energymanagementtechniques,proactiveutilityandcleanfuelinvestmentplanning,andassociatedpoliciesareneededtolowerfinalenergycosts. •Resultsarealsoverysensitivetotechnologyimprovementtrajectories,adoptiondecision-making,anduncertainassumptionsaboutfuturefreightdemand,logistics,andvehicleuse. Content&Organization 1Intro&Scope 2Approach&KeyAssumptions 3System-LevelPerspective:MarketSegmentation 4CostParityAnalysis 5KeyResults 6SupplementalSlides:MethodsandAssumptions 7Sensitivities INTRO&SCOPE IntroandScope •Achievinganet-zeroemissioneconomyby2050requiresaggressivecurbingoftransportationemissions. •Medium-andheavy-dutyvehicles(MHDVs)arethesecondlargestcontributortotransportationemissions(21%). oMajorsourceoflocalairpollutiondisproportionallyaffectingdisadvantagedcommunities. oWeconsiderallon-roadvehicles>10,000lbs. (freightandnon-freighttrucks,buses). •Scope:modelpotentialZEVadoptionbasedoneconomics(costofdriving)toinformfeasibledecarbonizationpathways. MHDVSegmentation •MHDVsincludemultipleapplicationsandusecases,bothintermsofvehiclesizeclassanduse(vehiclemilestraveled[VMT]andrangerequirements). •Heavytrucksuse70%ofenergy(41%ofstock). •Notalltrucksarethesame:differentsizeclassesandusecasesleadtodifferentvehiclerequirementandcosts,determiningopportunityforZEVadoption. •Zero-emissionvehicles(BEVsandFCEVs)offeraviabledecarbonizationpathway. •Whilecommercialdeploymentisstilllimited,therearegrowingopportunitiesastechnologyisadvancingrapidly. •Low-carbonliquidfuelscanalsohelpreduceemissionsfromlegacyvehicles. 2019MHDVEmissions(445MMtonCO2) GoalofthisAnalysis Goal:EconomicanalysisoftheMD/HDtransportationsectorthatidentifiescost-effectiveadoptionopportunitiesforzero-emissionvehiclesbasedontotalcostofdriving. Approach:ModelpotentialZEVadoptionbasedoneconomics(costofdriving): •Leverageextensiveworkoncomponent-levelandvehicletechnologyevolutionovertimeestimatingfuturevehiclecostsandcharacteristics(usedaninputsinthisanalysis). •Leverageandexpandpreviousanalysesthatfocusonsinglevehiclesandhypotheticalusecases(e.g.,fixedVMTforagivenvehicletype)andusetheTransportationEnergy&MobilityPathwayOptions(TEMPO)modelfreightdemandsegmentationtolookatsystem-leveladoptionopportunitiesandemissionsimplications: oRepresentheterogenousvehicleapplicationsbyclass(vehiclesize)anduse(VMT). oPerformacostparityanalysisbasedondiversevehicleusestoinformonreal-worldmarketopportunitiesfordifferentvehicleclassesandusecases. oEstimateenergyuseandemissionsovertimefortheentireMHDVstock. APPROACH&KEYASSUMPTIONS WhatisTEMPO? TheTransportationEnergy&MobilityPathwayOptions(TEMPOTM)modelisacomprehensivetransportationdemandmacromodeltoexplorelong-termscenariosofenergyuseacrossalltransportationsegmentsandtointegratewithlarge,multisectoralstudies. Moredetails:Muratorietal.,2021.https://doi.org/10.1016/j.trd.2021.102967 TEMPOmodelsalldomesticpassengerandfreighttraveldemandacrossalltravelmodesandprojectstheirevolutionovertimetogeneratepossibletransformationscenarios. •Populationandeconomicgrowthdriveincreaseddemandformobilityovertime. •55%growthintotalMD/HDtruckVMTbetween2019and2050(alignedwithAnn