Daimler challenges Tesla, Volkswagen with new electric big rig truck

President and CEO of Daimler Trucks North America Roger Nielsen unveils the all-electric eCascadia big rig truck at an event at Portland International Raceway in Portland on Wednesday, June 6. (Reuters)
Updated 07 June 2018

Daimler challenges Tesla, Volkswagen with new electric big rig truck

  • Truck buyers anticipate global regulation to curb pollution from trucks and see advantages from lower fuel and maintenance costs of electric vehicles
  • Success for the larger class 8 trucks would hinge on lowering battery costs

PORTLAND, Oregon/FRANKFURT: Daimler unveiled on Wednesday an all-electric big rig truck it promises to have in production in 2021, as the German automaker mounts a major challenge to European and American rivals, including new entrants like Tesla.
Truck buyers anticipate global regulation to curb pollution from trucks and see advantages from lower fuel and maintenance costs of electric vehicles, but a fleet technology switch is far from certain given challenges of cost, charging infrastructure, range, and the potential for heavy batteries to constrict payloads.
Daimler’s Freightliner eCascadia is an 18-wheeler with a 250-mile (400 km) range, aimed for regional distribution and port services, while Tesla has said that its Semi — which it expects to build by 2020 — will be suited to longer-distance runs with a 500-mile range.
Daimler on Wednesday also unveiled a medium-duty Freightliner eM2 106, with a range of up to 230 miles, designed for local distribution, such as beverage delivery, which some analysts see as the “sweet spot” of the emerging electric truck market.
Daimler said it will deliver a total of 30 prototypes on the two models to customers later this year for field-testing and expects to have the trucks in production in 2021.
Daimler, as the world’s largest truck maker, has much to lose as competition for electrified trucks intensifies.
The company’s Illinois-based rival, Navistar International Corp, and its partner Volkswagen, which is spending $1.7 billion on electric drives, autonomous vehicles and cloud-based systems by 2022, aim to launch their own medium-duty truck in North America by late 2019.
Daimler, with a $66.4 billion market capitalization and best-known for its luxury Mercedes-Benz brand, has a 40 percent share of the roughly $39 billion North American heavy-duty truck market.
Local delivery “makes an enormous amount of sense because it doesn’t have the long-range requirements, yet puts on enough miles on a daily basis where you can get fuel savings,” said Tim Denoyer, a senior analyst at consultancy ACT Research.
Success for the larger class 8 trucks would hinge on lowering battery costs: “While electric truck sales will be fairly significant in coming years, I don’t think it will displace diesel anytime soon especially in highway, long-haul trucking where obviously battery capacity and range anxiety present itself,” Denoyer said.
The company will use batteries from German firm Akasol, a spokesman for Daimler told Reuters. No final sourcing decisions on batteries have been made, however, he said.
Akasol buys lithium cells and adapts them to battery systems used by bus makers Daimler and Volvo among others as well as in industrial vehicles, locomotives and ships. Reuters reported earlier this week, citing sources, that Akasol is preparing for a Frankfurt stock market listing before the summer break.
Daimler Trucks North America Chief Executive Officer Roger Nielsen said the truck’s payload had been curbed by the size of batteries.
“Overall, this is an ideal application for customers whose routes have a distinct radius and whose operating model provides time for battery recharge,” he said.
A heavy-duty commercial truck runs up to 100,000 miles a year, and Tesla has promised a 20-percent saving on current per-mile operating costs, to some skepticism.
Tesla also has more than 450 reservations for its truck and expects to have a head start, although its plans are still developing and the roll-out of its Model 3 sedan has been plagued by production problems. CEO Elon Musk plans to start production in 2020 but there is no Tesla truck factory yet.
Martin Daum, head of Daimler’s trucks and buses divisions, took a jab at Tesla when asked during an interview with Reuters whether Daimler would start accepting truck reservations with cash down payments, as Tesla does to raise funds.
“We don’t need the down payments to finance our investments,” Daum said after flashing a smile. “We give (customers) prototypes. We don’t charge for that. It’s gaining knowledge on their side, as well as on our side. Then we sell the trucks and then we deliver the trucks. We don’t need any pre-orders.”
Daimler also announced a new research and development center for autonomous driving in Portland, which will work with existing facilities in Stuttgart, Germany, and Bangalore, India on getting self-driving freight trucks on the road.
Stuttgart-based Daimler will invest more than €2.5 billion ($2.9 billion) in R&D at its truck operations by 2019, with more than €500 million earmarked for electric heavy-duty commercial vehicles, connectivity and self-driving technology.
Daimler Trucks expects a strong second half of the year but second-quarter business remains challenging, finance chief Jochen Goetz said, citing problems in the supply chain. He also said the truckmaker would focus on executing its previous savings plan and aim to lower costs by €1.4 billion as planned by 2019.

Gulf defense spending ‘to top $110bn by 2023’

Updated 15 February 2019

Gulf defense spending ‘to top $110bn by 2023’

  • Saudi Arabia and UAE initiatives ‘driving forward industrial defense capabilities’
  • Budgets are increasing as countries pursue modernization of equipment and expansion of their current capabilities

LONDON: Defense spending by Gulf Arab states is expected to rise to more than $110 billion by 2023, driven partly by localized military initiatives by Saudi Arabia and the UAE, a report has found.

Budgets are increasing as countries pursue the modernization of equipment and expansion of their current capabilities, according to a report by analytics firm Jane’s by IHS Markit.

Military expenditure in the Gulf will increase from $82.33 billion in 2013 to an estimated $103.01 billion in 2019, and is forecast to continue trending upward to $110.86 billion in 2023.

“Falling energy revenues between 2014 and 2016 led to some major procurement projects being delayed as governments reigned in budget deficits,” said Charles Forrester, senior defense industry analyst at Jane’s.

“However, defense was generally protected from the worst of the spending cuts due to regional security concerns and budgets are now growing again.”

Major deals in the region have included Eurofighter Typhoon purchases by countries including Saudi Arabia and Kuwait.

Saudi Arabia is also looking to “localize” 50 percent of total government military spending in the Kingdom by 2030, and in 2017 announced the launch of the state-owned military industrial company Saudi Arabia Military Industries.

Forrester said such moves will boost the ability for Gulf countries to start exporting, rather than purely importing defense equipment.

“Within the defense sector, the establishment of Saudi Arabia Military Industries (SAMI) in 2017 and consolidation of the UAE’s defense industrial base through the creation of Emirates Defense Industries Company (EDIC) in 2014 have helped consolidate and drive forward industrial defense capabilities,” he said.

“This has happened as the countries focus on improving the quality of the defense technological work packages they undertake through offset, as well as increasing their ability to begin exporting defense equipment.”

Regional countries are also considering the use of “disruptive technologies” such as artificial intelligence in defense, Forrester said.

Meanwhile, it emerged on Friday that worldwide outlays on weapons and defense rose 1.8 percent to more than $1.67 trillion in 2018.

The US was responsible for almost half that increase, according to “The Military Balance” report released at the Munich Security Conference and quoted by Reuters.

Western powers were concerned about Russia’s upgrades of air bases and air defense systems in Crimea, the report said, but added that “China perhaps represents even more of a challenge, as it introduces yet more advanced military systems and is engaged in a strategy to improve its forces’ ability to operate at distance from the homeland.”