Volvo edges ahead of Freightliner with EV big rigs

DUBLIN, Va. —Freightliner has led its U.S. diesel big rig rivals for years, commanding a market share no competitor could catch. But the nascent transformation to electric trucking provides other players an opening, and Volvo has jumped ahead.

Sales of electric trucks are still almost immeasurable compared to the roughly 150,000 heavy-duty diesel trucks manufacturers are on track to sell in the U.S. this year.

Yet Volvo holds an early lead in the U.S., according to registration data collected by S&P Global Mobility. Fleets have purchased 51 Volvo VNR Electric regional haul trucks through July. Peterbilt is at 10. Volvo's sibling company, Mack, is at seven, and Navistar's International Truck is at six. The data doesn't include 40 prototype battery electric Freightliner eCascadias and eM2s from Daimler Trucks North America in various test programs.

Volvo's lead is slight — now up to about 60 registrations, the company said — but illustrates its strategy to use electric trucking to close on Freightliner, said Peter Voorhoeve, president of Volvo Trucks North America.

Freightliner has about 40 percent of the diesel heavy-duty truck market compared to Volvo's 11 percent.

Volvo's early advantage comes from getting prototypes into real-world operations earlier than others, getting a jump on improvements and launching production at its New River Valley Factory here, Voorhoeve said.

That's allowed the company to generate what are comparatively big orders for electric trucks, including many from businesses that participated in early pilot programs, Voorhoeve said. "It is really accelerating," he said.

Performance Team, a division of Danish shipping giant Maersk, bought 16 Volvo VNR Electrics a year ago for its Southern California fleet operations serving port drayage and warehouse distribution routes. It came back with an order for another 110 earlier this year. Performance expects all the trucks to be in operation early next year.

Although Volvo doesn't provide contract details, the combined Performance Team orders are worth upward of $50 million. Electric Class 8 trucks sell for $400,000 and more, depending on brand and configuration.

Another shipping and logistics company, NFI Industries, helped Volvo launch its U.S. electric truck business by piloting two VNR Electrics in 2020. In May, it ordered 60 new-generation trucks with a range up to 275 miles, enough for NFI to make two daily trips between the Southern California ports and its inland warehouses. NFI will have 90 electric trucks including Volvo VNR Electrics and Freightliner eCascadias operating in Southern California. NFI plans to convert its entire California fleet to electric trucks.

While most of Volvo's sales are in California, where state and regional incentives provide about a third of the typical price, Volvo also is making inroads elsewhere. Manhattan Beer Distributors ordered five to serve customers in the New York region. Pitt Ohio ordered two Class 7 Volvo VNR Electric box trucks for the motor carrier's fleet in Cleveland.

Although Volvo and others are starting to produce the trucks, companies are finding it can take as long as a year to work with electric utilities and suppliers to install infrastructure. Public charging infrastructure for big trucks lags far behind that of the passenger car market. Volvo's customers must charge at their depots. That limits sales, he said.

Volvo is addressing that by partnering with several dealers and others to build five strategically located charging stations to complete a zero-tailpipe corridor between Southern, Central and Northern California. That will give companies operating electric trucks wider reach, freeing them from limited short-mileage, return-to-base operations. It also allows small fleets to test electric trucking without spending heavily on charging infrastructure. Volvo plans to complete the charging corridor by the end of next year.

Volvo also has an early lead globally. Volvo brands have logged 1,457 electric truck orders through the first half of this year, according to Guidehouse Insights. Daimler's brands have 1,280. Traton, Navistar's owner, trails with about 800. The global data includes electric buses. Paccar, which owns the Kenworth and Peterbilt brands, hasn't broken out its electric truck orders.

And although it lags, Daimler is poised to make inroads.

Daimler launched Freightliner's eCascadia production version in May, saying deliveries would start this quarter.

Although Daimler has not provided order information, some companies have announced plans to use eCascadias in their fleets. Food service distributor Sysco Corp. has signed a letter of intent to deploy up to 800 eCascadias by 2026. Pride Group, a Canadian motor carrier, ordered 200 eCascadias and 50 smaller eM2 for delivery starting mid-2023.

How much an early lead means is a question, said Ann Rundle, vice president of electrification and autonomy at ACT Research.

"Is there a chance for share to switch because Volvo was first and has a reliable product out in the market? There is a benefit," Rundle said.

But it is likely muted by the tendency of fleets to "stick with the brands they have because they know how to service them and understand the parts," Rundle said.

It's unclear whether an electric truck is enough of a departure to create large-scale brand swapping, she said.

"Volvo is certainly more vociferous about electrification. I think it's a stretch to see that as meaningful opposition to Daimler Truck Group in the U.S. at least in the medium term," said Oliver Dixon, an analyst at Guidehouse Insights.

For truck manufacturers, the key strategy is reshaping the value chain to profit from services rather than strictly from sales.

Volvo, for example, is selling its truck as a service, bundling financing, maintenance and other features into a single monthly payment.

"There's precious little aftermarket revenue with either a battery-electric or fuel cell electric vehicle, so the battleground is going to shift somewhat," Dixon said.