Why your next tow vehicle could be electric

Aussie tradies are gearing up to go electric, with caravanners and campervanners likely to follow...

That’s the finding of a new report released today by the Boston Consulting Group, which claims that ownership price parity of electric utes and vans will be achieved as soon as 2023, helping EVs to outsell traditional light commercial vehicles by the end of the decade.

In a report titled ‘The Future of Buses and Light Commercial Vehicles Is Electric – With Cost Parity Just Around the Corner’, BCG estimates that 55 per cent of new light commercial vehicles – utes and vans – sold in 2030 will be electric.

“While electrification of cars is typically the focus of transport decarbonisation, it’s important not to lose sight of the remaining half of the challenge,” the BCG report states, nominating commercial vehicles as a looming opportunity.

“Light commercial vehicles, buses and even some trucks are ripe for electrification.”

Considering there are no EV commercial vehicles currently available, it’s a big shift from the diesel-powered Toyota HiLuxes, HiAces and Ford Rangers that currently make up about 24 percent of the overall new vehicle market.

Already new players such as Roev, SEA Electric and H2X are planning to capitalise on the increasing interest in electric utes.

All three local manufacturers are planning to convert existing diesel utes to electric power, while many vehicle manufacturers are developing their own electric utes.

The American example of large electric pick-up trucks – which has Ford, Chevrolet, Rivian and Tesla battling long queues of would-be owners – suggests there is no shortage of interest in electric utes.

While BCG is forecasting initial purchase prices of electric commercial vehicles to be higher than those with internal combustion engines (ICE), it says the all-important total cost of ownership (TCO) has already reached parity with some buses and will be achieved for LCVs by 2023.

“TCO parity has already been reached for transit buses due to the high utilisation and modest energy requirements, and light commercial vehicles is only one year away,” the report says.

The majority of those electric light commercials will be battery-electric vehicles, with plug-in hybrids (PHEVs) playing “a minor side role”, according to BCG. It sees a small role (less than 5%) in the commercial vehicle space for hydrogen fuel-cell electric vehicles (FCEVs), which create electricity from hydrogen and can be filled in about the same time as a petrol or diesel vehicle.

BCG is even forecasting sales of medium-duty trucks to be 35 per cent electric by 2030, with heavy-duty trucks still predominantly ICE-powered by the end of the decade.

The difference in adoption depends on the type of vehicle and how it’s used. BCG says there will be three phases of commercial vehicles shifting to EV.

The first – which is already under way – involves city transit buses and light commercial vehicles that are confined to the major centres. Often they return to depots each day so have easily achievable charging requirements.

While we’re currently devoid of any electric light commercial vehicle alternatives, there are some coming within months, including the LDV eDeliver 9 van, LDV eT60 ute and Ford E-Transit.

The second wave of commercial vehicle EV uptake, according to BCG, involves the electrification of school buses, intra-city coaches, inter-city light commercial vehicles and some medium-duty trucks.

The third wave includes larger, heavier-duty vehicles travelling bigger distances. That includes inter-city buses, inter-city medium-duty trucks and heavy-duty trucks.

“Waves 2 and 3 of electrification will see non-depot use-cases and longer distance transportation which will be dependent on public or on-route charging infrastructure,” the report states.

“This will include light commercial vehicles used in inter-city transport, intra-city medium-duty trucks engaged in short regional distribution and hub-to-hub traffic, and some selected and special heavy-duty truck use-cases.”

In all cases it’s finances that will determine how quickly those waves kick in.

The report says “the key driver of electrification of commercial vehicles is when their TCO reaches parity with internal combustion engine (ICE) options, which is largely a function of upfront cost and utilisation”.

BCG says regulatory framework is key to helping Australia reduce its transport emissions, noting that there are already incentives in play and that more are likely as part of the recently announced National Electric Vehicle Strategy.

However, it nominates supply chain challenges, a lack of vehicle availability, EV road user charges and charging infrastructure as challenges that could slow the switch to electric within the commercial vehicle space.

Either way, it seems the era of the electric ute isn’t far away.

Related: Is this all-electric rig the future of camping?