Rising oil price to fuel electric truck attraction: IBISWorld


Electric trucks seen as being a boon for trucking’s competitiveness

Rising oil price to fuel electric truck attraction: IBISWorld
The Tesla Semi is part of a move to electrification boosted by high oil prices

 

The US government’s Energy Information Administration (EIA) is forecasting a rise in both West Texas Intermediate and Brent crude oil prices of 2-4 per cent next year, its latest Short-Term Energy Outlook report this month shows.

 And while its next Annual Energy Outlook is due next month, this year’s edition forecasts a price rise of 30 per cent or more, from around the US$60 mark to about US$80 in 2024.

Meanwhile, though its expectation is for a more modest rise, IBISWorld foresees electric truck demand to track higher fuel prices between now and 2024.

The research organisation anticipates fuel prices to increase over the next five years, due to a forecast rise in domestic fuel consumption, global crude oil prices and the number of motor vehicles on Australian roads.

 "As a result, the purchase costs for operators in the fiercely competitive road freight transport industry are projected to rise, which will put significant pressure on the industry’s margins," it says.

"However, adding electric trucks to road freight fleets will allow industry operators to counter the projected rise in fuel prices."

IBISWorld notes that in November 2017, Tesla unveiled its first electric semi-truck, targeting the world’s carbon intensive logistics industries.

Though the Semi will not be available until 2019, it has already gained support from some of the world’s largest logistics firms, with DHL pre-ordering 10 of the Tesla semis, and Wal-Mart and J.B. Hunt following suit.

DHL Supply Chain is expected to use the trucks for shorter distance urban freight, such as same-day customer deliveries.

"While orders of the Semi have been small, focusing more on testing of capabilities rather than fleet upgrading, the truck suggests a bright future for the road freight transport industry, with industry revenue forecast to increase at an annualised 2.3 per cent over the next five years, outpacing growth over the past five years," IBISWorld says.

"Electric vehicles will allow road freight transport companies to better compete with other forms of freight transport.

"The transition to electric vehicles is far cheaper for road freight operators than for coastal sea freight operators and domestic airlines, as initial outlay costs for electric trucks are significantly lower than for other vehicles.

"As a result, smaller road freight transport operators are likely to follow the lead of global road freight giants in the latter part of the next five-year period, and incorporate electric vehicles into their fleets.

"This is anticipated to contribute to industry revenue growth over the next decade, as consumers demand greener delivery methods in urban areas."

 

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