Daimler Truck CEO Martin Daum served a dose of a reality check on the global shift to electric vehicles, saying that the price to build one will “forever be higher” than its combustion engine component.
In an interview with the Financial Times, the firm’s chief explained how governments can step in to level the field and make it favorable for automakers to produce more electric vehicles. “Without any subsidies . . . the price of an [electric] truck will always, forever be higher than a [combustion engine] truck,” said Daum.
The truckmaker giant recently reported its fiscal year results, highlighting an annual revenue of €39.8 billion. It also said that it has tripled its deliveries of battery-powered trucks and buses to 712, although this is a small slice of the total annual vehicle deliveries of 455,000 dominated by gas-powered engines.
“If you take the entirety of engine, transmission, axle, tank system, cooling… we have a maximum of about €25,000. How much battery do you get for €25,000? Even if [battery costs fall to] €60 per kilowatt-hour, and I need 400 kilowatt-hours, then I need €24,000 alone for the battery cells.”
Daum reiterated this in the earnings call with shareholders saying that the tripled volume for electric trucks shows that there “is great momentum” and the major limiting factor now is not the vehicle.
“Our battery vehicles are in series production, meaning we can produce thousands of them. The limiting factors are the infrastructure and the framework for cost parity with conventional vehicles. All three factors need to be in place so that our customers can make zero-emission vehicles, the backbone of their fleets,” said Daum.
Nevertheless, the truck giant isn’t backing down on zero-emission vehicles. In the earnings call, Daum said the firm’s number one ambition “is to lead sustainable transportation.”
“[We are… developing battery electric as well as hydrogen-based vehicles, because we are certain our industry will need both technologies,” he added.
Daum’s comments come on the heels of rising prices for precious metals needed for producing electric vehicle batteries, forcing major EV makers like Tesla to hike their prices.
Information for this briefing was found via Financial Times and Seeking Alpha. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.