Smart Freight Conversations
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Smart Freight Conversations
Episode 35 | The Catalyst Series: What BloombergNEF's Data Says About Electric Trucking's Momentum
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The data on electric trucks might surprise you.
In the latest episode of Smart Freight Conversations: The Catalyst Series, Andy Golding sits down with Colin McKerracher, Head of Clean Transport at BloombergNEF, to unpack what 20 years of energy transition data reveal about freight electrification.
Some numbers worth knowing:
- Electrified transport is now the single largest category of global energy transition investment, ahead of wind and solar
- Medium- and heavy-duty electric truck sales are already approaching 25% in China
- The technology debate is settled: hydrogen isn't scaling for trucking, batteries have won
Despite policy rollbacks and geopolitical uncertainty, Colin says he's never been more optimistic about the pace of change. His reasoning: progress isn't automatic – it's built decision by decision, company by company.
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Hello and welcome to another episode of Smart Freight Conversations, where we share interesting and important updates about freight decarbonization and the drive towards a zero emissions logistics industry. I'm Andy Golding, Director of Strategic Services here at Smart Freight Center, and I'm your host for today. Today's episode is an interesting one and something slightly different from maybe our usual guest in the studio. Today we're going to be talking about all of the market developments around electric trucks because I have the numbers guy, the stats guy. I have Colin McCarricker, the head of clean transport from Bloomberg NEF, on the couch today. Colin, it is really cool to have you here.
SPEAKER_01Yeah, great to be here. Thanks, Andy.
SPEAKER_00Thank you. And maybe you can kick us off by just telling us a little bit about your role at Bloomberg and what does it mean to be the head of clean transport at Bloomberg NEF?
SPEAKER_01Yeah, for sure. So Bloomberg NEF is the energy transition data and analysis group within the broader Bloomberg organization. So we essentially provide data tools and analysis about everything to do with the energy transition, whether that's renewables, clean fuels, electrification and batteries, all these different areas. So my team looks at everything around the decarbonization of the transport sector, as well as around energy storage. So we're looking, where we gather a lot of data, we build a lot of tools, and we provide market intelligence around what's going on on all of these topics around the world. So that could be everything from two and three wheelers in Southeast Asia going electric all the way through to big rigs being deployed in Norway. So we're very much the industry consultants providing data and analysis on those trends.
SPEAKER_00And I suppose that because you are the industry consultants providing all of the data and analysis on these trends, you must have a really, really interesting perspective on the shift, the shift towards electric vehicles, the drive towards electrification and what's actually happening in the market. So maybe you could share a little bit about the bigger picture of what's actually happening in road transportation.
SPEAKER_01Yeah, for sure. And and I will say this year actually for me marks 20 years of working on the energy transition. I started out working in biofuels, then a little bit on smart grid and demand side management. And then the last 10 years working just around clean transport within Bloomberg NAF. And I will just say I've never been as optimistic as I am right now about how quickly some of this stuff can go. There's an overall mood of pessimism right now, I would say, but partially because of some policy rollbacks in the US and just generally this view that maybe the road to net zero is going to be bumpier and longer, longer than some people thought. But if I look at it purely from a technology point of view, the enabling technology to deliver many of these changes that we talk about around low-carbon freight, zero emissions of vehicles on the road, we're in a better place than we've ever been right now. The technology is cheaper and better on the battery side. There's more and more charging infrastructure being built. And you can really see the sales numbers starting to rise around electric vehicles around the world. So it's not just about trucks. If we go around the sort of story of different parts of road transport, the two segments that have gone the fastest are actually two and three-wheeled vehicles and buses. About 40% of those sales, new vehicle sales in those categories, are already electric globally. 40%. Really led out of Asia and Europe. Then we come to passenger cars, which is what everyone often thinks about. About 25% of global sales last year, one in four cars sold last year came with a plug globally. Huge variation across the regions, but still, one in four cars sold last year had a plug. About 6% of the cars on the road in the world, of the 1.3 billion cars on the road in the world are electric today. And then lastly, coming to vans and trucks. When it comes to light duty vans, about 10% of total sales globally last year were electric. When it comes to medium and heavy duty, about 5%. So that's clearly the segment where there's the most work to do. But this electrification trend is really gaining steam across all these different areas of road transport. So that's where my optimism comes from, this sort of momentum, plus the underlying technology getting better and better.
SPEAKER_00As somebody who's been in this industry for 20 years, for you to sit there and say that you're you've never been as optimistic as you are now. I think it's really nice for me to hear that. And I've no doubt that for the listeners, that's nice to hear as well. Because there can be an under there is an underlying sense of pessimism at the moment. There's a lot going on, a lot going on in the world. We have the drama in the Strait of Hormuz, we have a lot of war, a lot of uncertainty, a lot of geop geopolitical stuff happening. And so for you to sit here as the guy who looks at the numbers every day and say, nope, I'm optimistic. This is cool. We got this, and that there is change happening, and you can see that change happening.
SPEAKER_01And it's not to say there aren't challenges. Like you can have an optimistic view while still recognizing there's a lot of work to do and that we all have agency in making it go faster. And we tend to work with the groups who are wanting to make things go faster, wanting to get things done, wanting to build new business opportunities around the low-carbon transition, around the energy transition. So we are sort of exposed to the coalition of the willing, if you will. But just to come back to the point you made there around uh the external conditions, right now we're in the middle of the second energy crisis within a five-year period within Europe. So if you're sitting in Europe right now, you've seen 2022 Russian gas gets cut off to Europe. Now 2026, um, crisis in the Middle East, spiking prices of fuel, uncertainty around how long that's going to last. The last time we had two back-to-back fuel crises, crises, was in the 70s. Um, and that led to pretty significant changes in the way we consume uh energy, both from an energy efficiency point of view, the sources of generation. So up until that point, you used to see a lot of oil in the generation mix. You don't see that anymore. It's it's pretty much out of the generation mix in most Western countries and most of the world. And then you also saw a bigger push for efficiency on the vehicle side that came out of that period. It's too early to say if this similar period right now of dual energy crises leads to the same effect. We won't know until it's 10 years in the rearview mirror. But certainly if we think of this idea of an energy trilemma around security of supply, cost competitiveness, and green, sort of clean sustainability as these three pillars of a trilemma, those are all sort of pulling in the same direction right now. You don't want to be dependent on the Middle East because of that volatility. Um there's a security element, there's a cost element because that's gone up a lot, the price of the alternatives in terms of diesel or jet fuel. Um, and the sustainability part is enabled by the technology being further along than it's been anywhere in the past. So we'll see. Maybe we have to have this conversation again in five years, but I also think the external things that are going on in the market are pushing more towards the solutions that we've been talking about for quite a while, and that geopolitics is going to be a tailwind rather than an inhibitor of many of these things in the next five years.
SPEAKER_00I mean, they do say never let a good crisis go to waste. Indeed. So I have to hope that you're right. And I do hope that when we look back at what's going on at the moment in terms of these back-to-back crises, that we do see that it has actually accelerated us forward significantly and valuably. But we also can't afford to wait. We know that we do need to transition now and we need action now. And I would love to know from your perspective what are some of what you're seeing and some of the learnings that you're seeing across the market as the world does move in the direction of freight decarbonization, but admittedly needs to move faster.
SPEAKER_01Yeah, so I think one of the things that we've seen quite clearly over the last little while is that I'll give you two concrete things. One of them is that three years ago, everyone was talking about technology neutrality, and maybe it's hydrogen, maybe it's electric for freight. We were crunching the numbers saying, no, it's gonna be it's gonna be electric, it's gonna be cheaper, hydrogen's gonna be more expensive than than people think, specifically, green hydrogen is gonna be more expensive than people think. That's largely what's played out. Pretty much all of the deployments of zero emissions trucks right now are electric trucks. Hydrogen is almost nowhere in the mix. It won't be a significant part of the mix between now and 2030. I don't personally think it'll be much of in a big part of the mix between now and 2035. So that's one thing is the the sort of technology solution set has narrowed and consolidated around one technology, which is electrification. There may still be some role for hydrogen, but it's going to be small, it's gonna be niche, it's gonna be in certain applications where electrification is really hard. So the industry has sort of consolidated around batteries as the main way to do this. So that's that's one big development that that's happening. The other one is that we've seen a few markets really go after the segments where they can make electrification work right now. So I'll give you the example of China. Already in China you're getting to about 25% of medium and heavy duty truck sales coming in electric in the in the towards the end of 2025. And really what that was driven by was identifying where can this work today. So, really, all the closed industrial sites, so things like port facilities, mines, logistics, um, steel plants, anything where there's a big sprawling facility, a lot of stuff moving around, but in a relatively predictable way, and sort of within a gated community where you can build the infrastructure, you can rearrange the logistics, you can do all those sorts of things, getting really tremendous growth. So you saw that really take off in China. I actually don't think we're that far away from seeing much higher levels of growth in those segments as well in Europe and North America. So that's also what I would say that's different again from a few years ago, is that we have more proof points as to where this can work and we have a better understanding of what segments to go after first. Technology diffusion never happens with the hardest things first, it always happens with the easiest things first, then the technology gets better, and the niches that that technology can address grow over time as the technology improves. So that's really what we're seeing on zero emissions trucking as well, is that more and more of these niches become viable. Um, there's learnings that get shared around, um, and that can help the market grow.
SPEAKER_00And as you say, I hope that as we see more of these niches crop up, it becomes a little bit less niche and a little bit more mainstream, and the learnings become a little bit more public and the actions, the barriers to action become a little bit lower, and then that's how we start to really move the market and drive scale.
SPEAKER_01Yeah, definitely. And and just to take it back to the numbers again, as you pointed out, we're the numbers, I'm the numbers guy. We track total investment in the energy transition around the world. Electrified transport is now the biggest category of investment. It's ahead of clean power, so it's ahead of wind and solar and all these other things. The biggest bucket of spending on the energy transition and investment is around electrified transport. And within that, the fastest growing part is actually commercial transport. So whether that's starting to see more charging infrastructure getting built, megawatt scale chargers coming in, um, more trucks being purchased. As I said, we're getting that sort of five to 10%, depending on whether you're talking about heavy trucks or um light commercial vehicles, five to 10% of sales. That's a material difference from where we were just a few years ago. So the fastest growing part of the largest segment of total energy transition spending is commercial transport. So it's not something that is happening in the future, it is something that's happening now. It's interesting when I talk to some climate scientists, they often say we're past the point where this stuff is theoretical. This stuff is happening now. You can sort of feel it. And I think that's very true. You can also feel the solution starting to come in as well. So at least there's some something tempering that story as well in a positive light.
SPEAKER_00And I think your message is such an important one because it can also be very easy to sit in the logistics sector and feel like we're not doing enough, we're not moving fast enough, we're not accelerating change enough, but the numbers seem to tell a different story. And I think that's a really important message that it is happening. And this was never going to be a change where we click our fingers and suddenly it's fixed. This was always going to be a long-term transition. But I think I understand a little bit about why you're so optimistic.
SPEAKER_01Yeah, and I I mean, I applaud everyone who's working on all these things too. There's also a tendency amongst people who work with the data to think things are inevitable, right? And and just to sort of say, look, the line goes up, the curve goes up, and and we don't have to do anything. The reason the curve is the line is going up and the curve bends in that direction is because a lot of people are pushing their organizations, are advocating for change, and are working out all the small details. So when you look at a smooth curve, when you zoom in on it enough, eventually it's a series of small step functions. And each one of those step functions is a company or an organization making a decision. So the fact that we've gone to here is due to hard work. The fact that we get to the next stage will also be due to hard work. So there isn't a technology inevitability. There's technology tailwinds, but there's still people making it work in each stage of this transition that we're going through. And some of these problems are hard. I mean, I mean, you we talk to people who are working around decarbonizing a complex fleet operation. It's not a one-to-one swap between an electric truck and a diesel truck. They're looking at how do you sort of put a financing package around something that is essentially a systems change that brings in charging infrastructure, that brings in insurance, that brings in the cost of electrons, that brings in the trucks themselves. And that's just a very different proposition than it is swapping out one truck for another. So all of these things are still hard, but you can and you can feel that viscerally when you talk to people who are frustrated and working on things, but you can also feel that progress is being made. And I'm very confident that if we come back in a few years, um there will be even more proof points and those lines will continue to have headed up due to that uh hard work from many people involved in the sector.
SPEAKER_00Thank you. And I think that that is that's a great place to to wrap this episode. This is people doing the thing, it's people doing the work, it's people driving the change. Colin, thank you so much for joining me on the couch for today's episode of Smart Freight Conversations. I've really enjoyed this conversation. It's nice to get the numbers perspective to show that we are moving the needle, even if it might feel slower than we like.
SPEAKER_01Definitely. My pleasure, Andy. Great to speak to you today.
SPEAKER_00If you would like to accelerate your efforts in decarbonization and you're not quite sure where to start, head over to academy.smart freightcenter.org, where we have courses and a bunch of free educational resources to help you take your first steps in decarbonization. Thank you for listening to this episode of Smart Freight Conversations. Until next time.