TOKYO — Isuzu Motors and Hino Motors are making forays into no-emission light trucks next year as Japan trails other major automobile markets in embracing electrified fleets.
The Japanese commercial vehicle producers are eyeing business with shipping and logistics companies while fighting the growing presence of Chinese rivals, which offer competitive prices.
Hino intends to roll out the Dutro Z EV truck in early summer 2022, with Isuzu planning to release an electric version of its Elf truck next year after testing. They are following in the footsteps of compatriot Mitsubishi Fuso Truck and Bus, which debuted the eCanter in 2017. These electric-powered trucks are all light-duty with a capacity of 2 tons to 4 tons.
Hino and Isuzu are in a new partnership with Toyota Motor to develop electric and other new technologies for commercial vehicles. Suzuki Motor and Daihatsu Motor joined the Toyota-led alliance this month to accelerate the EV push in Japan.
Hino, the truck arm of the Toyota group, already has developed a light-duty model with a range of just around 100 km. This low-floor vehicle offers a user-friendly option for delivery drivers and is designed for last-mile logistics, President Satoshi Ogiso said.
Isuzu and Hino had been hesitant about building all-electric trucks, given the high hurdles.
“Batteries are costly, so it’s difficult to keep prices down,” said an executive at a commercial vehicle maker.
Batteries are said to account for 30% to 50% of the cost of an entire electric vehicle. Trucks require many batteries to withstand heavy cargo and long commercial traveling.
An electric truck from a Japanese manufacturer will cost roughly twice as much as a conventional model, so it is virtually impossible for trucking companies to deploy no-emission fleets without subsidies, said a spokesperson at the Japan Trucking Association.
Charging poses a challenge as well. Limited infrastructure means a longer charge time would hurt fleet utilization. For Mitsubishi Fuso’s eCanter, quick charging takes no more than 90 minutes, but drivers need 11 hours for normal charging.
Foton Motor electric trucks sold in Thailand with CP Group. Competitive pricing gives Chinese truck makers a big advantage. (Photo by Marimi Kishimoto) The truck industry faces calls for decarbonization. Trucks and other cargo vehicles accounted for 36.8% of carbon dioxide emissions by the transportation sector in fiscal 2019, while passenger cars produced 45.9%, according to the Japanese government.
It is essential to study green technologies including all-electric vehicles and gas-electric hybrids to find the most effective option for cutting emissions over the entire life cycle of a vehicle. But the push for electric vehicles is accelerating.
The European Union in July proposed a virtual ban on the sale of new passenger cars and small commercial vehicles with internal combustion engines, including hybrids, by 2035. Heavy-duty trucks must slash greenhouse gas emissions by 30% between 2019 and 2030. The U.S. state of California also requires a shift to zero-emission trucks by 2045.
The stronger rules have sparked a race by European automakers to achieve electrification. Daimler rolled out the heavy-duty eActros in 2018. Volvo aims for electrics to produce half of its European truck sales by 2030, while Volkswagen Group member Scania sees electrics covering half of all its sales by that date.
Electrification of larger, long-haul trucks looks to be more challenging than for their smaller counterparts. The drive system for big internal combustion trucks will cost 88,000 euros ($104,000) in 2030, while the figure will be 154,000 euros for electric versions, consulting giant PwC’s Strategy& predicts.
Japan unveiled a target in June, looking to have all trucks with a capacity of up to 80,000 tons go electric by 2040. A policy for larger trucks will be set by 2030.
Truck regulations have lagged rules for passenger cars, and Japanese automakers have been slow to respond, said Shinya Naruse of Okasan Securities. But their customers have quickly embraced greener transportation options. Meeting their needs are Chinese players and new entrants.
SG Holdings, the parent of Japanese logistics giant Sagawa Express, has ordered a fleet of 7,200 light electric trucks from China’s Guangxi Automobile Group, which is expected to deliver them in September 2022. The price is expected to be less than the 1.3 million yen ($11,820) to 1.5 million yen for currently available trucks. Such competitive pricing gives Chinese companies a huge advantage over Japanese rivals.
Tokyo-based HW Electro in July debuted a light electric truck, based on a Chinese-made vehicle, at the price range of 2 million yen to 3 million yen. Japan is slow to electrify commercial vehicles, but customer needs are strong, CEO Hsiao Weicheng said.
Chinese and new entrants have the best shot by focusing on a special segment, such as delivery trucks.
Sanshiro Fukao at Itochu Research Institute expects the market to see emerging companies, saying that they are capable of attending swiftly to customer needs.