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Battery electric vehicles to gain share as urban trucking grows, technology improves, IHS Markit report says. About two-thirds of commercial motor vehicles sold in the U.S. In 2040 will be powered by diesel fuel, down from 80 percent today, as growth in shorter-haul transportation increases demand for alternative powertrains for medium-duty and heavy-duty trucks, according to a study released yesterday by IHS Markit, a consultancy.

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Diesel or diesel-hybrid vehicles are expected to remain the dominant fuel type globally through 2040 due to increases in fuel economy which will play a major role in keeping diesel competitive versus, the study said. Range and load capacity requirements from long-haul, on-highway trucking will keep diesel relevant in the short- and long-term, while other propulsion types will grow in popularity as technology continues to advance, the study said. Still, the report forecast a 15 percent compound annual growth rate (CAGR) for battery electric vehicles in the U.S.

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During the 22-year timeframe as adoption rates increase in the medium-duty truck segment. This growth will come from an increase in urban trucking services—likely caused by an expected increase in e-commerce transactions--and advancements in battery technology allowing for more adoption by class 4 and 5 trucks such as parcel vans that have lighter payloads. The study also suggested that, in terms of total cost of truck ownership, battery electric vehicles will struggle against diesel and natural gas. Users of battery electric vehicles would have a difficult time justifying the cost of achieving the equivalent range of a diesel-powered truck because of the heavier battery pack weight that would be required, the study found.

In addition, the weight requirements of the battery pack cause limitations on the hauling capacity of the truck. Due to the initial cost disadvantage of alternative powertrains, larger truck fleets will be the first to adopt alternative powertrain technologies, the study forecast.

Larger fleets will have the capacity to implement a diversified fleet in a more strategic manner, allowing for alternative propulsion options to be implemented in areas that maximize their fuel saving benefits and minimize the 'range and payload penalty,' according to the authors. Want more articles like this? Sign up for a free subscription to Supply Chain Executive Insight, a monthly e-newsletter that provides insights and commentary on supply chain trends and developments.