OEMs, Startups Compete for the Future of Electric Vehicles

Thor Truck
The Thor ET-One is a fully electric, Class 8 tractor. (Thor Trucks)

Well-known manufacturers as well as newcomers to the industry are advancing electric trucks, and both sectors will play important roles in the vehicles’ future, industry experts said.

Andrew Cullen, senior vice president of fuels and facility services for Penske Truck Leasing, said that while the major OEMs have more scale and capability than startups, the industry needs those newcomers to create technology and push the envelope. From a practical standpoint, “you would tend to think companies that want to grow their business would want to partner with an established company that does this for a living, but I think there is a place for the startups out there,” he said.

“I wouldn’t be surprised if there aren’t large OEMs watching the startups,” Cullen added. “That is the exciting part of this time.”

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Thor Trucks, a Los Angeles-based electric-truck startup, plans to partner with existing automakers to produce its vehicles, rather than working to raise hundreds of millions of dollars to build a factory. “That could mean partnerships with suppliers, other manufacturers, fleet management, maintenance and support, charging and others,” said Giordano Sordoni, the company’s co-founder and chief operating officer, adding that leveraging partners could help the company get to market quicker and give it flexibility in scaling up manufacturing.

Even so, breaking into the market with an EV propulsion system takes time, and customers need to build their trust before making large investments, said Darren Gosbee, vice president of powertrain and advanced technologies at Navistar Inc., parent of the International Truck brand. “Fleets will buy one or two vehicles, try them out and then build some trust and perhaps place an order of a magnitude more,” he said.

Gosbee added that he increasingly is seeing fleets approach OEMs with electric-vehicle discussions. “They’re starting to switch off the conversations with the startups and have conversations with the OEMs,” he said. If fleets want a quality product that is reliable, delivered consistently and under warranty, they will have to work with the OEMs to get that, Gosbee said.

Chris Nordh, senior director of advanced vehicle technology for Ryder System Inc., said fleet demand for electric vehicles is creating an opportunity for disruption, which Tesla has done. Tesla Inc. plans to roll out its electric truck in 2019. For its part, Ryder has partnered with Nikola Motor Co., a manufacturer of hydrogen-electric Class 8 tractors, to provide nationwide service for the trucks.

“I think that we have an opportunity to create another experience that is like the OEMs,” he said. “You’re getting what the traditional OEMs provide, which is a broad network of service capabilities and a large sales force.”

Gosbee noted, however, that OEMs must hit key benchmarks before committing significant resources to electric vehicles.

“For us to step up as an OEM, the business case needs to look significantly different than that of a startup,” he said. “We’re investing to produce thousands of units and we have to do the work to make sure it will meet customer expectations.”