‘Being green’ is definitely the trending topic in the global auto market. Global automakers are doing their best to reduce carbon emissions, hence more developed eco-friendly cars every day. This trend is rapidly expanding to the commercial vehicle sector. This is because they always travel longer than private vehicles, and they stick to the designated routes; this led to the need for hydrogen trucks. As such, commercial vehicles are bound to change in the near future, using eco-friendly power sources.
In fact, news about future mobility and electric vehicles is mostly related to private vehicles; this is because most of the viewers are private vehicle consumers. However, commercial vehicles will play a substantial role in the evolution of mobility. This is because the transportation industry is quite interested in green commercial vehicles. Commercial vehicles will indeed be a threshold, guiding us to future mobility.
Consumers of private and commercial vehicles have different perspectives regarding future mobility. The private vehicle market is first created by the ‘early adopters’ who are curious and want to own it first; then the market expands as the vehicles are proven to be comfortable or convenient, with fuel efficiency and eco-friendliness. Electric vehicles and self-driving technologies, from this perspective, do not have a significant impact on our life. For average consumers, these new technologies are just ‘cool things to have’.
But the story gets different when it comes to commercial vehicles. This is because the various benefits coming from eco-friendly commercial vehicles will directly lead to the profit of the logistics and transportation companies, who are major consumers of commercial vehicles. For instance, in the future, operating eco-friendly commercial vehicles could be a prerequisite for satisfying various laws. Eco-friendly commercial vehicles will be the key to the survival and competitiveness of the transportation business.
Think about a fixed-route city bus that goes around the same, short route over and over. Strict environmental laws being implemented in the city will be the most specific motivation for purchasing eco-friendly vehicles for service providers. Korea has already had its city bus engines replaced diesel with LPG due to a special law on improving the air quality in the Seoul metropolitan area. The electric buses will sharply increase if the law requires all the city buses to be emission-free within a certain amount of period, or all the services providers to operate green buses with zero-emission.
In addition, unlike private vehicles, commercial vehicles are developed to carry out each special purpose; and this makes it easier for commercial vehicles to adopt eco-friendly technologies. Most of the private vehicles are developed to cover for various kinds of customers with different tastes, except for specialized vehicles such as sports cars or SUVs for off-road. Such a broad customer base could mean a bigger market, but it can also mean a harsh environment for such eco-friendly vehicles to survive, which people do not really know about. It is always never easy to develop a model that everyone would want, and consumers may also feel unfamiliar with unknown technologies.
On the other hand, the demands of commercial vehicle consumers are clear. For example, customers of short-haul delivery trucks that operate only in the city and those of superior express buses that run from Seoul to Busan have completely different needs. In other words, it is easier to design and form a market if you specifically understand the needs of consumers.
One characteristic of eco-friendly commercial vehicles is that they optimize their sales strategy. At the Busworld 2019 held in Brussels, Belgium, a total consulting service was introduced to suggest when, how many, and which exact model should the service providers be buying. The consulting service also included the types and quantities of eco-friendly commercial vehicles that should be introduced immediately, as well as vehicle chargers or hydrogen charging stations needed for efficient operation. It even provided an overall solution package, including electrical lines, hydrogen suppliers, and qualifications for necessary permits and operating staff.
Eco-friendly commercial vehicles allow consumers to accurately calculate initial investment costs, and to predict sales and profitability quite accurately. In addition, such total consulting services help maintain a long-lasting relationship with customers.
These days, most EVs feature a range of more than 400 kilometers on a single charge. In fact, it is rare to drive more than 400 kilometers at a time, but this is because of the anxiety that consumers have. Therefore, EVs had no choice but to improve battery capacity, and the price of vehicles also went up. However, when it comes to vehicles that consistently travel around just 200 kilometers a day, like urban delivery trucks, can lower the price with smaller batteries. Such electric trucks also feature lower operation costs. The reason why the Hyundai Porter 2 Electric became so popular is that it provided the right performance that the target customers wanted.
Then what would be the right power source for eco-friendly commercial vehicles? Although many people see electric vehicles (BEVs) and hydrogen fuel cell vehicles (FCEVs) are competing with each other, it would be right to say that they can cover for each other. When driving in urban areas or short distances, BEVs would be more attractive since it is easy to charge them at home. For long-distance trucks, however, FCEVs are more suitable because of the battery’s heavyweight and expensive cost. An increase in body weight reduces the available cargo capacity, which would reduce profitability. In addition, FCEVs can achieve economies of scale by installing large-scale hydrogen charging stations in certain locations, such as cargo terminals.
This year, Hyundai exported its fuel cell truck XCIENT, the world’s first mass-produced hydrogen fuel cell truck, to Switzerland. This symbolizes that Hyundai has become the pioneer in making large-size logistics vehicles implement fuel cells. In addition, Hyundai sought to change the vehicle sales structure through Xcient; the automaker has started to provide hydrogen-electric trucks in the form of a new concept hydrogen mobility service.
Hyundai formed Hyundai Hydrogen Mobility, a joint venture with Swiss company H2 Energy, which will lease the trucks to commercial truck operators on a pay-per-use basis, meaning there is no initial investment for the commercial fleet customers. This is part of the total solution for eco-friendly commercial vehicles. In addition, the company is going to expand the business throughout Europe and increase its annual supply to 25,000 in 2030.
Self-driving and connectivity are also very important factors in future mobility. These advanced technologies are also likely to lead directly to profitability when it comes to commercial vehicles. In Europe and the U.S., where the second driver and a certain amount of rest are mandatory, autonomous driving technologies can reduce such labor costs. Furthermore, this will reduce the chance of accidents, which usually lead to the loss of manpower and equipment, and improve service quality.
As such, commercial vehicles are likely to be a key element that could bring the era of future mobility. Especially, it would be interesting to pay attention to innovative commercial vehicles while new technologies are created every day. Future commercial vehicles are rapidly developing based on sophisticated and accurate plans. Commercial vehicles with eco-friendly energy sources and advanced technologies will be the next future mobility.
Words. Stefan YoonSuk Rah
He was a brand manager at Audi, product marketing manager at Volkswagen Korea, manager at Volkswagen Headquarter, and general director at Ferrari. He currently works as a freelance auto columnist and consultant, imparting extensive knowledge of cars to people.
◆ The views and opinions expressed in this article are those of the author and do not necessarily reflect the official opinion of the HMG Journal.