US-based automaker Tesla has unveiled its new “Beast” semi truck, targeting the diesel-intensive heavy duty road freight market.

This release creates much optimism for electric vehicle (EV) adoption, but displacing oil in long-haul trucking has the most daunting cost and technological challenges of all segments, said British multinational bank and financial services company Barclays in its Oil Special Report.

Due to weight and range constraints, EVs will likely enter the light/medium weight and urban/regional markets first, and the heavy, long-haul sector (including semi trucks) last.

Freight-related transport demand accounts for almost a fifth of global oil demand, and semi trucks account for just under half of this. In other words, the opportunity to displace oil demand in the road freight sector appears far greater than that of just semi trucks, which accounted for 7 million barrels per day (mb/d) of demand in 2016.

Economics could accelerate the adoption of EVs in the freight sector, said Barclays. Fleet managers consider the economic trade-off more purely than consumers, and the freight fleet turns over more quickly.

Policymakers could accelerate adoption of EV in the freight sector as they target GHGs even faster than for personal vehicle use. Heavy duty vehicles account for a disproportionate share of GHG emissions and transport-related oil demand. Regulations targeting this segment could encourage accelerated adoption even if the economics do not align.

Other policy and technological developments will reduce oil demand by greater magnitudes in the next decade than EV long-haul trucks. The rate of fuel efficiency gains and the adoption of other fuel-saving technologies, which do not receive as much publicity as EVs, will do more to shift the oil demand landscape between now and 2025. – TradeArabia News Service