As diesel prices soar, so do electric truck sales

Truckers and delivery services whose vehicles depend on diesel fuel face a math problem right now. A gallon of diesel costs $6.32 on average right now, according to AAA.

That price tag hit a record high last month, and that cost creates an obvious issue — these drivers can’t just use less fuel. Unless they change the vehicles they drive.

California has committed $1 billion to electric truck rebates through 2030. And Tesla’s semitruck, which can travel up to 500 miles on one charge, just began mass production.

Meanwhile, FedEx has just ordered 2,000 all-electric trucks that should arrive by the end of next year.

Those vehicles come from Harbinger Motors, a company that makes electric versions of those box trucks that FedEx and UPS use. Ever since diesel prices started climbing, CEO John Harris said that the size of customers’ orders has been increasing.

“People that we were talking to about 100, now they want us to quote 500, now they want us to quote 1,000,” he said.

There’s not a lot of price transparency in this market, but electric trucks are generally more expensive than diesel versions — for the truck itself, as well as the charging infrastructure.

On the other hand, electrons right now are a lot cheaper than diesel. And trucking companies are noticing, said Elaine Buckberg, senior fellow at Harvard University’s Salata Institute.

“I think that's going to make them think a lot more about that trade-off between the upfront cost of the truck and the savings they'd get over the life of the truck,” Buckberg said.

The high cost of diesel comes at a good moment for electric trucking, according to Loren McDonald, chief analyst at Chargeonomics. New models can go farther on a charge, and states — including California — are offering incentives.

“That's why you've been seeing a lot of these big announcements, because the companies want to get in there and get those grants before they run out,” McDonald said.

The party could slow down if incentives run dry and diesel prices fall, but it could also keep going with more predictable financing from lenders, said Craig Segall, an advisor with the Federation of American Scientists.

“They haven't written a lot of these loans, so you don't know quite how much to charge,” Segall said. “You're getting a premium on your credit.”

As banks get more familiar with writing loans for electric trucks, Segall said, it could get a lot easier for trucking companies to switch.