2020 Pickup Electric Truck War Is Here

It’s hard to imagine a more quintessentially American vehicle than the pickup truck. But this age-old love affair is about to get a shock that could change that relationship forever. Outside of North America trucks with open pickup beds are generally considered utility vehicles for commercial use and don’t sell in particularly high volume but in the US they’re a practically acultural institution. Whether you drive America’s truck there’s one place you’ll want to be. Pickup trucks have been kind of the centerpiece for much of the US auto market for 60 or 70 years really.

Certainly since World War II if not earlier. They represent the highest volume vehicles in the US and they represent the highest profit vehicles in the US. Had one since I was in my twenties couldn’t function doing what I’m doing without one. This is probably the fourth or fifth track. I’ve had the same model of the truck since I was seventeen, and I’m now 52. For work, this one fits my purposes perfectly.

The numbers are staggering; nearly one in five vehicles sold in the US are pickup trucks. And in April 2020 for the first time, ever pickup trucks outsold passenger cars, which have been on a steady decline for years. With reliable sales and healthy profit margins, you would expect manufacturers to not mess with a proven formula. Because the manufacturers have this big question that they’re always fighting with. How many of our resources do we apply to our current business models that make money for us right now? And how much of our resources do we allot for longer-term future investment? The interest in electric trucks has been building for a while in the background, but as we all know when Elon Musk makes a splash everyone kind of watches.

Tesla essentially threw the first pitch. In a game that few people outside of the auto industry even knew was being played. And as of mid-2020, no fewer than seven models by seven different manufacturers are currently in development supported by an astounding amount of marketing hype for a category that has yet to deliver a single vehicle to market. Seein’ the world mot as it is, but how it could be. That is how you change the world. What makes this race especially exciting is that it isn’t just a battle between the major well-heeled industry players but also a lineup of young companies that resemble Silicon Valley startups complete with flashy names and headline-grabbing CEOs. Tesla has proven that it’s possible to come out of nowhere as an automaker and become a real player and a real force in the industry. And I think every one of them is hoping to be the Tesla of trucks, including Tesla. I think a lot of these startups are feeling like we don’t need to steal 50% of the F-150’s market share.

If we can steal four percent of the F-150’s market share, we’re going to sell a lot of trucks. While early adopters may be enticed by new tech or environmental impact, the electric pickup’s fate will come down to convincing loyal customers that it’s demonstrably better for the same or less cost. And that’s where the innovation race comes in. I saw that a model Tgot 24 miles per gallon. The average car still gets about 24 miles per gallon. Physics of that recipe of pistons going up and down and routing power, you can’t get past.

So the only way to have a quantum leap is to reinvent it. A typical fraternal combustion engine vehicle will have north of 2,000 moving parts. Every moving part is a loss of efficiency. That’s what’s really different about our pickup truck. It only has four moving parts. The wheels. There is nothing simpler than a motor in each wheel and a computer watching that motor very precisely. After 95 years pick-up trucks get about15 miles per gallon. We’ve invented a pickup truck that gets equivalent of 75 miles per gallon. Fivefold it’s efficient. Comparing gas to electric, one of the first things that you notice immediately is the delivery of torque and how much tool there is, in an electric vehicle. There’s zero lag.

So as soon as you step on the throttle, you’re getting instant torque. And that’s great for the type of usability that you want in a pickup when you’re rock crawling or off-roading or even just normal driving situations. It gives you a lot of confidence and it’s really enjoyable to drive. Every night when you go home, you can plug it in just like you plug in your phone and it’s ready to go to the next day, fully charged, ready to roll. But still floating around are concerns that have been part of the EV debate all along, particularly around range anxiety. With electric trucks, the range can vary widely on the carrying or towing load, reducing it by up to 50% in some cases. And the notion of freedom that is heavily baked into American truck marketing is limited by rapid charging infrastructure, which is still far from widespread, especially in rural areas where pickup trucks are common. And then there’s another factor.

You personally, would you be able to switch to an electric truck? Hard to say. It kinda all depends on how expensive they are. I would if it was cost-effective. So how much do these trucks cost? Well, according to what’s been announced so far there’s a pretty wide range from around $40,000 in the low end to well over a hundred thousand dollars, and different models are clearly targeted toward different types of customers. Nonetheless, that range begins well above the cheapest gas-powered pickups in the market. Even when taking into account the current, various federal and state-level credits for electric vehicles.

The good news though, is that the core technology behind this segment, batteries, continues to get cheaper. Since 2010 battery prices have fallen 87%. That’s lithium-ion battery pack prices from 2010 to 2019. That’s a really, really sharp drop. And that’s starting to get you to the point where automakers can make and sell an EV for a reasonable profit margin. For most automakers, it’s still lower than the margins they make on their average internal combustion engine vehicles.

But it’s certainly getting closer as we saw with Tesla Model S, start at the high end and kind of work your way down. I think you’ll see something a bit similar with pickups is that some of these that come out are going to be targeted a little at the higher end for the first few years until those costs come down a little bit further. What’s fascinating about trucks is that in many ways they are perfect candidates for electric, electric drive trains. They’re larger. They have more space for the battery packs.

You can hide or integrate the additional cost of the EV components into its price easier than you can, say, a compact car. I think that all will help trucks potentially succeed if you can get the end-user to go for them. One thing that companies are succeeding at already is setting expectations high such as GM claiming a three-second zero to 60 times for its thousand plus horsepower Hummer EV or Nikola offering a 600 mile estimated maximum range on its hydrogen cell fuel equipped Badger. But delivering on the promises of these prototypes in a mass-production vehicle is a whole other challenge especially for the startups. They don’t have to just make trucks. They’ve got to get a supply chain going, distribution system, assembly, plants, everything.

So it’s relatively easy to produce a single or even a couple of concept vehicles that look really neat. Building high volume electric trucks at a high quality and distributing them throughout the country or throughout the world is a much bigger undertaking. Long term, they’re either gonna need a lot more money or they’re going to need to align with a traditional automaker. Some of the startups have already embraced the cliche, if you can’t beat them, join them. Usually in the form of a healthy contribution to their balance sheet. Michigan-based Rivian counts Ford among its family of investors with a legendary F-150 maker committing half a billion dollars so far. Meanwhile, business fleet focused Lordstown motors has made its relationship with a legacy brand a little more physical. GM was closing a plant here in Lordstown Ohio.

It made Chevy Cruises and we were able to purchase a plant, but most importantly, intact. So 2,000 robots four stamping presses, full paint booth, body shop, you know, everything. There’s a huge workforce around here. It’s great. Generations of the automotive makers. And we’re going to be here for a long time because this is the future. In addition to taking over a former GM plant, Lordstown recently announced that it will be going public in a deal that would net almost $700 million to fund operations. And one of its principal supporters, you probably guessed it, general motors.

The next few years are going to be particularly interesting to watch as the entangling industry alliances shake out while the different models make it to market, hopefully. But there’s more than just corporate profit riding on the promise of the electric pickup. Its success could be a major inflection point in the American adoption of electric vehicles. Historically, there’s been this incredible mismatch between what consumers are buying in North America, which is far more trucks and SUVs. And the segments that a lot of those EVs that we saw over the last10 years launched into, which were Sedans and often compact Sedans at that. So once there’s compelling pickup truck options I think they’re going to sell well. I’m actually pretty optimistic that that could change the game a little bit in the US in terms of EV adoption over the next five years. The market today, one is leaving the others behind. It’s really a cool thing to disrupt something that hasn’t changed, essentially, in 95 years. I think all pickup trucks are going to go electric. There’s no reason for them not to.

Disruption doesn’t usually happen overnight, but rather in fits and starts; and eventually, an idea that was once esoteric or whimsical or maybe even ridiculed becomes simply another reasonable option. And then one day you wake up and it’s the default. I think that’s what’s gonna be fascinating about the personal transportation space over the next 10, 15 years. We’re not going to see anyone dominant form of powering of power system for these vehicles. We’re going to see increased diversity in them. And I’ve always said there isn’t the silver bullet that’s gonna solve all our problems. There’s a bunch of copper bullets that add up to a silver bullet.

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