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Why GM’s zero-emissions pledge matters to trucking

General Motors’ commitment to zero-emission vehicles by 2035 will influence heavy-duty truck manufacturers and suppliers to follow along.

Just two days after taking a role in a four-way collaboration to make nonpolluting hydrogen-powered fuel cell International trucks for Navistar International Corp. (NYSE: NAV), GM said it is targeting 2040 to eliminate carbon dioxide pollution from its plants, supply chains and logistics globally.

“GM’s declaration does have an impact on fleet owners,” said Mike Ramsey, a Gartner Inc. vice president and automotive and smart mobility analyst. “Businesses that own and operate fleets may already have been considering [electric vehicles]. But now they have to make a plan for when they will switch.”

GM (NYSE: GM) is not the first automaker to adopt scientific findings on reducing planet-warming carbon emissions.

Daimler Trucks AG said in October 2019 that it was targeting 2039 aiming for carbon neutrality in its major markets. Daimler’s Portland, Oregon, manufacturing plant achieved carbon dioxide-free manufacturing in 2020. Others, including Volvo Cars, Ford Motor Co. (NYSE: F) and Volkswagen AG (VOW3.D.DX), have signed on to California’s effort to make all new cars emission free by 2035.

GM’s is committed to:

  • Achieve carbon neutrality by 2040 in its global products and operations.

  • Eliminate tailpipe emissions from new light-duty vehicles by 2035.

  • Be among 393 companies signing on to the Business Ambition Pledge for 1.5⁰C.

“The whole premise of the science-based targets initiative is that companies that participate are committing to actively reduce emissions, not just offset the emission push from somewhere else,” Sam Abuelsamid, principal analyst at Guidehouse Insights, told FreightWaves on Friday.

“It’s not just buying a bunch of carbon credits or committing to planting a million trees or anything like that,” he said. “It’s about actually changing the way they do business.”

Getting suppliers on board

As GM does that, its suppliers — many of whom also sell to heavy-duty truck makers — need to adjust.

“From our perspective we are already and have been focused on developing and offering technologies that are better for our customers, the environment and our communities,” said Katie Zarich, a spokeswoman for engine maker Cummins Inc. (NYSE: CMI).

The 102-year-old company, best known for diesel engines, is building out a New Power business unit focused on electrification, including the world’s-largest hydrogen-making electrolyzer for fuel cells.

“The logistics suppliers that work with GM and with its supply chain will have to reduce their emissions in order for GM to hit its overall target,” Abuelsamid said. “That will be an incentive for all of those suppliers to move toward using zero-emission vehicles as part of what they do.”

GM’s pivot

GM has effectively done an about face. After aligning itself with former President Donald Trump’s efforts to roll back vehicle emission standards in California, the automaker appears in lockstep with President Joe Biden’s climate change initiatives. That includes making 645,000 government vehicles run on electricity instead of gasoline and diesel.

GM began talking up electrification last spring when it revealed its Ultium battery technology. In November, GM boosted its five-year plan for electrification spending to $27 billion from $20 billion. Investors noticed. Shares closed above $50 for the first time on Jan. 14, two days after GM announced a new commercial electric delivery van business called BrightDrop.

In total, GM will offer 30 all-electric models globally by mid-decade. Forty percent of the company’s U.S. models offered will be battery electric vehicles by the end of 2025. China, which is GM’s largest market, requires most vehicles to be all-electric vehicles by 2035.

“Ford has already sent some early product signals ahead of GM,” said Bill VanAmburg, executive vice president of CalStart, a national nonprofit consortium focused on clean mobility. “But this shows where the full GM product line is going. It is not just a signal to other manufacturers but to the supply chain where the needed components come from.”

One supplier’s vision

Driveline and electric components maker Dana Inc. (NYSE: DAN) saw the electrification and zero-emissions trend coming.

“Dana recognized the need to invest in electrified technologies early and has positioned itself as the only supplier capable of providing complete, fully integrated e-Drive systems in-house across all mobility segments,” Ryan Laskey, senior vice president for Dana’s Commercial Vehicle Drive and Motion Systems business, told FreightWaves.

“The trends of electrification and sustainability have been rapidly gaining momentum across the mobility markets,” but especially in Class 5-6 trucks. Medium-duty models already show total cost of ownership (TCO) turning to favor electric powertrains,” Laskey said.

TCO rules

“I think there is already significant urgency just based on the interest in the work we’re doing right now,” said Kenny Vieth, senior analyst and president of ACT Research. “You’ve got the incumbents looking at a bunch of new little [manufacturers] coming into the market. And regulations going that way. It’s a place everybody has to be.”

The National Council for Freight Efficiency said earlier this month it will use commercially available battery-electric trucks for its bi-annual Run on Less demonstration program this fall.

But TCO still drives fleet managers.

“The important thing to keep front and center with electric vehicles is most are commercially operated to make money. So, there has to be some economic viability in making that purchase decision,” Vieth said. “You can’t separate a commercial vehicle purchase and TCO.”

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