Executives from Volvo and FedEx told the Edison Electric Institute last week they are fully committed to transitioning to electric trucks but need utilities’ help on rate structures and charging infrastructure.

For “what we do, which is last-mile delivery … electricity is the most efficient energy source for a vehicle fuel,” said Russell Musgrove, managing director of global vehicles for FedEx Express, which is adding 1,000 electric trucks in California.

“I know a couple years ago there were startups and other companies that predicted that electric trucks were going to be right around the corner, and then they … didn’t come through,” said Keith Brandis, vice president of partnerships and strategic solutions for Volvo Group, which will begin production of electric heavy-duty trucks in North America later this year. “If I could speak to your audience of CEOs, I’d like for them to know that the future is happening now.”

Patti Poppe, CEO of CMS Energy and Consumers Energy, moderated the discussion with Musgrove and Brandis during EEI’s Virtual Leadership Summit on Wednesday.

Based on current battery range and charging infrastructure, Volvo’s trucks will initially be used for local and regional deliveries. “We’re not talking a nationwide corridor yet. But it’s happening. And we’re saying: Now is the time for having these real plans for grid upgrades, for charging infrastructure.”

Production of Volvo’s VNR Electric trucks follows the company’s earlier forays into hybrid transit buses and medium-duty trucks. The company also is participating in the Low Impact Green Heavy Transport Solutions project, a collaboration among 15 public and private partners, including the ports of Long Beach and Los Angeles, to demonstrate the viability of all-electric freight hauling.

Brandis said the project is starting with 23 pilot trucks at four sites. “It includes everything in a complete ecosystem. So, we are able to go in and replace all of the propane forklifts with electric forklifts. We’re adding electric yard tractors as well as the Volvo heavy-duty battery electric trucks and tractors. We’re adding solar [generation] on some of the customer sites as well as all the charging infrastructure for these to run in daily operations. … We have two community colleges putting together technician training, because this is not the same as working on a diesel unit.”

FedEx Seeking ‘Scale’

Musgrove said FedEx, which has been investigating electricity as a vehicle fuel since 2010, now intends to electrify its fleet — more than 180,000 motorized vehicles — globally where it can.

In what Musgrove called its first “scaled project,” FedEx is purchasing 100 electric delivery vehicles from Chanje Energy and leasing 900 more through Ryder System for deployment in California. Chanje says its V8100 panel van, being produced in Hangzhou, China, can carry 2,000 pounds of payload for a range of 150 miles on a single charge.

FedEx must accelerate its transition, Musgrove said. “I don’t want to do 1,000 trucks a year. I can’t make real inroads into potential savings from a business perspective — and the environmental, carbon-neutrality goals we have as a company — unless we can truly get to scale. And to get to scale, we’re going to need everyone to build these ecosystems, aligning on what we can align on and finding workarounds on those things we can’t.”

After initially focusing on finding the right vehicle, Musgrove said he has shifted his attention to the charging infrastructure inside FedEx’s facilities. “The majority of our facilities are built in warehousing areas. … A lot of time, there’s just not enough energy [available for] putting 150 electric vehicles inside a building. So right now, we’re actually scaling down the number of electric vehicles in the facility until we can get the appropriate utility upgrades, or microgrids, to allow us to have an entire facility using electricity as a vehicle fuel.”

EV ‘Ecosystem’

Brandis said Volvo is listening to its customers to determine what they need from electric trucks and charging infrastructure.

“What we’re finding is that it’s not [enough] to put a bigger transformer on the site because you’re drawing more power. It’s how can you look at that entire site and optimize it based on the daily routines as trucks are ready to leave in the morning and come back in the evening; [it’s] the overall energy usage, and maybe energy offsets with solar or wind in order to look at the entire eco-cycle.”

Musgrove said truck manufacturers, fleet operators and utilities need to have a “true ecosystem discussion, where the stakeholders get in the room and people truly understand the customers’ need. Understand … that there are going to be some locations where we’re going to put in some microgrid technology, where we’re using solar. We’re going to have to use battery storage to … ensure we have the necessary energy to launch those vehicles every day.”

Utilities’ Role

Another challenge, Musgrove said, is dealing with the “very complicated” utility industry, with its variety of regulatory schemes and rate structures.

“Working with energy management companies and utilities is going to be the key globally for us to be able to make a meaningful transition between now and 2030 — 2025 even.”

While some utilities have been good partners, he said, others have a “take it or leave it” attitude that suggests they’re not interested in responding to the increased power demands that vehicle electrification will produce.

Brandis said fleet operators need utilities to designate a single account manager to help them navigate the transition and upgrade the infrastructure in their properties.

“We can’t have the typical, ‘Well you’re not talking to the right department. You’ve got to talk to another department.’”

Musgrove agreed, saying utilities should create dedicated fleet EV programs: “A group of people that understand our business, understand us as a customer … [and] help us get the information and do the things that you need us to do.”

FedEx also wants help from utilities in developing rate structures that “stabilize” its costs.

“Maybe some out-of-the-box thinking, where we talk about a fixed, contracted kilowatt rate including some of the infrastructure we need to put in there,” he said.

“I do think our willingness to work with others is essential to getting this ecosystem up and running,” agreed Poppe. “And there’s a huge … potential for our industry to have growth that we haven’t experienced in decades. It is an exciting time if we can all figure out how to swim together.”

Regulators’ Role

Musgrove said Volvo is lobbying California officials to revise a rule that prohibits public charging stations for heavy-duty trucks. “So, we’re going the California Public Utilities Commission to say, ‘Look this is not going to take off; this is not going to go anywhere, unless we [have private and] public charging stations.’”

Poppe said utilities will need their customers’ help also.

“There will be times when your voice in a regulatory proceeding … is very influential. Our regulators have to be objective, and they may not always do everything we say needs to be done. But when they hear a FedEx say, ‘This is what we need to be done,’ that can be very helpful in us advocating for the right policies.”