Orders for Volvo-manufactured electric trucks and construction equipment declined in the first quarter as the industry hesitates to adopt battery electric vehicles amid supply and infrastructure concerns.
Volvo-manufactured electric trucks, which include Renault trucks and Mack trucks, and construction equipment orders declined year over year, according to the company. Demand was down as customers continued to navigate macroeconomic uncertainties, including interest rates and infrastructure availability, Volvo Group Chief Executive Martin Lundstedt said during the company’s April 17 earnings call.
“When it comes to the electrification progress, underlying electric demand is slowing down somewhat,” he said. “In Quarter 1, booked orders were slightly lower compared to last year, but we regard this more as a blip on the curve.”
North American supply chain concerns in 2023 also contributed to a slowdown in electrification and an overall sense of hesitation, Lundstedt said.
“Lower order intake is partly also related to supply issues that we had during last year in North America that slowed down deliveries and built further the order book and order backlog,” he said. “It’s a little bit of hesitations when it comes to the order intake, but from a customer perspective, it is still the early adopters that drive the current demand and the current order intake.”
In Q1, Volvo Group reported:
- Volvo electric truck orders were 638 units, down 22.7% year over year;
- Electric truck deliveries were 907 units, up 32.8% YoY;
- Electric construction equipment orders totaled 199 units, down 23.2% YoY; and
- Electric construction equipment deliveries finished at 232 units, up 14.9%.
Customers evaluating options
As the charging-station infrastructure for battery electric vehicles continues to take shape, some customers and fleet managers are stepping back to evaluate the future of alternative fuels, Brian Antonellis, senior vice president of fleet operations at Fleet Advantage, told Equipment Finance News.
“Right now, we’re seeing the broader industry take a pause to determine how the electrified technology evolves, and also how the ongoing environmental mandates continue to take shape,” he said. “However, we are seeing more firms of all sizes show an increasing appetite to take a closer look at other alternate fuel options, particularly hydrogen fuel cell.”
One-third of respondents to a 2023 Fleet Advantage survey indicated more interest in electric vehicles as the preferred alternative fuel option over the next five to seven years, down compared with 65% in 2022, according to the annual poll. Meanwhile, 38.5% of respondents indicated hydrogen as the preferred alternative fuel source, up compared with 15% in 2022.
Increased interest in hydrogen fuel vehicles is due, in part, because it might be a better application in long-haul trucking, Mark Stone, corporate general manager at Vestal, N.Y.-based Burr Truck and Trailer Sales, told EFN., adding that the dealer continues to quote prices and arrange deals for Volvo’s VNRE electric truck.
“I’m confident that there will always be a place for [battery electric vehicles] in certain applications, but also know that in the long-haul sector trends seem to be in favor of hydrogen,” he said. “We have a long way to go in infrastructure to accomplish this problem in both [battery electric vehicles] and hydrogen.”
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