CEOInterviews.AIAndreas Gorbach from Daimler Truck: Infrastructure remains the bottleneck

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Interviewer0:04

Hi, I'm here at the IAA Transportation in Hanover and with me is Andreas Gorbach, CTO of Daimler Truck. Andreas, this beauty behind you right here: two years ago at the IAA it was still a study, a prototype, and now it's standing here and the first units are going to be delivered to customers very soon. How rocky was the road to get this thing where it is now?

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Andreas Gorbach0:28

It was super rocky, I'd say it was a huge challenge and task. People have been working day and night to make this happen, and no surprise. I think decarbonization of mobility, if you choose the biggest task in that space, long-haul trucking is where you want to look. So I think that's the biggest challenge in decarbonization, and now it's ready.

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Interviewer0:51

Okay, now it's ready. It's 621 kilowatt hours, 500 kilometers of range. That is for long-haul trucking. And now your competitors say Volvo, for example, is now presenting a truck with 600 kilometers range. There are competitors from China that are presenting trucks with even more range. Will it be just like with cars where the idea is to top the range, to always go further and further, or in the trucking industry is there a sort of sweet spot where you say, 'Okay, well that's as far as you have to go and everything else is just unnecessary'?

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Andreas Gorbach1:30

Yeah, I'd say clearly no and yes to the sweet spot. No to the 'hey let's go for unlimited miles with batteries.' It's always important to look at the range and compare it to the installed kilowatt-hour battery capacity. We have now 600 kilowatt hours installed for a 500-kilometer range. I think the truck can go even longer than the 500 kilometers, and that gives you the efficiency. Now obviously you could double the installed battery capacity and have double range, yet then the amount of weight and cost you add to the truck comes to a point where it's not the best for the transportation task for the customer. So there is a sweet spot, and we do think that this beauty behind me is right in the sweet spot.

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Interviewer2:18

Okay well let's stick with what you just said, you know, add the weight. Tesla is presenting its Semi here at the IAA, kind of setting new standards in terms of weight. And like I said, there are competitors from China that are also presenting new trucks. Is that a competition that you really have to fear, that you have to look out for?

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Andreas Gorbach2:39

No, we don't fear the competition, but we take them very seriously. I mean, trucking has been a very competitive field since ever, so we always take competitors very seriously. Yet we don't fear anything, especially when it comes to weight and range and efficiency.

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Interviewer2:58

Okay, weight and range and efficiency. Another big topic for you guys is the battery and the development of the battery. Where are you on that? Where do you want to go with that? Or is it ultimately just a question of charging?

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Andreas Gorbach3:12

Yeah, the first step that we did with battery the last years was focus on rapid fast-to-market prototyping, having some vehicles generation one, generation two trucks. That was basically upscaling passenger car technologies. So in our case it was NMC pouch. With this truck here we introduce a really ruggedized platform and that's based on LFP prismatic cells. And I think the next 10 years this is the way to go. So the other trucks will also all have LFP cells. I don't know that, but if you look at Daimler Truck it's a clear yes.

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Interviewer3:48

Okay well, let's talk about charging. So first customers using electric trucks long-haul or short-haul are using CCS to charge their trucks at the depot, or as you showed it can also be done on the road. Well, is the topic of megawatt charging actually important or is it always going to stay a niche?

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Andreas Gorbach4:12

Well, there are today around about six million trucks on the road while we talk here in Europe. They burn 60 million tons of diesel every year. That's round about 700 terawatt hours of energy. So if you double the efficiency, 350 terawatt hours. That's the infrastructure challenge. All to get 350 terawatt hours with cables and trucks without megacharging it's not going to happen. So I think it's complementary. You need the depot chargers, but you also need the megawatt chargers for long-haul trucking. And you need hydrogen in the game, but that's a completely different question of feel.

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Interviewer4:52

That is indeed a different question of feel. But maybe you can talk about that a little bit more with my next question. Because it would be: you already have the eActros 300, 400, now the 600. You're also introducing the eEconic. Where are you going in terms of scaling your product portfolio in terms of electric trucks or hydrogen trucks and lowering prices?

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Andreas Gorbach5:16

Definitely, yeah. We're basically now completing our portfolio step by step. We have 10 trucks in series production already. That goes from the school bus to the city bus to the Fuso Canter up to the long-haul truck. And we will complete the portfolio step by step, and at the end of the decade also start adding hydrogen to the game.

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Interviewer5:42

Okay well, last question I promise. In terms of funding and subsidies: freight companies, logistic companies are all saying, 'Okay well we need subsidies.' They don't get subsidies for electric trucks in a lot of countries, but they do still need to lower their CO2 emissions. Will you be able to sell as many electric trucks, maybe for a lower price, or is transport going to become more expensive?

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Andreas Gorbach6:11

Yeah, there are three important factors that need to be multiplied and the result is the decarbonization speed. Factor one is the product, and I think the products are there from us, from the competition as well. The second factor is TCO, the economics for the customer. Borderline today with subsidies, yes. In some cases with the German toll system you are on par already, but tricky here and there without subsidies. And the third factor in the equation is infrastructure. We do see infrastructure at the moment is the bottleneck of decarbonization, not so much the economics. Yeah, the subsidies could help catalyzing this, but as long as the infrastructure is not there, even this catalyst is not sufficient.

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Interviewer7:01

Andreas, thank you very much. And I guess we all see each other in two years at the next IAA Transportation. We'll see what truck will be standing behind us then. Thank you very much for the interview.

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Andreas Gorbach7:09

Thank you, looking forward to seeing you in two years.