Executive Summary: Investment and Strategy for Electrifying U.S. Medium and Heavy-Duty Vehicles

The U.S.’s transition to electric medium and heavy-duty (MDHD) vehicles presents monumental challenges and significant investment opportunities. To achieve complete electrification, an estimated investment of USD 620 billion will be required for charging infrastructure, which includes the cost of chargers, site infrastructure, and utility services. Specifically, local medium-duty vehicles will demand around USD 496 billion for on-site charging facilities. In contrast, heavy-duty vehicles necessitate a substantially higher average investment—approximately USD 145,000 per vehicle, compared to USD 54,000 for medium-duty vehicles.

Moreover, predominantly in Classes 7 and 8, high-mileage vehicles will require an additional USD 69 billion for a reliable local on-route charging network. However, the utilization risk associated with this infrastructure underscores the need for substantial government intervention and innovative business models to secure investments. For long-haul vehicles, a further USD 57 billion is essential to develop a sufficiently dense highway-charging network, with progress heavily reliant on the pace of transmission grid infrastructure buildout.

Regarding power generation and transmission, the projected demand from MDHD vehicle charging will increase. Nevertheless, power system operators are already planning significant generation and capacity expansions, which are projected to exceed the demand from MDHD charging by approximately tenfold. To specifically support local charging demand from MDHD vehicles, utility companies may need to invest about USD 370 billion in distribution grid upgrades and new constructions, a figure comparable to the total investment in the entire distribution grid over the past 15 years.

The findings advocate for a phased electrification strategy, starting with the medium-duty segment and gradually encompassing heavy-duty and long-haul segments as technological and infrastructural advancements materialize. Considering the substantial investments required, exploring alternative decarbonization pathways could offer more excellent value and flexibility than a strictly prescriptive approach to technology.

To meet ambitious electrification and decarbonization targets, fleets will likely need to adopt innovative operational and fleet management strategies to optimize both initial investments and long-term operational costs. Furthermore, if charging demands remain unmanaged, extensive investments will be necessary to upgrade distribution grids, potentially creating a bottleneck for fleet electrification and highlighting the importance of developing technological solutions and regulatory frameworks to assist fleets and utilities in managing charging demands efficiently.

Overall, these insights underscore the imperative for enhanced cross-industry collaboration to align strategies and ensure certainty for all stakeholders involved in the electrification of MDHD vehicles.