Because of increasing limits on emissions and various restrictions and guidelines on the construction of trucks, the CV industry as a whole is heavily impacted by regulations . Not only that, but international, labor market, and infrastructure challenges are to be considered for sustainable and feasible change in the industry as a whole.
Emissions Standards, Technologies & Infrastructure
European emissions regulations, such as the most recent Euro VI emissions standard, are increasingly tightening in order to drastically reduce pollutant emissions by up to 80% , with cities also planning to lock out Diesel vehicles from entry . Such developments in regulations are putting increasing pressure on OEMs to develop alternative powertrains to comply with these standards, as well as avoid sanctions. The pressure in the CV industry to find new technologies and make them viable alternatives to Diesel also stems from the fact that, up to Euro VI, pollutant emissions had already been reduced to relatively low levels . A further reduction of emissions of Diesel fuel may be difficult as well as costly, and might actually lead to increased fuel consumption, which is entirely counterproductive . Thus, new technologies are needed to stay on top of regulations and costs, alike. The three greatest contenders to this challenge, showing the greatest promise in the future, are: liquefied natural gas (LNG), hydrogen fuel cell, and battery-powered electric engines . LNG, being a fossil fuel (albeit less environmentally harmful than the rest), is the most dependent on public opinion and policy support, despite its advantages in fast refueling and support for long-distance transportation . But because it is not a true zero-emission technology, LNG, as well as hybrid engines, are seen as bridging solutions to reduce, but not eradicate, emissions in the medium term only . As a zero-emissions technology, on the other hand, battery-powered electric vehicles enjoy the greatest support both from the general public as well as policymakers, and is thus is the most attractive of the three alternatives . Moreover, infrastructure to support battery-powered electric vehicles is relatively easy to implement and keep up, more so than for the other two contenders . Most favorable for long-distance transport is hydrogen fuel cell, because of its quick refueling abilities, in addition to being zero-emissions and especially suitable in terms of long-distance capabilities . However, it is an expensive technology (unattractive to CV customers), and highly dependent on necessary infrastructure and the availability of of cheap electric power , making it a hard sell for policymakers at this point in time. For these reasons, battery technology as enjoyed the greatest share of the global research effort into new powertrains, and continues to grow and improve at a rapid rate, supporting higher energy densities than ever before .
Geographical Differences & Technology Adoption
Adoption rates for these and other technologies will inevitably vary by region and country, due to varying emissions standards, political goals, natural resources, infrastructure capabilities as well as differing needs from customers. In the CV industry, the US, Europe, and China are already at the forefront when it comes to the adoption of high-tech innovations and products, partly due to their stricter regulations, and thus forming the largest profit pool for OEMs by far . Of course, there are many regional differences to account for within these large markets, as well: adoption rates will vary by regional needs, vehicle type, utilization, and access to resources and infrastructure . Government policy will also be a deciding factor as to which powertrain will dominate which regional market . When we assume, then, that certain markets in Europe (for example Germany) will be early adopters while others will follow in the years to come, we must consider what the consequences of differing rates of adoption are for cross-border transportation in such a connected geographical area as the European Union. Specifically, in an extreme case, if regulations are tightened in Germany so much so that “older” powertrains from neighboring countries cannot enter, on which Germany as an economy depends on for imports and exports, what then? Statistics show that revenue from tolls collected from foreign commercial vehicles into and through Germany accounted for 41.3% of toll revenues overall in 2019, or €3.1 billion . This revenue is likely to increase in the future due to faster rates of globalization and higher overall demand for consumer products and shorter delivery times. This income is likely to be reduced significantly, should geographic differences in infrastructure and new powertrain adoption rates become too great; regulations and systems will not be compatible to allow the ever-growing amount of cross-border cargo shipments to go on its upward trend as it is now, and should be considered once new powertrains become more widely accepted and utilized. The great challenge, then, is to facilitate interconnectivity within as well as across borders, which in turn requires significant cooperation from multiple governing entities.
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