Deployment of electric trucks in the Netherlands slows due to delay in zero-emission zones

While the short trip distances in the Netherlands (where 80% of trips are less than 150km) are ideally suited to electric transport, investment in electric trucks is under pressure. The reason for this is the Dutch government’s current watered-down course. As a result, transporters feel less pressure to switch to electric transport now. This is according to ING Research’s new Asset Vision for Trucks and Trailers.

While the new government wants more freedom to postpone zero-emission zones, manufacturers internationally are actually marketing a wider range of electric trucks to meet initial CO2 reduction obligations by 2025. Major transport clients will also start paying closer attention to emissions as a result of new European reporting requirements (CSRD).

After years of production problems, order backlogs in the truck market are now shrinking rapidly and demand has cooled. This year, truck sales are still rising due to a wave of new diesel rigids ordered for the transitional zero-emission zones. But in 2025, truck sales will decline by about 10%.

Government’s watered-down course

Many companies are already gearing up for the introduction of zero-emission zones and the transitional phase starting on 1 January 2025. This year, the subsidy pot was depleted at lightning speed again, and many companies are actively planning ahead. The new government now wants to look at postponement, which creates new uncertainty among investors, and that does not help the influx of zero-emission trucks.

Of the 30 to 40 targeted municipalities within the ‘Greendeal zero-emission urban logistics’, only a minority will start early next year. There is also a chance that postponement may follow in several cities. Apeldoorn and Ede are already examples of this. The fact that the subsidy seems to remain is favourable, but for companies that have not yet started electric driving, the policy dilution takes the pressure off.

Erik Slaaf, ING Sector Banker Transport and Logistics: “Delaying zero-emission zones slows the build-up of the electric fleet, which will then still have to take place at a fast pace to meet the CO2 reduction targets set for road transport. This creates great pressure on suppliers, transporters and customers alike.”

Truck sales to decline, especially in 2025

After years of production cuts and piled-up orders during the COVID-19 pandemic and the outbreak of war in Ukraine, truck manufacturers have now caught up. Production is back on track, and delivery times have fallen sharply. With that, the market normalized in 2024. At the same time, carriers saw transport demand drop before that.

This confluence of circumstances means there is now surplus capacity, and companies have put the brakes on new equipment purchases. Because of delayed deliveries and previously ordered diesel rigids (which are still allowed to enter zero-emission zones if their registration plates are issued this year), sales will still hold up reasonably well in 2024, but will nevertheless drop in 2025.

Scaling up zero emissions remains priority

As the Netherlands takes the pressure off with zero-emission transport, several truck manufacturers, including DAF and Mercedes, will start supplying electric tractors with longer range by 2025. This broadens the stakes and should enable manufacturers to meet the mandatory CO2 reduction target of 15% over average production (rising to 45% by 2030).

This is expected to allow electric trucks (currently about three times more expensive than diesel trucks) to fall in price, but they will remain significantly more expensive than diesel trucks. From 2026 and 2027, the truck levy and the introduction of a European emissions trading system for road transport will help bridge the price gap. The influx of electric trucks into Europe will then increase further. Manufacturers are also working on trucks with hydrogen combustion engines for longer distances and heavy transport.

CO2 reporting will hit carriers as early as 2024

Listed transport clients will have to report on CO2 emissions from their transport for the first time with the introduction of the Corporate Social Responsibility Directive (CSRD) in 2025. This means that carriers working for them and being part of the chain (Scope 3) can expect data requests from clients as early as this year.

This requires attention, because by no means all carriers are already prepared and know exactly how customers want to measure performance and receive data. It is notable that biodiesel (HVO-100), meanwhile, is making strong inroads in international road transport, which may also be related to the reporting requirements here.

“The insights that the CSRD will provide will lead to an acceleration of the energy transition. For instance, from 2025, the emissions data of the first group of large transport companies will be insightful and customers will be able to start comparing companies,” says Sector Banker Erik Slaaf.

Overheated trailer market has cooled quickly

The fact that the truck and trailer market has turned from a seller’s market into a buyer’s market is most noticeable in the trailer market, which has gone from overheated to cooled. With the drop in transport demand, investments have also been scaled down quite quickly, while earlier orders were just in due to long delivery times. Standard sliding tarpaulin trailers, which are also often purchased in larger numbers, are particularly affected.

Demand for specialized equipment is holding up better. Overall, total trailer sales are expected to fall by more than a fifth by 2024. Electrification of refrigeration systems and axles is a useful innovation that could shake up the market and help revive demand for replacements from 2025 onwards.