Scania boss says pricier diesel will accelerate electric truck sales

Truck manufacturers are losing money on electric trucks, due to a low level of take-up by truck buyers. While hydrogen trucks are not going to be a suitable, low-emission alternative, in the long term.

That's the view of Christian Levin, CEO of Scania and Traton which is a player in Australia's emerging electrified truck market.

In a recent interview, Levin also warned that European Union CO2 legislation poses a greater threat to Europe’s truck industry than Chinese competition, while also pointing out that Scania is currently losing money on every electric truck it sells.

He says the problem is that demand for electric trucks is not growing quickly enough to enable truck makers in Europe, like Scania, to meet strict EU targets set up in the EU’s carbon reduction timetable.

Levin was speaking at the recent IAA Transportation event in Hanover where European truck makers, as a group, made a call for action over the 2030 CO2 timetable.

He says manufacturers have done their part by developing and putting electric trucks into series production, but the charging infrastructure and incentives needed to persuade operators to buy them are not currently sufficient.

“You have to, in very simple words, make diesel more expensive,” Levin said.

“I know a lot of your readers and listeners don’t want to hear that. Or, we need to make electricity or energy for electric vehicles cheaper. If these things are not in place, it doesn’t matter how good the vehicles are that we bring to the market; they will not take off.”

Currently battery-electric trucks are said to account for about 2 per cent of the 2025 European market, and are expected to reach 2.4 per cent in 2026. However, the EU requirements state that the truck makers need to reach a 35 per cent market share to meet the EU’s CO2 targets by 2030.

“There is not even a beginning of an S-curve now,” he said. “We are saying it’s impossible. It will not happen.”

The consequences for the truck makers could be damaging. Daimler Truck says that missing its target by 10 percentage points could result in a €1.2bn ($1.93bn) penalty.

“It cannot happen. It must not happen,” Levin said. “It is a bigger threat to Europe’s industry than what many talk about, the Chinese threat. I talk about the threat from Brussels. This is a threat from the EU hanging over our heads, and it is absurd.”

He says Scania has invested funds into its manufacturing capacity, working on a timetable that would see electric trucks get to 50 per cent market share in Europe by 2030. However, those production facilities are currently substantially underutilized.

“We had invested for a 50 per cent uptake by 2030, and now we see a one or two per cent uptake,” he said.

“In a normal diesel production facility, where you need to be 70 or 80 percent to break even and start making money, we are just a few per cent. So obviously we’re losing money on every single vehicle.”

Levin believes governments can improve the business case for electric trucks, by allowing a bigger payload. One of his suggestions is for mainland Europe to follow the UK example and move from 4x2 prime movers to a 6x2 or 6x4 configuration.

“We see somewhere from two tonnes up to potentially even five tonnes of payload penalty. So, can you compensate for that? Yes, you could, and you should.”

When asked about the development of hydrogen fuel for the trucking industry, Levin is similarly sceptical and doesn't expect it to challenge battery-electric trucks in the mainstream market.

Scania plans to put 40 trucks using Toyota fuel-cell technology into customer operation.

“We keep a toe in the water,” he said. “It’s far too expensive to operate. So, we do not believe that that’s the pathway.

"I’m also personally afraid that a lot of investment is now flowing into the hydrogen transport economy, where it will give no returns whatsoever.

“If we say, let’s now focus on enabling conditions, get the charging infrastructure in place for battery-electric vehicles, and then we end by saying, ‘And don’t forget about hydrogen’, we confuse. We confuse the public. We confuse our customers. And worse, we confuse the policymakers.

“What happens is, we’re throwing good public money after bad. So, let’s go for battery electric. That is what’s going to dominate the market in the coming 10 to 15 years.”

Levin describes fuel-cell technology itself as, “brilliant, I love it, but it shouldn’t be for trucks”.

Levin admitted that the current influx of Chinese brands into the European market will have an effect on the long-term truck market in Europe.

However, he sees the current diesel-powered offerings from Chinese manufacturers as below the standard required, while having a different opinion about the electric power options.

“Let’s see in a couple of years, or perhaps five years, how many of (the Chinese truck brands) remain. I’m sure there will be a few that survive, and we should absolutely respect that and keep a very close eye on them.

"But not the 15 or 20 we saw trying their wings in Europe at IAA Transportation. They won’t all succeed.”

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