Daimler Trucks’ Roger Nielsen Says Customers Wary of Electric Vehicles

November 06, 2018 by Alan Adler, @AlanAdler

Electric-trucks have the potential to shift how goods are shipped regionally, but are far from ready for over-the-highway use because current batteries do not hold enough energy, said Roger Nielsen, chief executive of Daimler Trucks North America.

Truck buyers are wary of jumping into alternative propulsion when they don’t know if it will be as predictable as driving on diesel fuel, Nielsen said.

“Not all past alternative powertrain technologies have been positive for them,” he said. “They aren’t going to jump into yet another unknown experience.”

Roger Nielsen (Photo: Daimler)

Nielsen, 57, took over the top job at Daimler’s North American truck division, a sister company to the Mercedes-Benz passenger car business, last year. Previously, he spent 16 years as chief operating officer, overseeing day-to-day operations of Daimler’s industry-leading Freightliner brand and Western Star, its smaller nameplate sibling he helped acquire 17 years earlier.

In a recent roundtable with trucking industry media, the veteran executive talked about trade tensions with China, getting parts to dealers faster than Amazon and the company’s partnership with Boeing to advance the use of 3D printing for older parts. Here is an edited version of that conversation.

What’s the effect on Daimler of the trade dispute between the U.S. and China?

The inbound tariffs have been tough. Steel and aluminum prices went up higher than the tariffs would lead you to believe they should. We saw steel go up nearly 50 percent before the tariffs were actually introduced. And they’ve stayed at those high levels. We’re starting to see suppliers say it’s starting to hit them. So hopefully this settles down and we get some predictability to it. One thing this industry doesn’t like is uncertainty. We are watching closely and hoping for peace.

How is eCommerce influencing the way you handle your supply chain?

Everybody says, ‘Amazon, they deliver something in two days.’ If our dealers waited two days for a part, they would shoot us. We’ve introduced direct service, so you can order as late as possible at night and get the part the next morning.

What more is Daimler doing with additive manufacturing or 3D printing?

We see it growing, especially as you get into low- volume parts. I’m really excited about the improvements there. If we can get the cost and the turnaround down, I think it would become more viable. We continue to invest quite a bit in it. We’re partners in Portland, Oregon, with Boeing in the Oregon Manufacturing Innovation Center, which we set up this past year.

Is there room for more growth in new truck orders?

We think we are up against the ceiling on what our suppliers can bring to us. I do not see the market changing drastically as we go forward. We’re not talking about next year’s market forecast, but I do not see any reason for our volumes on a daily basis to change in 2019.

Why were there so many truck orders placed during the typically slow summer period?

The fourth quarter is mainly where there is a very large order intake, and customers make the decisions as they head into their financial planning for the next calendar year. This year, negotiations are happening earlier.

What is the status of Daimler’s electric truck development?

As we develop the vehicle, we always take the extreme-use case. I want to get that full 11 hours of driving. I want to spend the night in my truck, or I want to get a second shift (of driving). Batteries and the systems around them cost more than a diesel-power truck. We believe (we have) the scale to bring that cost down faster than anybody else.

How does battery power change the amount of time a customer keeps an electric truck?

They’re not expecting to change their trade cycle because there is a sweet spot for residual value (of a used truck). They’re looking for the new technology and they’re going to take advantage of that. But residual value and the retention of the value through the life of the vehicle is at the top of the list. When you go out with a customer and you say, “Hey, you can get 750,000 miles out of that battery pack and you can get 80 percent of the range on mile 750,000,” we want to be able to point to our testing to say that’ll happen.

Where does equipping trucks for platooning fit your plans?

Platooning definitely has some promise for fuel efficiency, but what’s the cost to the driver’s lifestyle and stress level, and the cost to the organization of the freight hauling and so forth? As we get further along with different levels of automated driving, it might be more palatable. As we talk to different customers about different applications, it is difficult to find an application which would make sense to equip the whole fleet with that kind of technology at the moment.

Is the Western Star brand meeting your expectations in construction use?

With the increase in investments in infrastructure around the country, there’s a lot of room for growth on our side in the vocational segments via construction, road construction, cement hauling and what have you. In those traditional, severe, heavy-duty applications, you’ll see us go after those with additional features on Western Star.

Read Next: Daimler, Air Board Launch Electric Truck Test at Southern California Ports

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