Battery prices have continued to plummet, frankly faster than even battery optimists such as myself dreamed of. We're seeing commercial, scaled, price points that we didn't expect to see until 2030 or later. That has big implications for electric trucking.
In 2022, a kilowatthour of battery capacity cost US$159. In 2023, $136. At the beginning of 2024, batteries were available for $95 per kWh. And recently CATL announced that it would be shipping batteries at a price point of $56 per kWh at the end of 2024. It's reasonable to assume that $30 per kWh is likely by 2030 and that it's a conservative projection.
Most reports on megawatt scale charging for trucks have been focusing on maximum potential power requirements. A 2022 white paper by RMI, the National Grid, CalStart, Stable and Geotab, for example, analysed Geotab data for trucking in New York and Massachusetts. It's fine, but it focused on peak power demand for charging stations and assumed no battery buffering was available. Given significant variance of traffic loads at most locations, that means it was not looking for the average power, but the maximum power. For over a quarter of the 71 sites reviewed, the study found that 5 MW of grid power electricity was required. That's enough to charge five Tesla Semis or Daimler equivalent Class 8 trucks at once.
This is a problem as multi-megawatt grid connections can take years, while sub-megawatt connections take months in most places, per studies like this one from the Department of Energy. That amount of power is a big infrastructure project. But what if battery buffers were cheap?
Let's look at transformers for a minute, one of the limiting factors. Transformers are constructed of laminated silicon steel or amorphous steel, copper or aluminum wire, various insulating materials such as paper, pressboard, and insulating oil, steel, radiators, fans, or cooling tubes made from metals like copper or aluminum, electrical contacts and insulating materials, and porcelain or epoxy resin. You see transformers every day, but subtract them from the visual landscape. The round garbage-pail sized cans on power poles are transformers. A lot of the metal boxes beside commercial buildings are transformers.
Transformers come with power ratings, usually in kilovolt-amperes (kVa). You can figure out what the kilowatt power rating is with a simple calculation, multiplying by 0.8, according to a paper in Consulting-Specifying Engineer from 2011, and trust me, the ratio won't have changed since then. A typical small commercial building of 460 square meters (5,000 square feet) might have a 112.5 kVa transformer which would be capable of delivering 90 kW of power. Bigger ones are 450 kVa, delivering about 360 kW of power. They can be assembled in a modular fashion to enable more power from bigger distribution lines.
Needless to say, current truck stops and other places where big trucks might charge don't have 6,250 kVa of transformers sitting there idle. But they do typically have somewhat oversized transformers, especially newer ones, because electric cars are coming and everything runs off of electricity, including all the pumps. All of the refrigeration and cooling for truck stops is drawing from them. Oversizing somewhat is pretty typical.
And remember, 450 kW or 900 kW of new power is typically a few months wait.
It's much easier to deliver more energy through a wire than it is to increase the power rating of the wire. Places with inflexible generation like Ontario with its nuclear fleet would probably love to have behind the meter batteries drawing electricity 24/7/365. Certainly the best rates in Quebec are for sites which draw the same power 95% of the year.
Distribution grid utilization is low, only 40% to 50%, in the United State per the EIA. That means that utilities build for double the energy delivery as actually occurs to support peak demand periods. There's lots of energy delivery capacity sitting idle on the grid, and cheap batteries can take advantage of that. Utilities could see 20% more utilization and hence 20% higher revenues for the same maintenance costs for their grid, a clear win.
So let's run some numbers. Let's assume a truck stop has available capacity on transformers of 112.5 kVa, 450 kVa and 900 kVa. How many kWh could they deliver if they are at that peak power for 24 hours a day? That would be the size of the battery. How much would that battery cost with 2022, 2025 and 2030 battery prices outlined above? While there are other bits and bobs with batteries, the equivalent of balance of plant on hydrogen electrolysis facilities, they are relatively insignificant by comparison, and the batteries themselves are the vast majority of the cost. As such, let's just use the battery price plus 10% for the extras and installation. (Feel free to correct me if this is a poor assumption.)
How many trucks could they charge in a day, assuming the average truck needs 800 kWh to fill its 1.1 MW battery, enough to travel another 730 kilometers (450 miles) down the road?
The dollars are rounded because the precision is low. In 2022, napkin math probably made the idea of battery buffering a non-starter. In 2025, looking at coming CATL prices, dropping a million dollars of battery on key truck stops as an interim measure to allow trucks to access megawatt charging within a year and starting the grid upgrade project to get more power to the site starts looking like a reasonable idea.
In 2030, smaller sites that only see a few electric trucks a day, for example smaller distribution centers, might consider it very reasonable to drop $300,000 on a battery to enable electrified trucking with rapid turn around. That's a lot cheaper than a hydrogen compression and pumping system, and battery maintenance means not touching it, unlike the constantly failing compressors in hydrogen refueling stations.
Of course, cheap batteries start making electricity price arbitrage viable as well. Consider Ontario's US$0.02 per kWh overnight rates. It costs them a lot of money to reduce output from their nuclear fleet and it costs them a lot of money to pay neighboring jurisdictions when they have too much, so they've made it cheap at night to shift demand to low demand periods. Their peak period rates are US$0.21 per kWh.
That $0.19 per kWh difference, assuming the big 17 MWh battery saw 33% of its charge from lowest rates and that 33% was consumed during peak rate periods — a simplistic assumption, but not an unreasonable way to look at it — would be worth $400,000 per year. The $570,000 cost of the battery suddenly doesn't seem that high when the ROI is 17 months, does it.
Especially when the truck stop won't be charging industrial electricity rates to truckers who pull in for electricity. In California, DC fast charging rates can be $0.45 per kWh. The US range for electric vehicle charging is from $0.08 to $0.27 per kWh, with an average around $0.15 per kWh, per the Department of Energy. Megawatt scale charging will be at the upper end of the scale because time is money to truckers. Super off peak rates in California are $0.20 to $0.25, and if you are charging $0.45 to truckers, that's a nice markup.
Slap cheap solar on all of the rooftops and canopies on the truck stop and the value proposition just gets better. Even when increased demand is modeled and the grid upgrade is ordered, the likelihood of having the battery persist and possibly be expanded for more buffering of cheap electricity to peak hours and retail rates is going to pencil out well, in addition to most likely reducing the power upgrade itself for more savings.
At these price points and the price points of solar these days, putting sufficient charging in a lot of distribution centers is a lot more viable than it was a couple of years ago. This is a challenge David Cebon, founder of the Centre for Sustainable Road Freight at Cambridge, has pointed to me several times, a reason he's a strong proponent of electrified road systems and dynamic charging. Getting lots of power to smaller distribution centers is expensive and slow. Getting lots of energy to them isn't nearly as big a problem. I suspect these price points will trigger some recalculations in Centre models. As always, I do napkin math and sometimes this results in rigorous studies by others.
The Swedish study I participated in didn't model out battery buffering at all, but assumed industrial rates for electricity and that the grid upgrades would be completed in 2035, a defensible simplification for twelve years from now. One of the studies I assessed, a bad one from the International Council on Clean Transporation that magically found that hydrogen made by electricity at the same truck stop where electric trucks would charge would be only 10% more expensive than electricity for same distance covered, when three times as much electricity would be required, assumed that no battery buffering was possible at all, when all fast chargers have some buffering already, and that this was a winning argument for hydrogen.
Cheap batteries start to make charging trucks and fleets a lot more viable because they replace the peak power problem with an energy supply over 24 hours requirement, and because they'll pay for themselves with electricity price arbitraging. And by the way, this is true for most of the distribution grid upgrade problems the USA faces. I've taken to saying that betting against batteries in the 2020s is like betting against bandwidth in 1999. It's just the losing bet.