Fuel trucks and their competitors

Fuel trucks and their competitors

In the context of the global pursuit of carbon neutrality, new energy vehicles have gradually become the core driving force for the transformation of the automotive industry. From BYD Chairman Wang Chuanfu’s firm belief in electrification to Huawei’s Yu Chengdong’s vision for the future of smart cars, the development of new energy vehicles has become an irreversible trend.

In the commercial vehicle market, the situation of traditional fuel vehicles has become more severe. They not only face the impact from new energy vehicles, but also have to deal with competition from gas vehicles. The market penetration rate of new energy trucks has approached the critical threshold of 10%. At the same time, according to the cumulative sales data in the first four months of this year, domestic gas tractor sales reached 71,000 units, accounting for 67% of the tractor market. This phenomenon has triggered extensive discussions in the industry: driven by the new energy wave, can fuel vehicles still maintain their market position in the commercial vehicle field?

• Current status and challenges of the commercial vehicle market

Although the rise of new energy vehicles has had an impact on the market structure, the dominance of fuel vehicles in the commercial vehicle market has not been immediately shaken, especially in the field of heavy trucks . The operating characteristics of these vehicles require the power system to not only provide strong pulling power, but also have sufficient endurance, and current battery technology is still difficult to meet the endurance requirements of long-distance logistics. In addition, compared with passenger cars, the replacement cycle of commercial vehicles is longer, which also means that fuel vehicles will maintain a certain period of existence in the market.

However, with the continuous advancement of battery technology and the reduction of costs, new energy commercial vehicles have begun to gain competitiveness in areas such as short-distance transportation and urban distribution. Government policy support, such as toll concessions and tax exemptions, is also accelerating the market acceptance of new energy commercial vehicles, which not only reduces the operating costs of enterprises, but also promotes the transformation of the market.

At the same time, the widening price gap between oil and gas has made gas vehicles have a more obvious impact on fuel vehicles.

• Progress in new energy technologies and the future of fuel vehicles

The core of new energy vehicle technology is the power battery. At present, the energy density and safety of batteries have been significantly improved, but they still face challenges in terms of cost, lifespan and environmental impact. Especially in the recycling and processing of batteries, realizing battery recycling and reducing environmental impact is the key to technological innovation. The solution to these technical challenges will directly affect the market prospects of new energy vehicles, including commercial vehicles.

Under the guidance of policies, the market share of new energy vehicles is gradually increasing. However, over-reliance on government subsidies is not a long-term solution, and establishing a market-oriented competition mechanism is crucial. New energy vehicles must continue to improve in performance, stability and reliability to meet growing market demand.

For fuel vehicles, technological innovation must be used to improve fuel efficiency and reduce emissions to remain competitive in the market. Industry experts believe that internal combustion engines can survive for at least 50 years. Technological progress will make internal combustion engines more and more fuel-efficient. The industry goal is to increase thermal efficiency to 55%. However, most current thermal efficiencies are still 48%-49%, and there is still room for improvement.

Although new energy vehicles have received significant technological and policy advancement, the future of fuel vehicles in the commercial vehicle market is not without hope. First of all, the technology of fuel vehicles is mature and the cost is relatively low, which is still attractive to the commercial vehicle market that pays attention to cost-effectiveness. Secondly, for long-distance transportation and heavy-load tasks, existing battery technology has not yet provided solutions that match fuel vehicles. Therefore, fuel vehicles will still play a role in the commercial vehicle market for some time to come.

At the same time, the transformation of fuel vehicles is also ongoing. For example, hybrid technology and more efficient internal combustion engine designs can achieve lower emissions and better fuel economy. This transformation can not only extend the market life of fuel vehicles, but also find a way for them to adapt in the new energy era.

• Competition between fuel vehicles and gas vehicles

As a transitional energy source in the commercial vehicle market, natural gas has shown many advantages. Its carbon emissions are relatively low, helping to alleviate environmental pollution and greenhouse gas emission problems. According to data from April 2023, domestic LNG prices have remained relatively stable at 4 to 4.3 yuan per kilogram, while the price of No. 0 diesel has climbed to more than 7.6 yuan per liter. In terms of follow-up maintenance, gas vehicles also have advantages. Moreover, as the cost performance of gas vehicles has improved in the past year, these significant cost differences provide natural gas vehicles with economic advantages that cannot be ignored.

However, as a fossil fuel, natural gas is not clean enough to completely solve the fundamental problems of energy consumption and environmental pollution. In addition, the infrastructure construction of natural gas vehicles and their refueling stations requires huge amounts of money, which is a major challenge for both the government and enterprises.

There is no official news to confirm that natural gas heavy trucks will face additional surcharges, but this topic has attracted widespread attention and discussion in the industry. The potential adjustment of tax policies is not only related to the raising of government funds, but also involves the impact of economic regulation, market behavior, and the realization of social policy goals. When considering tax policies, policymakers must weigh the environmental advantages of natural gas vehicles and the rapid development trend of new energy vehicles.

If additional taxes are imposed on gas-powered vehicles in the future, the advantages of gas-powered vehicles over fuel-powered vehicles will be weakened. In this regard, some experts believe that gas-powered vehicles are more likely to be eliminated in the future.

• Market reality and expectations

The market is the ultimate standard for testing everything. Although the market share of new energy and gas vehicles is gradually increasing, consumer acceptance is still the key. For the commercial vehicle market, operating costs, vehicle performance and maintenance convenience are important factors that determine whether it will be widely accepted. New energy commercial vehicles need to prove their value to the market in these aspects, while fuel vehicles also need to maintain their market position by improving efficiency and reducing costs.

As the domestic commercial vehicle market enters a period of adjustment, the supply chain is improving and price wars are intensifying, the price of fuel vehicles is about to bottom out. Blindly chasing the rise and selling the fall is not advisable. For users of heavy loads and some routes in the south, fuel vehicles are still a viable choice.

• Conclusion

Faced with the rapid development of new energy vehicles, the role of fuel vehicles in the commercial vehicle market is undergoing a profound transformation. Although the progress of new energy technology is undeniable, it is too early to say that fuel vehicles will be eliminated. The maturity of technology, cost-effectiveness considerations, and the extensive layout of existing infrastructure all support that fuel vehicles will continue to play an irreplaceable role for a long time in the future.

Technical innovations in fuel vehicles, such as improving thermal efficiency, reducing emissions and the application of hybrid technology, are continuously improving their market competitiveness. At the same time, for specific market demands, such as long-distance transportation and heavy-duty tasks, fuel vehicles are still one of the best choices. These factors together ensure that fuel vehicles will not be eliminated in the short term, but will coexist with new energy vehicles and adapt to market changes together.

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