September 11, 2023
When consumers envision an electric vehicle, they tend to think of small, compact cars like the Chevrolet (Tii:GM) Volt and Bolt or an ecowarrior car like the Toyota (Tii:TM) Prius. However, an increasing number of consumers are picking electric light-duty trucks that provide the convenience of being able to haul boats, campers, work equipment and gear while also protecting the environment.
And for retail shareholders, the options to invest in these electric truck producers are growing as more companies add to their electric lineups. The global electric truck market was valued at $728 million in 2022. Between 2023 and 2032, the market is estimated to reach nearly $12 billion.
Like traditional electric cars, these light-duty trucks run on battery packs. As gasoline prices remain high, electric trucks are gaining in popularity. In addition to cost-savings at the pump, electric trucks require fewer moving parts and do not need transmissions leading to lower vehicle maintenance costs and improved dependability.
According to a story by ABC News, Ford (Tii:F) started production of the all-electric F-150 Lightning in late 2021 and the automaker still cannot keep up with demand. Higher material costs and ongoing chip shortages have hampered production of the $60,000 pickup, which gets at least 230 miles on a full charge, forcing eager buyers to wait months or longer for theirs to arrive. The Dearborn automaker sold 15,600 F-150 Lightning units in 2022.
While production problems and high demand are making it difficult for automakers to keep up with demand, the companies are selling trucks at a higher price per unit. The average transaction price of a Lightning this year was $84,192 compared to $64,331 for the standard F-150 truck, according to Ivan Drury, senior manager of insights at Edmonds. Tony Caravano, senior director of customer engagement at Rivian (Tii:RIVN), told ABC News that 75% of the company’s R1T and R1S electric truck customers are new to EVs. Moreover, 60% of R1T customers have never owned a pickup truck before. “People are really excited by the design, capability and performance,” he said.
Ford is not alone among traditional automakers in adding electric trucks. GMC said interest in its $110,000 Hummer EV pickup is strong and its $107,000 Sierra EV Denali goes on sale early next year. GM is also producing an all-electric $39,900 Chevrolet Silverado. Stellantis (Tii:STLA) is now making the Ram 1500 REV as well.
The category is also seeing the rise of new electric truck manufacturers who have developed e-pickups and are beginning to market them. Rivian recently released its R1T electric pickup. Tesla’s (Tii:TSLA) radically styled Cybertruck is expected to hit the market late this year or early next. Electric auto startup Fisker (Tii:FSR) recently introduced its Alaska electric pickup with a price tag of $45,400.
In addition to their cost savings on fuel and maintenance, electric trucks are gaining popularity because they are quiet and fast compared to their gas-powered cousins. The R1T and Hummer EV can rocket from 0-60 mph in 3 seconds; the Lightning in less than 4 seconds.
Growth in the electric light-duty truck market is needed if President Joe Biden is to meet his climate goals that call for two-thirds of new cars and trucks sold in the U.S. to be all-electric by 2032. The Biden administration says these proposed rules would cut nearly 10 billion tons of CO2 emissions and save consumers $12,000 on average over the lifetime of a vehicle.
Electric vehicle sales are rising though they still account for a small share of the U.S. auto market. Electric trucks totaled a fraction — 0.20% — of total vehicle sales in 2022. Cox Automotive forecasts EV sales will surpass 1 million units this year in the U.S.
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