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Do you expect a sharp slowdown for truck purchases in October due to the possible resurgence of the Coronavirus this fall?
Chris Fisher
PSR Analysis: At this point, no. The “shock and awe” of the pandemic appears to be well behind us. During the past few months, commercial truck demand has stabilized albeit at a low level but continues to improve.
Recent surveys have indicated that trucking conditions are improving. The biggest threat to the health of the industry would be a further lockdown of the economy which would cause trucking conditions to slow but would not likely upend the market. However, we do believe it will take a further 18-36 months for the economy to return to a pre-virus level.
The 1,200 units is the estimate by Power Systems Research of the number of Off-Highway Trucks to be produced in North America (Canada and the U.S.) in 2020.
This information comes from industry interviews and from two proprietary databases maintained by Power Systems Research: EnginLink™ , which provides information on engines, and OE Link™, a database of equipment manufacturers.
This information comes from industry interviews and from two proprietary databases maintained by Power Systems Research: EnginLink™ , which provides information on engines, and OE Link™, a database of equipment manufacturers.
According to Scott Yarbrough, senior analyst for motorcycle and powersports at Black Book: “After the first month of the COVID-19, shutdowns put a freeze on powersports values during the beginning of the spring selling season, and the second month saw dramatic declines.
This month values are up across the board, some by the largest amounts we have ever seen in a monthly update. A combination of surprisingly strong demand, coupled with drops in availability of units, has led to this resurgence in values,”
The Current Status of Electric Commercial Vehicles
During the past decade, PSR has followed the progress of alternative fuels and technologies such as gas and diesel hybrid, natural gas, and electric along with other renewable fuels. To date, alternative fuels have been relegated to more niche segments and have not penetrated the larger end of the market.
Chris Fisher
Segments such as transit and school buses along with short distance segments like refuse have been the primary adopters of natural gas since they tend to be close to their terminals for refueling and recharging. The bus market along with pickup and delivery trucks are the target segments for electric vehicles in the near term.
Late last year, Amazon placed an order for 100,000 light commercial “Prime” vans from Rivian that will likely be the beta test for the viability of light electric commercial vehicles. These vehicles are expected to begin deliveries next year.
Audi and the utility EnBW are pioneering an energy storage facility built on retired electric vehicle (EV) batteries. This partnership is being billed as the solution to a major problem in each industry.
Tyler Wiegert
For automobile manufacturers, the question of how to recycle retired batteries has been pressing for some time. Utilities have been struggling with the perverse problem that excess generation from renewable sources has been slowing adoption, as surges from those sources can disrupt the stability of power grids.
EV batteries have a functional life of 3-10 years after they are retired from vehicle use, making them a ready tool for use by utilities.
Portland General Electric Company (PGE) also is seeking to create a more resilient grid for the utilization of renewable energy sources. They are launching a pilot program to incentivize the installation of home battery systems to act as a virtual power plant.
In a statement released June 30, Daimler announced it will be investing “a very substantial sum” in achieving a CO2-neutral future for the transportation sector. Hydrogen fuel cell production facilities are currently in development, with an eye toward mass production of fuel cells and their component parts.
Tyler Wiegert
Some of the hurdles Daimler is working to overcome are the needs for highly-filtered air and stable ambient temperature and humidity. The materials and components used in fuel cell production do not allow for an easy transfer in process from conventional engine manufacturing.
COVID-19 continues to batter production of off-highway equipment as we continue to move through 2020. The effects of the virus on Agricultural and Construction equipment production in North America were analyzed in a June 17 webinar presented by the Heavy Duty Manufacturers Association (HDMA) and Power Systems Research (PSR). The webinar updated information presented in PSR’s webinar in April.
Jim Downey
The PSR webinar team was Jim Downey, PSR vice president-global data products , and Yosyf Sherementa, PhD, PSR director-product management and customer experience.
PSR projects AG to be down 9.4% and CN to be down 11.3% when comparing global production for this year (2020) to last year (2019).
China and India which have the largest volumes for ag machinery are the lower side for production percentage drops this year. China which is also the largest producer of construction equipment is not expecting a decline this year.
Yosyf Sheremeta
A slight recovery for Construction equipment is expected in 2021, but not until 2022 for Agricultural machinery. Ag sector recovery will ultimately depend on overall economic recovery from the COVID-19 pandemic.
The construction segment will not return to pre-virus production volumes for another few years, at best. We’re looking out to 2024 or possibly 2025 to get back to 1.48 million units.
We don’t see a V-shaped type scenario on the horizon in North America, but rather recovery will look like something between a “U” and an “L.” Somewhat of a swoosh shape or upward sloping L. Economic activity will slowly return to a sense of normalcy as the curve of new COVID-19 cases flattens.
Government support and intervention will be needed, and stimulus will provide an economic backstop. We expect modest growth in 2021. Pent-up demand and continued economic stimulus should also help with rebound.
This information comes from industry interviews and from two proprietary databases maintained by Power Systems Research: EnginLink™ , which provides information on engines, and OE Link™, a database of equipment manufacturers.
Samuel Libaire, a senior at Eagan High School, Eagan, Minnesota, has received the 2020 Power Systems Research $2,500 academic scholarship.
He will use the scholarship to study Computer Science at Vanderbilt University.
“My favorite subject is computer science,” says Samuel. “It is one of the only subjects that can have multiple solutions to a single problem while also proving instantly that some don’t work. In many sciences, theories are never 100% true, but in computer science, a program either works perfectly or it simply doesn’t.”
