FRANKFURT (Reuters)

Prices of emissions-free trucks need to fall by as much as half to become an affordable alternative to diesel models, according to a study by consultancy firm McKinsey published on Wednesday. This adjustment is essential to help achieve the European Union's climate targets.

Currently, less than 2% of the EU's heavy freight vehicles are electric or hydrogen-powered. The study, released before the IAA Transportation 2024 truck show in Hanover, indicates that to meet the bloc's carbon emission reduction goals, this figure must increase to 40% of new sales by 2030.

Presently, the production costs for electric trucks are 2.5-3 times higher than for diesel trucks. As logistics companies are reluctant to accept higher costs for emissions-free freight, achieving this target remains challenging.

To enable this shift, new electric truck prices need to be no more than 30% higher than diesel models, necessitating significant advancements in battery technology.

Furthermore, for the successful implementation of the EU's CO2 strategy, a 25% reduction in charging costs is required. By 2035, Europe needs to install 900,000 private charging points, requiring an investment of $20 billion.

Chinese manufacturers pose an additional challenge for European truck makers by offering competitive products at lower costs, already capturing a 20% share of the bus market.

Anna Herlt, head of commercial vehicle consulting at McKinsey and co-author of the study, remarked, "I don't think it's impossible that this could actually happen in electric trucks over time."