Economies of scale matter: how refueling infrastructure policy affects the viability of alternative fuel trucks

Abstract

This study examines the role played by economies of scale in the economic viability of alternative fuel trucks such as battery-electric (BET) and fuel cell electric trucks (FCET). Focusing on the role of infrastructure deployment, the research evaluates how recharging infrastructure capacities and fleet sizes impact the Total Cost of Ownership (TCO) of alternative fuel trucks from 2025 to 2040, and hence the competitiveness of the different alternatives for the decarbonization of heavy-duty transport. The findings show that, on average, BETs are likely to dominate the short and medium term, particularly in urban and regional logistics. FCETs can also become competitive in long-haul operations. However, the competitiveness of both alternatives depends to a large extent on the economies of scale of recharging infrastructures, with FCET requiring large fleets or shared stations in order to reduce refueling costs. The paper discusses the implications of these findings for European green infrastructure policies, in particular AFIR, which must be aligned with these economic realities in order to be successful.