The era of electrification has been coming for commercial trucking for several years. Rick Dauch and Jim Kamsickas say the era hasn’t dawned quite yet, but the sun isn’t that far from the horizon. The age of electric trucks will arrive this decade.
During the opening panel discussion Monday at Heavy Duty Aftermarket Dialogue (HDAD) in Grapevine, Texas, the Delphi and Dana Incorporated chief executives shared their experiences evolving their businesses for an electric future and preparing for an uncertainly certain future.
Dauch, who took over at Delphi last January after several years at Accuride, is anticipating the next three to five years will feature “generational changes” for the global transportation industry as countries across the globe introduce stricter emission standards and subsidize the adoption of electric vehicles.
Electrification was the word of the day during the opening panel discussion at @HDMADialogue this morning. Here’s a great snippet of the conversation, with answers from Rick Dauch @delphitech and Jim Kamsickas @DanaInc_ pic.twitter.com/QIvA220six
— Lucas Deal (@lddeal85) January 27, 2020
“We think we’re going to double our [electrification] business in the next five years,” he says. “We are not sure when exactly it will come, but it’s coming.”
Kamsickas says Dana has spent the last several years investing heavily in electrification to become an “energy source agnostic” supplier. Like Dauch, Kamsickas doesn’t expect the diesel to electric transition will hit the U.S. trucking industry immediately, but the writing is on the wall. Once adoption rates start rising, acceptance will hit the industry like a wave.
“If you’re asking yourself if this is coming or not, just look at Rivian getting 100,000 orders from Amazon,” he says.
The panelists say the big challenge now for global suppliers is transitioning their businesses to be ready to ramp up electrification production on a dime without abandoning the core businesses that drive their companies today. Dauch says Delphi has opened four new production facilities across the globe to support its electrification business. He says one of the facilities in China hasn’t made a single part since it was completed last summer, which has been a tough sell to the company’s board but does provide Delphi immediate scalability for the Asian market once adoption rates start to climb.
Dana has made similar investments, though Kamsickas adds his company has discovered preparing for electrification requires more than simple manufacturing investment and sourcing preparedness. The hard part about electrification isn’t figuring out how to design and build the components, it’s understanding how the components will subsist within new connected vehicles.
Kamsickas says today’s supplier community has to have “full competency to understand the manufacturing view.”
On that note the panelists note the importance of global suppliers shifting their recruitment strategies to attract the talent necessary to design equipment for an electric future. After decades of hiring the best and brightest mechanical engineers they could find, suppliers today are increasingly focused on recruiting and retaining electric engineers and software engineers.
Speaking to the Heavy Duty Aftermarket Week (HDAW) interns from Northwood University, Dauch advised, “If you can come out of school with a good understanding of electrification, you’ll be a leader in your company on Day 1. Seriously.”
But Monday’s discussion wasn’t electrification exclusive. The panelists also touched briefly on automation, the recently signed USMCA trade agreement and the importance of parts availability in the aftermarket. Regarding the former, the panelists were both bearish on autonomous vehicle adoption in the trucking industry. The duo says the advanced safety technologies required to provide automation are great and will continue to grow in acceptance, but full Level 5 vehicle autonomy may be unnecessary, with Dauch adding, “I think there are billions of dollars being wasted on autonomous trucks in this country.”
Regarding the new trade agreement, Kamsickas says the key takeaway from the deal is the certainty it will provide the business community.
“I don’t think we’re going to see any drastic changes,” he says. “We now have stability so we can make investment decisions.”
As for parts availability, the panelists say their businesses continue to invest heavily in their distribution channels. Electric powertrains require fewer components than their diesel counterparts, but the number of SKUs won’t matter to a fleet customer when they’re broken down on the side of the highway.