Myth-busting Freight & logistics decarbonization: separating hype from reality

Almost 90,000 zero-emission trucks sold globally in H1 2025—more than all of 2024 combined—with 97% being battery-electric. Yet hydrogen fuel cell trucks saw sales decline 50% year-over-year to approximately 1,000 units. This bifurcation reveals the central tension in freight decarbonization: between technologies that work today and those perpetually promised for tomorrow. For decision-makers navigating this transition, separating hype from reality determines whether investments accelerate or strand.

Why It Matters

Medium and heavy-duty trucks generate 23% of U.S. transport sector CO2 emissions despite representing less than 8% of vehicles. Road freight accounts for approximately 8% of global CO2 emissions—a share that has increased 78% since 1990 as supply chains globalized and just-in-time logistics intensified. The IEA's Net Zero Scenario requires 15% emissions reduction from 2022 to 2030, representing roughly 2% annual decline.

European Union regulations now mandate 90% emissions reduction for new trucks and coaches by 2040, with 100% zero-emission requirements for urban buses by 2035. The California Advanced Clean Trucks (ACT) regulation—adopted by seven U.S. states—requires manufacturers to sell increasing percentages of zero-emission trucks starting at 9% for Class 4-8 straight trucks in 2024, rising to 75% by 2035.

These regulatory frameworks create compliance pressure, but the underlying economics remain challenging. Sustainable aviation fuel trades at 3.1x premium over conventional jet fuel. Hydrogen fuel cell trucks demonstrate 3-4x the total cost of ownership compared to diesel equivalents. Understanding where technology actually delivers cost parity—versus where it remains subsidy-dependent—is essential for credible transition planning.

Key Concepts

Electric Trucks: The Current Reality

Battery-electric trucks dominate zero-emission adoption for practical reasons:

Range adequacy for most applications: Class 8 electric trucks achieve 150-300 miles per charge, while medium-duty vehicles cover 100-200 miles. Given that over 80% of truck movements involve return-to-base operations under 200 miles, electric trucks already address the majority of use cases.

Infrastructure buildability: Depot charging requires significant upfront investment—grid upgrades can cost $2M+ per facility—but represents solvable engineering challenges. The Megawatt Charging System (MCS) enables up to 3.75 MW charging for heavy-duty vehicles, reducing operational charging time to practical windows.

Improving economics: Battery pack costs reached $90/kWh in China during 2024, compared to $190/kWh elsewhere. McKinsey analysis suggests consortium charging models could achieve TCO parity by approximately 2026 for medium-duty applications, versus early 2030s with unoptimized public charging.

Regional variations: China sold over 80,000 electric trucks in H1 2025—twice the 2023 volume—with battery electric heavy trucks reaching 20.9% of new sales in December 2024. The U.S. market contracted sharply, with only 200 electric trucks sold in H1 2025, down 80% from 2024 due to policy reversals.

Hydrogen Trucks: Persistent Promise

Hydrogen fuel cell trucks retain advocates for specific applications:

Long-range capability: 600+ mile range per tank and 5-15 minute refueling times theoretically address long-haul applications where electric trucks face challenges.

Payload preservation: Battery packs add significant weight, potentially requiring 4 electric trucks to replace 3 diesel trucks for long-haul heavy loads. Hydrogen fuel cells offer better power-to-weight ratios.

Reality check: Professor David Cebon of Cambridge University states definitively: "Hydrogen trucks won't be a thing because they are far more expensive to purchase and about three times more expensive to run than electric trucks." The European RISE study projects battery-electric dominance across nearly all freight segments due to higher efficiency, lower operating costs, and scalable charging infrastructure.

The market reflects this assessment. Despite pilot programs from Hyundai, Toyota, and others, hydrogen truck sales declined 50% year-over-year in H1 2025. Chinese hydrogen truck deployment—once a potential growth market—has contracted despite government support.

LCA and Additionality Complications

Lifecycle assessment (LCA) complications emerge from power source variability:

Grid mix dependency: Electric truck emissions depend entirely on charging grid carbon intensity. Trucks charged on coal-heavy grids may produce lifecycle emissions comparable to efficient diesel vehicles. Temporal optimization—charging during high-renewable periods—can reduce effective emissions by 40-60%.

Green hydrogen scarcity: Hydrogen fuel cell trucks only deliver emissions benefits with green hydrogen (electrolysis powered by renewables). Current production is overwhelmingly gray hydrogen (natural gas-derived) or blue hydrogen (with carbon capture of uncertain effectiveness). Green hydrogen costs approximately 2-3x gray hydrogen, undermining already challenging economics.

Additionality questions: Corporate procurement of "green" electricity or hydrogen must demonstrate additionality—that the purchase caused new renewable generation beyond what would occur otherwise. Without additionality verification, environmental claims become accounting exercises rather than atmospheric reality.

Compliance and Traceability

European regulations increasingly require end-to-end emissions traceability:

SAF certification: Sustainable aviation fuel requires chain-of-custody documentation from feedstock through blending. SAF certification schemes (ISCC, RSB) provide traceability frameworks, but compliance costs and verification complexity challenge small producers.

Book-and-claim mechanisms: Mass balance and book-and-claim approaches allow environmental attribute trading separated from physical fuel flows. These systems enable market flexibility but raise questions about whether purchasers are buying emissions reductions or carbon accounting conveniences.

Shipper responsibility: Scope 3 reporting requires shippers to account for transportation emissions regardless of carrier ownership. This creates demand for verified low-carbon logistics services but challenges data collection across fragmented carrier networks.

What's Working

What's Working

Urban and regional electric truck deployment demonstrates viable economics. The Nepal case study published in Scientific Reports found electric trucks could reduce logistics costs by 33.3% and emissions by 55.9% for urban distribution applications. These savings derive from lower fuel costs, reduced maintenance, and exemptions from urban access restrictions.

Depot-based charging infrastructure solves the reliability problem that plagues public networks. Return-to-base operations with overnight charging avoid demand charge spikes, ensure full charge for each shift, and eliminate dependency on public charging network availability. The Southern California truck microgrid—the nation's largest heavy-duty EV charging depot—demonstrates integrated solar generation with vehicle charging.

Digital freight networks reduce emissions without vehicle replacement. ACEEE analysis shows load optimization, route efficiency, and reduced empty miles can achieve 5-15% emissions reduction from existing diesel fleets—"free" decarbonization that improves both environmental and financial performance.

What Isn't Working

Long-haul battery electric applications remain operationally challenging. Despite Tesla Semi demonstrations, 500+ mile applications require either massive battery packs (reducing payload) or public charging network dependence (introducing reliability and scheduling risks). The economics remain difficult.

Hydrogen infrastructure buildout lags far behind electric charging. Refueling station costs, hydrogen supply chain complexity, and uncertain demand create a chicken-and-egg problem that neither government programs nor private investment have resolved. The comparison is stark: charging infrastructure received nearly $2 billion in U.S. federal awards through January 2025, while hydrogen heavy-duty infrastructure remains fragmented and limited.

Sustainable aviation fuel scale-up faces persistent economic headwinds. At 3.1x conventional jet fuel prices, SAF adoption requires either mandates or carbon pricing at levels not yet politically achievable. Current SAF production meets less than 1% of global aviation fuel demand.

Key Players

Established Leaders

• Tesla Semi – Class 8 electric truck with demonstrated 500+ mile capability, production ramping through 2025
• Daimler Truck (Freightliner eCascadia) – Leading OEM commitment to electric heavy-duty with established dealer/service network
• Volvo Trucks (VNR Electric) – European market leader expanding North American electric truck presence
• BYD Trucks – Chinese manufacturer dominating Asian markets with aggressive global expansion
• Maersk – Shipping giant piloting electric truck partnerships for Latin American logistics, targeting net-zero by 2040

Emerging Startups

• Einride – Autonomous electric freight pods with remote operation capability
• Lion Electric – Canadian manufacturer specializing in medium-duty electric trucks and buses
• Hyzon Motors – Hydrogen fuel cell focus despite market headwinds, targeting specific heavy-duty applications
• Harbinger Motors – Medium-duty electric platform designed from ground-up for electric architecture
• Forum Mobility – Charging infrastructure developer specifically targeting trucking depots

Key Investors & Funders

• U.S. Department of Energy – Inflation Reduction Act funding for zero-emission heavy-duty vehicle replacement
• California Air Resources Board (CARB) – Regulatory driver and incentive provider for truck electrification
• Breakthrough Energy Ventures – Bill Gates-backed fund with significant logistics decarbonization portfolio
• Clean Energy Finance Corporation (Australia) – Funding Hume Hydrogen Highway infrastructure development
• European Investment Bank – Green bond financing for commercial vehicle electrification

Sector-Specific KPIs

KPI	Diesel Baseline	Electric Current	Electric Target 2030
TCO per Mile (Medium-Duty)	$1.40-1.60	$1.50-1.80	<$1.30
TCO per Mile (Heavy-Duty)	$1.80-2.10	$2.30-2.80	<$1.80
CO2e per Ton-Mile	100-120g	20-60g (grid-dependent)	<15g
Vehicle Uptime	95%	88-92%	>95%
Charging/Refueling Time Impact	15 min	30-180 min	<45 min
Payload Capacity Retention	100%	85-92%	>95%
Infrastructure Availability	Universal	Limited regional	Corridor coverage

Examples

1. Titan Freight Systems (Pacific Northwest, U.S.): Deployed 6 electric trucks in 2024 with expectation of 150,000 zero-emission miles. Their approach—depot charging for return-to-base regional operations—exemplifies the sweet spot where current electric truck technology delivers reliable performance. Driver acceptance has been strong, with electric vehicle preference emerging among their workforce.

2. Milence (UK/Europe): Opened Europe's first dedicated electric truck charging facility in March 2024, targeting heavy commercial vehicle needs specifically. The purpose-built design addresses power requirements (350kW+ per stall), parking configurations, and driver amenities that repurposed passenger vehicle charging cannot accommodate. Their pan-European expansion demonstrates investor confidence in trucking-specific infrastructure.

3. Hyundai XCIENT Fuel Cell (Switzerland/U.S.): Operating hydrogen fuel cell trucks in Switzerland since 2020 and expanding to Georgia with 21 units planned for Hyundai's own logistics operations. While representing the most substantial hydrogen truck deployment outside China, even Hyundai's captive fleet approach struggles with refueling infrastructure limitations. The Georgia deployment benefits from proximity to planned hydrogen production facilities.

Action Checklist

• Audit fleet operations to identify electric-ready applications (urban delivery, return-to-base regional, port drayage) versus genuinely long-haul requirements
• Model depot charging infrastructure costs including grid connection, on-site generation potential, and demand charge mitigation strategies
• Evaluate grid carbon intensity for primary operating regions and incorporate temporal charging optimization into emissions projections
• Develop carrier engagement requirements for Scope 3 transport emissions including verification protocols and data sharing standards
• Track California ACT regulation adoption in additional states and plan compliance strategies accordingly
• Assess hydrogen infrastructure development in specific corridors before committing to fuel cell vehicle procurement

FAQ

Q: Is battery-electric or hydrogen the better choice for freight decarbonization? A: For applications under 300 miles with return-to-base operations—representing over 80% of truck movements—battery-electric is clearly superior based on current costs, infrastructure availability, and operational reliability. Hydrogen retains theoretical advantages for long-haul heavy loads but lacks infrastructure and faces 3-4x TCO disadvantage. Market behavior confirms this: 97% of zero-emission trucks sold globally in H1 2025 were battery-electric.

Q: When will electric trucks achieve cost parity with diesel? A: Medium-duty electric trucks in high-utilization applications (125,000+ annual miles) are approaching TCO parity now in favorable electricity markets. Heavy-duty parity requires battery cost reductions and depot charging optimization, with McKinsey projecting 2026-2028 for optimized deployments. Unoptimized scenarios push parity to early 2030s. Regulatory costs (carbon pricing, access restrictions, emission zone fees) accelerate financial parity in European markets.

Q: How should companies account for freight emissions in sustainability reporting? A: Scope 3 Category 4 (Upstream Transportation) and Category 9 (Downstream Transportation) require shipper accounting regardless of carrier ownership. Use actual carrier emissions data where available, falling back to well-to-wheel emission factors from recognized databases (GLEC Framework, EPA SmartWay). For book-and-claim SAF or renewable energy, verify additionality claims and disclose methodology. Market-based accounting should complement location-based emissions disclosure.

Q: What infrastructure investments are required for fleet electrification? A: Depot charging for medium-duty fleets typically requires $50-150k per vehicle in infrastructure (chargers, electrical upgrades, site work). Heavy-duty fast charging may require $300k+ per charger plus grid upgrade costs of $500k-2M+ depending on utility territory and local capacity. On-site solar and battery storage can reduce demand charges but add upfront capital. Plan 12-24 months for utility interconnection in constrained areas.

Q: How reliable is public charging for commercial truck operations? A: Public fast charging reliability for heavy-duty trucks remains insufficient for mission-critical operations. First-Time Charge Success Rates for DC fast charging average 85-86% nationally, with significant variation by network and station age. Commercial fleets should plan depot charging as primary infrastructure and use public networks only for contingencies. Dedicated commercial truck charging networks (Milence, Volvo Trucks, Daimler Truck) may offer higher reliability than passenger-focused operators.

Sources

• BloombergNEF 2025 Electric Vehicle Outlook and Zero-Emission Commercial Vehicles Factbook
• IEA Global EV Outlook 2025 - Trucks and Buses Chapter
• California Air Resources Board Advanced Clean Trucks Regulation Documentation
• McKinsey & Company "Can zero-emission trucks become viable" Analysis (March 2025)
• Nature Scientific Reports: Decarbonising road freight transport study (2024)
• CALSTART Zeroing in on Zero-Emission Trucks Report
• U.S. Environmental Defense Fund Zero-Emission Trucking Investment Analysis