Powering the transition to zero-emission trucks through infrastructure

Around seven million medium- and heavy-duty freight trucks circulate the United States today—and almost all are powered by traditional internal combustion engines (ICEs).¹IHS Automotive, AutoInsight, May 2022; EV-volumes, February 2022; McKinsey Center of Future Mobility Electrification Model, June 2022. This legion of vehicles generates more than 25 percent of total greenhouse gas emissions (GHGs) from the transportation sector, including carbon dioxide and nitrogen oxides, pollutants that threaten the population’s respiratory and cardiovascular health.²“Smog, soot, and other air pollution from transportation,” United States Environmental Protection Agency, January 4, 2023.

As truck transport continues to grow—with about 65 percent of freight tonnage expected to be shipped by truck in 2050—emissions grow as well.³“Freight analysis framework,” United States Department of Transportation—Federal Highway Administration, February 1, 2023. The United States faces a transition point where it must move toward renewable energy and zero-emission vehicles (ZEVs). Unlike their ICE counterparts, zero-emission (ZE) trucks, such as battery electric vehicles (BEV) or fuel cell electric vehicles (FCEV) powered by hydrogen, do not produce direct tailpipe emissions.⁴The requirement to transition to ZE trucks may increase in importance if widespread adoption of commercialized autonomous technology furthers the cost-efficiency of autonomous vehicles (AVs), driving significant increases in the number of miles driven by AV trucks, leading to even higher emissions than currently projected.

In November 2022, the United States committed that ZE truck sales nationwide would reach 100 percent in 2040.⁵“U.S. signs global commitment to 100 percent zero-emission trucks, buses at COP27,” Environmental Defense Fund, November 18, 2022. Thus, we expect the share of ZE trucks in operation to grow from less than 1 percent today to more than 75 percent in 2050 for all medium- and heavy-duty trucks. This shift could result in a roughly 20 percent reduction of GHG truck emissions by 2035 and more than 75 percent by 2050.⁶McKinsey Center of Future Mobility Emissions Model, January 2023. Given the transport sector’s significant GHG emissions, a switch to ZE trucks could rev up the country’s drive to be cleaner and greener, with a better overall cost of ownership to fleet operators.

The opportunity for the freight truck sector to decarbonize now, and the ensuing impact on the economy and emissions, is enormous; however, a mass rollout of ZE trucks would require appropriate infrastructure to support commercial freight journeys, much like ICE vehicles need gas stations along their routes. Thus, we are faced with a chicken-and-egg problem. What comes first—the ZE trucks or the refueling and charging stations that support them? Battery electric and fuel cell trucks need a minimum charging and refueling network to operate, but is it reasonable to invest heavily in infrastructure without a current demand to sustain (or even use) it?

This article examines how the most critical freight journeys can be used to map a minimum viable infrastructure network to support the ZE truck transition, outlining what the network needs to look like in 2050. Laying this groundwork could instill confidence in fleet operators and truck original equipment manufacturers (OEMs) to make the ZEV transition happen at pace and demonstrate the public sector’s commitment to it, too.

McKinsey analyzed today’s freight traffic in the United States and projected how it may change in the decades ahead. By analyzing trip characteristics and powertrain needs, we were then able to map the flow of trucks by ICE, BEV, or FCEV and thus plot out the optimal state-by-state distribution of refueling or charging stations required to keep each running.

Now is the time for public sector entities, private stakeholders, and fleet owners to start laying the groundwork for future ZE freight transport in earnest. Achieving their transition goals may require ten to 20 years of infrastructure development, an undertaking that demands a coordinated effort from the outset. We hope that aggregating cross-industry insights across all these stakeholder sets will help accelerate decarbonization by giving private and public entities a look at how the future may play out.

ZE truck adoption is gathering speed as the public and private sectors set transition targets

It is likely that ZE trucks will dominate future freight flows in the United States. Federal and state governments have already introduced regulations and incentives to promote the transition. Actions at the federal level include incentive programs and tax breaks for ZE vehicles, components, and infrastructure, tightened fleet emission standards, and adjusted expectations for net-zero fleet availability. The 2021 Bipartisan Infrastructure Investment and Jobs Act, for instance, allocates $7.5 billion to charging infrastructure in the United States.⁷“Fact sheet: Biden-Harris administration announces new standards and major progress for a made-in-America national network of electric vehicle chargers,” The White House, February 15, 2023. Meanwhile, the 2022 Inflation Reduction Act unlocks tax credits for the purchase of commercial ZE trucks and the installation of charging infrastructure, providing grants for existing vehicle manufacturers to refit their facilities with ZEV-manufacturing equipment.⁸“Clean heavy-duty vehicle program,” United States Environmental Protection Agency, February 13, 2023.

State governments are complementing these measures by setting targets for the number of ZE trucks operating on their roads and banning ICE vehicles from entering in the future. California’s recent Advanced Clean Truck regulation, for example, requires manufacturers of commercial vehicles to start selling ZE trucks in 2024, with a goal to transition the state’s truck fleets to 100 percent ZE by 2045.⁹“Update: California's heavy-duty electrification regulations now adopted by 5 more states,” Mobility Notes, January 6, 2022. In the private sector, auto manufacturers such as General Motors have announced plans to phase out ICE vehicle production, while companies such as Walmart and Unilever have announced emission reduction plans for their fleets.¹⁰Neal E. Boudette and Coral Davenport, “G.M. will sell only zero-emission vehicles by 2035,” New York Times, January 28, 2021; Fernando Cortes, “Zero sum: How Walmart transportation is working to reduce emissions now and in the future,” Walmart, June 8, 2022; “How we’re driving down our logistics emissions,” Unilever, January 11, 2023.

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Mapping truck freight flows in the United States

Freight routes are crucial conduits in the United States economy. Understanding the purpose of freight allows us to connect the flow of goods to route and traffic requirements in 2050, which informs the mix of powertrains required to sustain these future routes. This powertrain mix can then be used to calculate the infrastructure requirements to support these ZEV trucks.

To visualize current freight flows, we used the McKinsey Center for Future Mobility freight projections to map commodity flows and origin-destination city pairs onto state-by-state vehicle traffic. As expected, heavy-duty trucks (HDTs) are currently concentrated in the Midwest and along transcontinental corridors, while medium-duty trucks (MDTs) operate chiefly within regional corridors between large urban areas (Exhibit 2).¹¹Vehicle traffic from HPMS and commodity flows from FWHA’s FAF.

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Building on this visualization, commodity growth projections were used to map out how the distribution and volume of HDTs and MDTs might evolve in the future, completing the image of what freight flows could look like by 2050. As the transition toward ZE trucks picks up speed, freight flow visualizations suggest the coverage that ZE infrastructure would likely need to deliver (Exhibit 3).

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Matching freight journeys to vehicle powertrains

A closer examination of trip characteristics provides further information on the type of ZE powertrains (either BEV or FCEV) that are expected to traverse established freight routes in the future and the infrastructure needed to support them—whether electric vehicle charging infrastructure (EVCI) for BEV trucks or hydrogen refueling stations (HRS) for FCEV trucks.

The analysis for this article allows us to determine the optimal ZE truck powertrain according to distance, range, charging time, and truck characteristics based on today’s assumptions of tomorrow’s technical capabilities. Let’s look at two route examples: San Francisco to Los Angeles and San Francisco to New York (Exhibit 4).

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BEV would be the optimal powertrain choice for a typical San Francisco to Los Angeles trip. On this shorter route frequently populated by MDTs, increased availability of electricity may make fuel costs more competitive when compared to ICEs and FCEVs. Battery range could also allow a full trip without stops, which is important due to BEV's slower charging time.

On the longer San Francisco to New York trip, FCEV may be the ideal powertrain match. FCEV’s higher range means fewer stops, and quicker FCEV refueling times are estimated to reduce journey times by 25 percent. Though the fuel cost is slightly higher, the faster delivery time and labor savings point to FCEV being more efficient than BEV for this trip.

Equipped with this information, we can begin to map out the demand for charging and refueling hubs along established freight routes, ensuring that infrastructure is built to support types of ZE trucks and the volume of traffic in the decades to come.

How many charging and refueling stations will be needed to support the switch?

The shift toward ZE trucks may require sizable investment in public charging and refueling infrastructure. Drawing on freight flow projections, and layering on expected powertrain adoption plus energy requirements, we estimated the number of public HRS and EVCI stations that will likely be required to keep ZE trucks running in the future (Exhibit 5). Overall, investing in these stations for US HDT and MDT could result in a total capital expenditure of about $20-30 billion (construction cost only).¹²In 2023 dollars, excludes any potential hydrogen production/compression and grid upgrades or any operational costs.

In addition to these estimates, it is likely that complementary infrastructure such as grid upgrades and hydrogen compression and distribution investments will be necessary.

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Major trends that could impact ZE truck and infrastructure projections

There are four major disruptions that could significantly change the evolution of the ZE truck market in the next few decades (and thus these projections)—with implications for the type and volume of powertrains expected on freight routes, and the demand for public charging and refueling stations:

• Nearshoring and regionalization: Multiple factors, such as supply shortages, transport difficulties, and a focus on sustainability, have led to an increased focus on nearshoring and regionalization. Over the next few decades, this may alter how cargo volumes are distributed between water and land ports. Increased prevalence of regional trips and a decrease in long-haul use cases may also lead to higher utilization of BEV trucks compared to FCEV trucks.
• Autonomous trucking: Autonomous trucks are being developed for middle-mile land transport, typically for trips between warehouses. Without the need for driver breaks, long-haul trips become quicker and more economical. Therefore, their frequency compared to regional and urban trips is likely to increase. Utilizing FCEV technology will further this efficiency gain, as hydrogen refueling is markedly quicker than BEV. Thus autonomous technology may help accelerate FCEV adoption. Given the decrease in long-haul trip time, frequency of long-haul trips will likely increase, compared to urban and regional distances.
• Changes to the value chain: Beneficial cargo owners (BCOs), such as e-commerce companies with their own distribution fleets, and companies with platform-based digital business models may have a major impact on the traditional value chain, as BCOs own large fleets and tend to rely on private infrastructure. As BCOs grow, fleet owners may increasingly utilize their own private charging or refueling stations, which could open up space at existing public stations.
• Cargo drones: The use of commercial unmanned aerial vehicles (UAVs) for last-mile and remote delivery would require a new class of infrastructure including vertiports, airports, and UAV chargers. This may capture volume from urban trips made by MDT today.
• E-fuels: E-fuels are synthetic fuels created from previously captured CO₂. The combustion of e-fuel, which can be used to power ICE engines, still results in tailpipe emissions. Due to their overall CO₂-neutral balance, however, there is currently a push in certain European nations to extend synthetic fuel production and usage. Acceptance of this fuel for US renewable efforts—likely dependent on the extent to which emissions from the use of e-fuel align with US regulatory standards—may increase the prevalence of ICE vehicles in our projections and reduce the need for EVCI or HRS.¹³William Wilkes and Wilfried Eckl-Dorna, “Porsche, Ferrari e-fuel push at heart of EU engine debate,” Bloomberg, March 4, 2023.

The rollout of ZE infrastructure is a shared undertaking

Both the public and private sector have a role to play in establishing future ZE infrastructure. While the public sector could focus on the supporting infrastructure, industry collaboration, and social development, private stakeholders may consider thinking through product development, investments, and operations.

What is required from the public sector to enable this transition?

Governments could consider several important questions to enhance and support the ZE truck transition, including:

• Can power grids consistently deliver large volumes of electricity at high rates, or will they need to be upgraded as chargers scale and become faster?
• How do governments enable the back-end infrastructure of hydrogen refueling stations at scale, given limited use today?
• How can government agencies aim to work with private stakeholders, encouraging the ZEV transition but also creating self-sustainable businesses?
• How can the planning and development of highways, roads, and bridges change as vehicle characteristics evolve with ZEVs (for example, the introduction of heavy batteries affecting road maintenance and bridge weight thresholds)?
• How can states encourage job creation in their region as a part of the ZEV transition and infrastructure buildout?

What is required from the private sector to enable this transition?

The private sector may also play a major role in achieving a ZEV transition, fueled by both regulatory and consumer pressure. The private sector could consider reflecting on key questions when working towards ZE truck transition, including:

• As commodity producers’ freight volumes grow, how might their technology requirements evolve to meet this increased demand for product transport?
• How can ZE truck manufacturers think through their development timelines and the mix of powertrains in production?
• How can EVCI and HRS operators decide where to locate their charging stations and how to work with state and local governments?

The public and private sectors are already edging towards a zero-emissions future, but revving up a ZE freight network demands immediate and coordinated action. Building and planning ZE infrastructure requires substantial time and investment, and the United States’ goal to halt the sale of ICE trucks by 2040 looms closer. Understanding the scope of the challenge should be the first stop, as mapping current routes will make clear what is required to power freight fleets of the future. Keeping an eye on technological developments is also necessary, to ensure the sector avoids any blind spots. Starting now, a clear map, a smart inventory of tools, and the backing of a determined collective could put the United States well on its way to an emissions-free 2050 destination.