White paper

Total cost of ownership for heavy trucks in China: Battery electric, fuel cell, and diesel trucks

Electrification Zero-emission vehicles
Engineering & manufacturing


In this study we analyze the total cost of ownership (TCO) of zero-emissions truck technologies in China, namely battery-electric trucks (BET) and fuel cell electric trucks (FCET), for three HDV segments including tractor-trailers, dump trucks, and straight trucks. The study aims to identify the TCO parity time between zero-emissions trucks and diesel trucks for the considered HDV segments in Beijing, Shanghai, and Shenzhen, thereby providing an analytical basis to support the development of NEV targets for those HDV segments. The analysis is based on a thorough modeling of TCO and simulations of energy consumption. It is undertaken as an analytical contribution to the goal of the Chinese government to increase the share of NEV sales to about 20% of all vehicles sold in 2025.

Our analysis finds that all battery-electric truck segments can achieve TCO parity with diesel trucks as of the second half of this decade. Battery-electric dump trucks are cost-effective compared to their diesel counterparts as early as 2025. Battery-electric tractor-trailers and straight trucks will reach TCO parity with diesel toward the end of the decade. Fuel cell electric trucks will almost reach TCO parity with diesel trucks toward the end of the decade for straight and dump trucks.

Based on our findings, we recommend the following for the development of policies designed to drive the adoption of HD-NEVs in China:

  • Set ambitious sales requirements for HD-NEVs in the near term. Truck operators will only reap the economic benefits of HD-NEVs if there is a robust supply of them. California provides a best practice example for the setting of targets, requiring 11% of new heavy rigid trucks to be zero emission by 2025 and 50% by 2030. For tractor-trailers the zero-emission sales requirements are 5% and 30% by 2025 and 2030, respectively. China’s ambition to become carbon neutral by 2060 requires that the central government introduce targets at least as ambitious as those adopted in California.
  • Set long-term zero-emission sales targets to provide manufacturers a clear picture for future product planning and investment. The combination of near-term binding sales requirements with long-term nonbinding targets set by the government is desirable. The former ensures the immediate kick-start of the needed supply chains; the latter provides the certainty that the investments made will have a long life. The combination of the two is important to create a large and long-lasting market, whose economies of scale will drive down manufacturing costs and, consequently, the TCO of HD-NEVs.
  • Provide incentives to bring the TCO parity of HD-NEVs with diesel trucks to the first half of this decade. Policy can create adequate incentives to close the TCO gap between diesel HDVs and HD-NEVs in the next 5 years. Subsidies—which are not fiscally sustainable—should be limited in scope and duration to stimulate demand in early phases. Policies following the “Polluter Pays Principle” can generate the revenue needed to fund incentive programs in the long term.
  • Design policies that are application-specific but technology-neutral. Policies must target the deployment of zero-emission vehicles in the segments with the highest CO2 emissions, such as tractor-trailers. At the same time, they should aim for a level playing field between battery-electric and fuel cell trucks to favor the most cost-effective technological pathway in the long term. Our analysis shows that battery-electric trucks have a cost advantage in the absence of incentives.