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Daimler (DDAIF) Announces Launch of Electric Truck in 2021

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Per Reuters, Daimler AG (DDAIF - Free Report) announced that it will launch a fully-electric semi-trailer truck, the production of which will start in 2021. The 18-wheeler and 250-mile ranged Freightliner eCascadia is meant for regional deliveries and port services.

In addition to this, Daimler also launched a medium-duty Freightliner eM2 106, designed for local deliveries, with a range of up to 230 miles. In late 2018, the company plans to deliver 30 prototypes of the two models for field-testing by the customers.

Further, Daimler has announced the opening of a new research center in Portland, which will work on research and development (R&D) of autonomous freight trucks. The center will work along with the company’s other centers situated in Germany and India.

Daimler AG Price and Consensus

In order to develop Daimler’s truck operations, R&D investment of more than €2.5 billion ($2.9 billion) will be made in 2018 and 2019. Out of the total amount, around 20% will be used for electrification, connected vehicles and autonomous driving technology.

Emission-free electric trucks can reduce pollution caused by gasoline or diesel combustion engine-enabled trucks. Moreover, maintaining these electric trucks is expected to be cost-effective. Many major automakers have already started gearing up for introducing their electric trucks. 

In 2017, Navistar International Corporation (NAV - Free Report) partnered with Volkswagen AG , with $1.7-billion investment for electric drives, autonomous vehicles, cloud-based systems and self-driving vehicles by 2022. Further, these companies aim to introduce an electric medium-duty truck in North America by 2019. Similarly, Tesla Inc. (TSLA - Free Report) announced its plan to launch heavy-duty semi truck, with a 500-mile range, which will run longer distances.

However, the success of electric trucks will hugely depend on the availability of batteries along with its capacity and range. Daimler will use batteries from Akasol GmbH for its truck production. The German firm, Akasol manufactures batteries that are used in industrial vehicles, locomotives and ships.

Price Performance

In the past three months, Daimler’s stock has moved down 12.5%, underperforming 0.1% increase of the industry it belongs to.

Zacks Ranks

Currently, Daimler and Tesla carry a Zacks Rank #2 (Buy), while Volkswagen carries a Zacks Rank #3 (Hold), and Navistar sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Both Daimler and Navistar have long-term growth rate of 5%, while Volkswagen and Tesla have long-term rate of 6.2% and 30%, respectively.

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