Mercedes-Benz's Electric Heavy Truck Is a 26-Ton Message to Tesla Motors

By Markets Fool.com

The Mercedes-Benz Urban eTruck is an all-electric heavy truck with 200 kilometers of range. Image source: Daimler.

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Germany's Daimler (NASDAQOTH: DDAIF) last week unveiled a prototype of a new kind of vehicle: a battery-electric heavy truck.

The Mercedes-Benz Urban eTruck is a fully electric heavy truck with a range of up to 200 kilometers (124 miles) and a total weight (truck plus cargo) of up to 26 metric tons.

It's an impressive technical achievement. It's also, I think, a pointed message to Tesla Motors (NASDAQ: TSLA) and its investors: Tesla isn't the only auto company pushing toward an electrified future.

Not quite a tractor-trailer, but a serious heavy truck for urban use

We should make this clear up front: This isn't a tractor-trailer, though it's very likely that Daimler also has an electric tractor-trailer in the works.

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Daimler showed the truck as a cab plus a bare chassis, but you'll rarely see something like that on the road. Visualize it instead with a big cargo box on that chassis -- as the kind of heavy diesel-powered delivery truck you might see in urban areas, perhaps in the early mornings.

So what is it? Simply put, it's a prototype of a vehicle that could replace those diesel-powered trucks on urban delivery routes. Daimler said that its 200-kilometer range would be sufficient for a typical daily delivery route. Itexpects, it said in a statement,to be mass-producing something like the Urban eTruck "at the beginning of the next decade."

While Tesla has had great success translating battery-electric technology to big luxury vehicles, battery-electric heavy trucks have been seen as a more complex problem. Fully loaded, they're much heavier than cars, meaning that they require a lot more from their batteries. To get good range with current technology, huge battery packs would be required, adding even more weight and a whole lot of expense.

Daimler said that the key to the Urban eTruck is the fact that battery technology is advancing rapidly, while costs are also falling quickly. Daimler is on track, it said, to having batteries that will allow the Urban eTruck to compete directly with diesel-powered alternatives on cost within a few years.

Even then, Daimler's electric truck will still be at a weight disadvantage to diesel: It's about 1,700 kilograms heavier than a comparable diesel truck. That means less cargo, as European Union rules currently limit these types of trucks to a total loaded weight of 25 metric tons. But Daimler expects the EU to approve a one-ton exception for trucks with "alternative drives," which will cut the eTruck's loaded-weight disadvantage to just 700 kilograms (about 1540 pounds).

Daimler also made it clear that this truck isn't just a flight of fancy. It's already testing smaller electric trucks with customers in Germany, and it plans to proceed with development and testing of the Urban eTruck with the aim to have it in mass production within four or five years.

Daimler is already testing a smaller battery-electric commercial truck, the Fuso Canter E-Cell, with clients in Germany. Image source: Daimler.

Stefan Buchner, head of Mercedes-Benz Trucks, said in a statement:

With the Mercedes-Benz Urban eTruck, we are underlining our intention to systematically developing the electric drive in trucks to series production maturity. This means that we will begin to integrate customers, so as to gain valuable joint experience with respect to the operating ranges and the charging infrastructure in daily transport operations. Because we think the entry of this technology into the series production is already conceivable at the beginning of the next decade.

This time, Daimler is ready to defend its turf from Tesla

But why roll this thing out in the last week of July? My sense is that Daimler -- the world's oldest automaker (with Mercedes-Benz), and the world's largest manufacturer of heavy trucks -- is showing its investors that it's ready for the latest iteration of Tesla's "master plan."

A week before the Urban eTruck was revealed, CEO Elon Musk revealed his "master plan, part deux" -- essentially, the next stage of Tesla's business plan. Among other things, it included a reference to an upcoming "Tesla Semi," a heavy-duty truck that Tesla expects to unveil sometime next year.

It's already known that Mercedes-Benz (the car business) is planning a major assault on Tesla's monopoly of the "premium electric vehicles" segment. It's expected to reveal the first of (at least) four all-electric Mercedes-Benz vehicles at the Frankfurt Motor Show in September. The success of Tesla's Model S caught Mercedes and its German luxury rivals somewhat by surprise, and it has only recently began work on a serious response -- years after Tesla established a foothold on Mercedes' luxury-car turf.

I think Daimler wanted to make it very clear to Tesla (and its own investors) that it's not going to make that mistake again, that it's already developing its own electric heavy trucks -- and that this time, it will aggressively defend its market-leading position.

In other words, game on: It's your move, Tesla.

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John Rosevear has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.