(Bloomberg) -- Allison Transmission Holdings Inc. introduced its first diesel-electric bus in the U.S. in 2003, when few hybrids were on the road beyond the Toyota Prius or Honda Insight. But the Indianapolis-based manufacturer still sees a long road to fully electric heavy trucks.
“We typically aim for a sub-two-year payback on our products. Imagine trying to sell an eight- to ten-year payback on a vehicle that may not be in use for that long,” David Graziosi, Allison's president and chief financial officer, said in an interview. “We see this more as a longer-term issue than as a medium-term issue.”
Tesla Inc. and closely held Nikola Corp. and Proterra Inc. all have ambitions to electrify semi trucks and buses more rapidly. Global sales may reach 371,000 electric trucks in 2027 from about 40,000 in 2017, according to a Navigant Research report cited by Bloomberg Intelligence. That would account for about 7 percent of sales.
“While Allison Transmission continues to invest in electrification, many of its key end-markets could be at risk,” Bloomberg Intelligence analyst Christopher Ciolino wrote in a report Friday.
Graziosi is slated to take over as Allison's chief executive officer on June 1, after current CEO Lawrence Dewey retires.
To contact the reporter on this story: John Lippert in Chicago at jlippert@bloomberg.net.
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Jamie Butters
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