Infrastructure remains the biggest speed bump slowing down the decarbonization of the trucking sector. That led a trio of companies -- Daimler Truck North America (DTNA), NextEra Energy (NEE 1.01%), and BlackRock (BLK +0.00%) -- to form a joint venture (JV) last year to address this issue. They recently unveiled the name of their JV -- Greenlane -- and provided some additional details about their plans.
Greenlane can potentially supercharge growth for electric vehicles (EVs) by eliminating a key issue holding back their greater adoption. Here's a closer look at Greenlane and how it could boost demand for zero-emission vehicles.
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Getting Greenline off the ground
DTNA, NextEra Energy, and BlackRock are investing more than $650 million into Greenlane. The JV will design, develop, install, and operate a network of zero-emission public charging and hydrogen fueling stations across the U.S. Greenlane's initial focus will be to support battery-electric medium and heavy-duty vehicles. It also intends to build hydrogen fueling stations for fuel cell trucks. Greenline ultimately plans to provide access to this infrastructure for light-duty vehicles.
Greenlane will build a network of charging sites on crucial freight routes along the East and West coasts and in Texas. It plans to utilize existing infrastructure and amenities where possible while building new sites to fulfill eventual customer demand. The partners hope to have the initial infrastructure built out by 2026.
Greenlane's first site will be in Southern California. It has acquired several additional sites along major freight routes.
A mutually beneficial partnership
Greenlane will uniquely benefit its JV owners, which all bring distinctive expertise to the partnership. DTNA manufactures medium and heavy-duty trucks. Because of that, it has expertise in how to serve that market. It will also likely see accelerating demand for the trucks it makes as more charging infrastructure becomes available.
NextEra Energy is a leading clean energy infrastructure company and renewable energy producer. "Greenlane represents an important investment" for NextEra, stated Rebecca Kujawa, the CEO of its energy resources segment. She noted the JV will leverage the company's "market-leading experience in energy, analytics, and infrastructure development to deliver end-to-end networking charging solutions through our NextEra Mobility subsidiary." It will also help boost the company's renewable energy operations, which will power the charging infrastructure.
Leading asset manager BlackRock can leverage its access to institutional investors to bring capital to the charging infrastructure sector. Institutional investors are increasingly seeking to invest in opportunities to accelerate the energy transition. BlackRock provides them access to this opportunity through a fund managed by its climate infrastructure business.
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Greenlane will also benefit other companies involved in the EV sector. As Greenlane deploys more charging infrastructure, it will eliminate one of the biggest obstacles to the adoption of electric trucks. Because of that, it will make it easier for operators to shift to electric-powered fleets in the future, accelerating demand for electric-powered trucks. That should benefit companies developing electric-powered semi-trucks, like Tesla and Nikola Motors.
Electrifying the trucking sector could also have a huge positive effect on the environment. It's a significant emitter, driven by long-haul trucks, which contribute over 20% of the transportation sector's emissions. While only 14% of the medium and heavy-duty vehicle market, long-haul trucks contribute 40% of that segment's emissions. Infrastructure is the key to solving this problem. It would enable the trucking industry to power more of its long-haul fleets with electricity, which has no emissions if generated by renewables.
Putting a charge in EV demand
Greenlane aims to accelerate the buildout of infrastructure crucial to supporting zero-emissions vehicles. That will help remove a roadblock hindering EV adoption, especially in the trucking industry. It could accelerate EV adoption and provide a big boost for electric semi-truck makers in the coming years. That makes it an important partnership for EV stock investors to watch.
