Electrification of forklifts and other off-highway industrial vehicles is accelerating with the advance of lithium forklift batteries. Li-ion batteries for lift trucks became commercially available as a drop-in solution. Today, many advanced models of lithium batteries offer CAN-integration with certain forklift and charger makes and models. Some OEMs introduce truck models with chassis-integrated lithium batteries. Which is the best option and which is going to become mainstream?
Watch Mark D’Amato speak at iVT Expo in Chicago on September 1st, 2022.
TRANSCRIPT. 20 min.
Thanks for having me today. Um, so, real quick. That’s what we build, lithium-ion batteries. We’re talking today about large spark ignition forklifts, Class 1, 2, and 3 material handling equipment.
We’re going to keep the focus narrow or at least for this conversation.
Um, how many of the group might be sales-oriented and everybody else is more or less engineering? You guys gotta hang in with me for about eight minutes to get to the cool stuff. Okay. Um, and the big joke for today is trying to forget that I’m a sales guy just for a little bit, right, because I’m gonna try not to litter with all this interesting info. So marketing and I got together, and we put together this little program while I was doing it, I realized that there is some history that would really make this impactful.
So I’m going to switch from a sails guide to a historian a bit here along the way.
So as we look at the chart, the middle graph is what we really care about right now.
And the important part is the electric sales versus the internal combustion sales right now.
And you’re looking at this from roughly 1990 to 2018 or 19. Um, also over here on the right,
we’re basically saying there’s a big spike coming, right?
Um, what I really want to do since next year is 20, I started way back in 1983.
So I’m gonna go a little bit left and give you some things to think about. Um, does anybody know if I asked you what are your forklift names? Do you know anybody? What forklift names would you throw out right now? Brand names?
Okay, so he knows a bunch. Right? All right, so back in the day, the forklift leader was Clark. Clark equipment was the big dog, right? You would also see Caterpillar, Tow Motor, Yale, Heister, maybe Crown, Raymond, Prime Mover, Barrett, Baker white, right?
We’re going back kind of far, you noticed that I didn’t mention Toyota or Nissan, or Datsun or Komatsu or Mitsubishi, and you may not know this, but the original Japanese manufacturer was TCM. And they started way back in 1949, Yale historically 1900s early, right?
Um, this is right before Toyota realized all that they sold were four-wheel pneumatic forklifts.
They didn’t have any electric products. Right?
So Toyota went out and bought Prime Mover, that’s how they got their electric line.
Nissan Datsun, there were import restrictions back then Nissan brought so many forklifts into the country under the Nissan name.
And when they topped out they just put Datsun on the counterweight and they brought a whole bunch under Datsun’s name. They didn’t have an electric line. They went and bought Barrett, right? So back then you could make an argument that the electric trucks couldn’t do the work of an IC Truck?
The whole point of this conversation right now is what’s happening?
What’s happening to the marketplace and why is everybody going away from internal combustion.
Okay, so the next slide is going to cover some of that. But back in that time frame, you would get into a serious argument with people because they would say an electric truck is not strong enough. It’s not capable enough. It will not replace an icy truck anywhere and it was true, right?
But our engineering friends, they got to work and they went ahead and they basically improved every part of the electric vehicle out there. Except for the power right there, still using lead-acid technology, which is arguably 100 to 140 years old, depending on which battery manufacturer you’re talking to. Right?
So fast forward to roughly 2000 the turn of the century. Now, you’ve got all the big names in play. They’ve all got electric lifts. You’re starting to see electrics replaced.
I see trucks in the marketplace, you’re still having that argument, but it’s starting to happen.
I did a lot of my work in California and Los Angeles. There are many places in the city where you can go and you can throw a stone and you’ll hit a building with 100 bay doors, right?
They’re not, I see anymore. And that’s when it started to change roughly 2000, and that started to change today. There isn’t an application that’s not an electric one.
OneCharge makes batteries for 3,000 30 70,000 lbs. forklifts. Right?
Most of those have propane or diesel in them. Those are history. We’re delivering some product right now, if you know that name, that’s a 30 or 40,000 lbs. lift with an electric lithium-ion battery in it. Right?
So that’s going away. That argument is done. It’s put to bed, there isn’t an application out there that doesn’t have an electric lithium forklift in it now.
Um, In terms of the improvements, the forklifts went solid state, they went a C and you know, around 2012, you started to see the lithium batteries show up, right?
Most people didn’t get aware until 2017, Um, I was still selling equipment 2014, I didn’t know anything about lithium-ion. And 2017 when I joined this company, everything flipped.
You know, back then there were four or five of us. Now there are almost 30 lithium companies on the market. Right?
The other thing to look at on the slide is, look what happened in the recession of 08 and 09. What people forget all the time is what we’re really selling in the lithium realm.
What’s happening to the marketplace is people are looking at their total cost of ownership.
And if you compare, I see two electric, you know, the internal combustion, you’ve got an engine transmission and differential to deal with.
You don’t have any of that. And a good comparison to do, to make it make sense is your cell phone. If you go back a few years, you remember with the original cell phones look like and how big and bulky they were and what you’re carrying in your pocket now, it’s a whole different deal.
Well in 2016 or 2017 you had a forklift that still had a lead acid battery in it.
And to me, I used to do the, I used to draw the analogy that you had a really cool iPhone 10, but it was powered by a nine volt. It was just sticking out in the back of the battery, right?
It just, you know, out of the back of the case. It just looked funny and it wasn’t up to date, it wasn’t up to speed with the technology when lithium showed up, it kind of fixed that.
So why OneChange now? Part of the history that I’m gonna show you here is what you’re looking at our energy related bills in 2022 on the graph and by color in the states?
Well, this inadvertently shows the transition, um, and how it captured the country along the way.
Right, lithium, you know, progressively started in California, Washington, Oregon.
It’s sort of hopscotch to the Northeast coast.
And if you look at this simultaneously, it kind of went from the Northeast across the top by the border and across the bottom by the border.
The gray states. They don’t really care from a legislative point of view yet.
They will and we’re selling batteries in those states, but they’re kind of behind the curve.
Right? So you can see what’s happening here, California. They put it out there anything under 12,000 lbs by January 1, 2026. They also last week put out there that no more. I see as of 2035.
I don’t know how they’re gonna do that honestly. But we’ll see. They’re pushing and shoving really hard to try to make that happen.
Okay, so factual information links are here. You guys to check it out if you want to. But that’s, that’s really what’s going on. It started on the west coast, jumped to the east coast, and moved across the top. Across the bottom. It’s happening in Canada. It’s happening in Mexico too.
And for us, it happens to be going on in South America but in a completely different market. Right?
Um, so why is it important?
Lead acid battery? You know, you could spend $40,000 on an electric forklift and put a battery in there. That was 5 to $7000. It’s not like that anymore.
Okay, a lithium battery can be 3 to 4 times as expensive as its lead-acid counterpart. It’s also expected to last 3 to 4 times as long as the lead acid battery. Right?
So you can’t be nonchalant about it.
You’ve got to take a look at what your power source is going to be Application is king, you want to find out what the application needs. Maybe a power study.
Somehow you’ve got to dial in what your consumption is going to be like and then you go ahead and choose the battery that works. But it takes a little bit of work, certainly consultative.
And it’s application driven.
Um, While we’re at it here, I want to throw some other names out at you that just happened, material handling and logistics just came out last week with the top 10 manufacturers in the forklift realm.
So because of that history, you guys got to keep in mind that all this has happened in the last 40 years, nothing happened at an electric truck until around the mid-80s and all of a sudden we did a complete transition from power because not only is their lithium, there’s fuel cells, right?
They’ve changed everything.
The truck redesign has happened at a really rapid pace. So right now the number one is Toyota, right?
You may know that name. Kion might not know that name. Kion, Linde, Jungheinrich, Crown, Mitsubishi, Heist retail group, Heli, Hangcha, Manitou and Komatsu, right?
Some of those names didn’t even exist in the early 80s. So it’s been a huge change going from them to now. So here’s the core of it.
What’s integrated, you know,
the original premise for this was, you know, is an integrated truck a trend or is it a niche market?
So there are a couple of definition issues we have right now in our marketplace because not everybody uses integrated and it means the same thing.
So in the OEM world, and I’m talking about those dealers, those manufacturers,
I just named, right, integrated means installed at the factory built, designed specifically for that particular model or groups of models or classes.
So the battery is part of the lift. It’s not generally sold separately, it may only fit in that particular model. Right?
So the trend part is pretty safe to say that every OEM. Is pursuing some version of this design in all three classes. Right?
So four-wheel and three wheels sit-downs, uh, narrow aisle equipment, reach trucks, order pickers and then class three pallet jack stackers, that kind of stuff.
There are two more definitions, unfortunately. So in the right box, you know, in the third-party world that would be me, you know, integrated generally means that there’s some sort of communication usually canvas between the OEM lift and the third party battery.
So the battery and the truck are talking to each other.
It’s usually just a state of charge. And the truck based on that state of charge of the battery makes decisions about whether or not to stop the lift whether or not to go from rabbit to creep whether to give, you know, disabled forward and reverse.
So the truck can’t drive off while it’s being charged, simple but effective. It’s better than not having it.
The discussion is happening where it also happens to mean a new drop-in battery installed
that the OEM dealer or the end user. Right?
So you’ve got a brand new chassis, it doesn’t have an OEM-built battery in it, but it’s got somebody else’s battery built in it.
Brand new, putting the truck tested commissioned right five years ago, there were maybe six or seven companies. Now there are better than 30 in this marketplace. Right?
So the bottom box, um, you know, there have been discussions during the ITA sessions Industrial Truck Association that are, we’re trying to tackle that very definition, right?
They’re both accurate, but ultimately we’ve got to pick what definition we’re going to use because the language is confusing to people.
They think we’re talking about an integrated truck and we’re not because there are three different definitions floating around.
ITA is also working on the idea of standardizing many components and the communication that works in and around the product to make it more universal and easier to adopt the right way.
So, we’re gonna show you Heister-Yale right now because we do a lot of work with them. But that’s not really the reason they have an integrated truck, the first definition and they also make the standard line that they’ve been making for 50 years where they can put our drop-in in it.
Okay, so the truck on the left is their new integrated XML model. This is a great truck.
They got lots of awards. Lots of awards in Europe for it.
They started out making a 5, 6, 7,000 lbs lift. And then they made the cushion version of that right now. So the rub is a limited number of models and options.
The factory is making it uh, they design essentially the truck around the battery.
So, if you look from left to right, you’re gonna see one is designed where the truck is built and the battery fits in this big space.
And if you look at the one on the left, the space is different in where the operator sits, the battery is lower to wider counterbalances handled differently.
And then you have the big brand warranty for the truck, battery, and charger on the right, you have the same version of that truck, but the old version that they’ve had for 50 years -ish, same basic idea.
They have a wide range of models and upgrades available. If there’s a third-party battery in it, there could be full integration where it’s talking to a truck, but not always.
And then the used batteries depending on how they’re sold or leased, you know, at the end of the life cycle, they’re, you know, they could be resold in the secondary market, right?
So, I’m gonna just continue to go down the list.
So, on the left side there, these are the comparison points that you guys are gonna care about,
the cost of that lithium-integrated truck is probably two times what a propane truck or an ICE truck will be like.
The chemistry, the chemistry that you use for the battery itself is going to be chosen by the OEM. The rate at which it charges is going to be chosen by the OEM.
The product lines, it’s a function of how new it is right now, there are only a few choices.
There are only so many people making this integrated truck, although everybody’s starting to work on it. Right?
Mostly 80-volt amps for our capacities are somewhere between 360 – 810 right now.
Of course, we said it’s built around the battery as opposed to the other way around Class 3 only.
You’re talking about pallet jacks mostly and walkie stackers where they might have a built-in 110 or 120 charger.
IP rating, ingress protection. Can you get it wet? Can you hose it down? Can you hit it with a pressure washer?
That’s pretty much cost three only right now. Right.
Data availability, telemetric data ready available Most of the OEMs have some program that they can pull down information that the end user can use and then service again if you buy an integrated truck, you’re pretty much stuck with that particular manufacturer because no one else is gonna be able to work on it.
So trending, yep, I say so it’s trending, how fast it happens is a different issue if you compare it with what’s out there right now, you know, you’re looking at the existing models for every manufacturer on the planet, right?
They’ve all got models in Class 1, 2, and 3. They’ve all got lead acid models that are existing. So all we’ve got to do is build one that will fit in that space and put it in and you’re good.
The next level of that is the integration I talked about, right?
The cost of the equipment itself, you know, can be twice as much again as an electric, um, as a propane truck or a diesel truck, but the cost of the battery against lead-acid is 2-3 times in some cases, 4 times what it might be.
Right. By the time it gets to the retail user, the good news is you get to choose your chemistry and you get to choose your charging rate.
Okay, you get to have some control over that.
So, as a salesperson, I’m going into an application, I’m trying to figure out what they need. I’m gonna figure out what they’re using, how much they’re consuming, how many shifts are they using.
And because I haven’t said it just part of the history.
The original target market for lithium products was electric lead-acid multiple shifts, multiple trucks, and multiple batteries per truck. And they were killing their batteries in 3-5 years.
The emerging market is this subject, right?
How do we get internal combustion to go right to electric lithium and skip lead acid?
That’s what we’re doing. Right?
So all the existing models currently in production, they’re out there, voltage ranges from 24 to 140 for typical most manufacturers are the 24, 36, 48. You’ll see some eighties.
Now we happen to do all of those and you know, depending on whom you’re talking to, they’re expecting it to go the direction of automotive where you could see much higher voltages and power ranges. Ampere/hour is somewhere between 805 and 1260, existing design, drop-in same issues with the chargers, Class 3 data availability. Not quite as cool as the forklift manufacturers yet.
We’re all struggling with connectivity, self-service, Wi-Fi service, that sort of thing.
But it’ll get better service.
Can come from two or three places, right?
The OEM or the forklift dealer that sells you the product or if you buy the forklift from place A and the battery from place B, the charger place C, you know, you’ve got three different service companies but you get to pick and choose whom you like and whom you want to work with.
So my conclusion is, yep, OEM integrated product is trending, but right now, and for the, for the foreseeable future here, uh, you’re gonna have considerably more choices.
Um, if you use the third-party battery scenario here and to go into the crystal ball here, I want to remind you that, you know, we’re talking about just forklift equipment right now.
So we’re sort of conjecturing, we’re going to see much higher voltages like in the automotive realm 4 to 600 volts, which means we’re gonna need a whole new range of electrical components.
The OEMs got their work cut out for them. They’ve got to re-engineer the electrical systems to reliably support voltages this high and make them serviceable in the field.
And until this is accomplished, I still think you’re gonna see drop-in solutions and will continue to lead in terms of the lower total cost of ownership, which is really what we’re selling at these days. Right?
And before I close it out, I want to make a couple of little comments. We didn’t touch AGVs, AMRs, MRTs, or Ground Support Equipment, Right?
And we haven’t talked about energy as a service or power by the hour. It’s totally conceivable for 10 years.
Your end users won’t even own the equipment, some leasing company will own it,
some dealers will own it and they’ll be paying for kilowatt-hour consumption monthly, right?
That’s where it’s heading. So that was the view in the crystal ball questions after you.
So it varies by the battery company, the third-party battery company who’s managing it, right?
So we have our own at OneCharge. But you know every company that I compete with, they have a version of their own product that they’re very similar but they’re not all exactly the same and it’s more or less proprietary.
So they have kind of a lock on their customer base when it gets out there. The integrated stuff.
One good thing about the integrated truck is where the manufacturer makes the truck, the battery, and the charger all work together really well, and the only slam if there is one against that product is the Ampere/hour capacities are too low.
So the BMS is all over the place, you know, and that some of the standardization that’s coming like you know everybody is using different connectors, you know they’re still using the SBS based on voltage but we’re getting into euro and Rima and it doesn’t look like the auto chargers and everybody’s like we need to pick something, right?
So there’s an ITA meeting end of the month in September and I know that in their general um
engineering meetings, you know we’re trying to grind out what’s going to be a standard as much as possible because we’re chasing automotive that way they’re much farther ahead.