The European truck industry stands at a critical turning point. Transitioning to zero-emission (ZE) trucks is no longer just a climate ambition. It has become central to preserving the sector’s long-term competitiveness. McKinsey identifies three interlinked pillars that must advance together: a competitive and broad ZE-truck offering, a robust charging and refueling infrastructure, and enabling conditions such as policy, investment, and coordinated action across the value chain.
European truck OEMs, long regarded as global leaders in heavy-duty vehicle manufacturing, employ more than 250,000 workers and anchor one of the continent’s strongest industrial ecosystems. Over recent years, they have rolled out a growing mix of battery-electric trucks (BEVs), fuel-cell trucks (FCEVs), and hydrogen-combustion models. Yet the transition is under pressure.
Market uptake is slower than required, and upcoming emissions standards mean OEMs risk substantial non-compliance penalties, estimated at more than €2 billion by 2030 if adoption doesn’t accelerate. Meanwhile, new truck registrations in the first three quarters of 2025 were 16 percent lower than in 2023, reducing manufacturers’ financial headroom for investment.
The stakes extend beyond decarbonization. A slow ZE transition could allow global competitors — particularly from China — to erode Europe’s market position. The heavy-duty trucking value chain, from component suppliers to maintenance ecosystems, depends on Europe remaining a front-runner.
The Three Pillars and Their Challenges
1. A Competitive ZE-Truck Offering
Europe currently has around 46 ZE-truck models on the market. Still, only about 30 percent of applications are competitive with diesel on total cost of ownership (TCO). These are typically short-haul and distribution routes in countries with favorable road-pricing or taxation systems. Most long-haul and cross-border operations still face a significant TCO gap — in some cases up to 50 percent.
Key cost drivers include high upfront vehicle prices, uncertainty about residual values, and deeply uneven incentive structures across countries. To reach cost parity, OEMs need to scale production, redesign trucks around ZE platforms, improve sourcing for batteries and hydrogen systems, and deploy automation and AI to reduce manufacturing costs and improve uptime.
2. Infrastructure and Energy Supply
Charging and hydrogen infrastructure are the most significant bottlenecks. Europe currently has fewer than 2,000 public truck-charging points. This isn’t very important compared to the hundreds of thousands of diesel stations available today.
To support ZE-truck uptake by 2030, the continent needs a 25-fold expansion of public charging, a 20-fold increase in depot charging capacity, and a five-fold increase in hydrogen refueling sites. This requires roughly €45 billion in infrastructure investments, not including grid upgrades or renewable-energy expansion.
Grid capacity is an equally critical constraint. Large depots may need multi-megawatt connections, new substations, or on-site battery storage. Faster permitting, long-term planning, and coordinated action among utilities, infrastructure operators, OEMs, and fleet owners are essential.
3. Enabling Conditions: Policy, Regulation & Market Coordination
Broad adoption depends on stable regulation and financial incentives. Consistent emissions standards, predictable toll and road-pricing frameworks, and targeted support for early adopters are needed. Smaller transport companies are the backbone of Europe’s freight sector (typically operate under tight margins and short contract cycles). They will only adopt ZE trucks if financial risk is minimized.
Coordination is equally crucial. Shippers, carriers, energy providers, and governments must align investments. Rapid adoption creates a virtuous cycle: more ZE trucks increase infrastructure utilization, lowering costs and accelerating further adoption.
If Europe executes the transition well, it can preserve industrial leadership, protect high-value jobs, and shift profit pools toward new services such as charging operations, fleet-energy management, and digital maintenance. If it fails, it risks losing ground to global competitors and facing escalating compliance costs.
Implications for the Logistics Sector
- Fleet operators: should evaluate ZE deployment now, especially for regional and urban routes where TCO parity is near.
- Shippers: can drive adoption through multi-year contracts and clear decarbonization requirements.
- Governments: must streamline permitting, upgrade grids, and stabilize incentives.
- Urban freight planners should integrate depot charging, public truck charging, and hydrogen corridors into city logistics strategies.
- Researchers: must adopt system-level analysis linking vehicles, energy, infrastructure, policy, and business models.
Conclusion
Europe’s ZE-truck transition is both a decarbonization necessity and an industrial strategy. The window for leadership is narrowing, but the opportunity remains substantial. Success will require simultaneous progress in vehicle cost reduction, infrastructure rollout, and coordinated policy, and the logistics sector will be at the heart of that transformation.
Source: McKinsey
Also read: Energy Parity Will Decide Who Wins the Future of Electric Trucking