TOKYO -- With the unveiling of the Tesla Semi in November, the disruption that electrification caused in the passenger car sector well and truly announced its entrance on the commercial vehicle scene.
Given the greater carbon dioxide emissions, the need for electric heavy goods vehicles is, if anything, even bigger -- as will likely be their impact on the market.
But developments like these are also likely to throw cold water on the stock prices of truck makers like Isuzu Motors -- long seen as a relative "safe zone" by investors.
Solid earnings results have pushed up Isuzu's shares roughly 20% since the end of September, comfortably outpacing the 8% growth in the Topix index of all first section issues on the Tokyo Stock Exchange.
Last month, the company announced that its consolidated net profit in the six months to September had surged 36% from a year earlier to 52.6 billion yen ($468 million), driven by recovery in demand for pickup trucks in the sizable Thai market.
For the current fiscal year through March 2018, Isuzu has raised its net profit forecast by 10 billion yen.
The stock price of competitor Hino Motors, on the other hand, has slid to six percentage points lower than the growth in the Topix index in the past three months. Operating profit in the April-September period stayed well below market expectations due to the costs of a large reorganization of domestic factories.
All this makes it easy to see why more investors have gravitated toward Isuzu.
Enter Tesla, with a prototype of its first electric semitrailer truck on Nov. 16 -- a vehicle that "will blow your mind clear out of your skull and into an alternate dimension," tweeted CEO Elon Musk.
More than anything, the price of the vehicle, which is slated to hit the market in 2019, has come as a curveball to most market watchers. At $180,000, the 500 mile (800km) range model is going to cost just 10% more than a comparable diesel vehicle.
U.S. retail giant Wal-Mart Stores said it has already preordered 15 of the trucks.
"Now that zero-emission commercial vehicles are providing new business opportunities, Isuzu also needs to step up its shift to cleaner trucks and buses," said Koichi Sugimoto, senior analyst at Mitsubishi UFJ Morgan Stanley Securities.
For its part, the company seems to have realized it cannot afford to idle. In 2018, it will launch an electric light-duty truck based on its midsize N-series. "We want to propose this electric truck as a vehicle used for limited purposes," said President Masanori Katayama, "and then add more models to our lineup through dialogue with our customers."
The company envisions the vehicle running along predetermined routes and being used for specific purposes, such as garbage collection or store deliveries. "Eco-friendly vehicles should extend beyond electric models to include other types," Katayama said.
Isuzu remains committed to offering a variety of clean vehicle options, including hybrids and the Giga series heavy-duty trucks that run on compressed natural gas it released in fiscal 2015.
The stock market has so far been cool in its response to the changing landscape. There are many hurdles to clear before electric heavy-duty trucks become commonplace -- their batteries are heavy and there are issues with capacity of load and range.
Many analysts, including Sugimoto, now agree that the shift from diesel to electric trucks will not happen overnight.
The adoption of electric passenger cars, in contrast, has moved faster than expected. As a result, automaker stocks have been traded as theme-based issues that tend to move on the back of excessive expectations or concerns. This makes it difficult for investors to buy or sell using traditional indicator data, according to Toshihide Kinoshita, senior analyst at SMBC Nikko Securities.
The stocks of truck makers have been perceived as relatively safe since electrification has not affected their movement to date. That safe zone, however, might not be all that safe for much longer.