2007 was a watershed year for the development and deployment of hybrid trucks in North America. Several truck makers introduced medium-duty hybrid chassis that are or will be in full production in 2008 to be followed shortly by their heavy-duty counterparts. At the annual Hybrid Tuck Users Forum (H-TUF) last fall, 19 different hybrid truck models were on display, and as the year closed more than 350 were in service at some of the nation's largest and most progressive fleets, including FedEx, UPS, Coca-Cola, Pepsi, Purolator Courier,, U.S. Postal Service, DHL and others. Add in the growth in hybrid transit buses, school buses and light-duty vehicles and the power shift picture becomes more interesting still. Hybrid vehicles are clearly here to stay and for good reasons.
“Hybrids offer an immediate solution for reducing petroleum use and greenhouse gas emissions,” says Rachel Beckhardt, project analyst, corporate partnerships at Environmental Defense (www.environ mentaldefense.org). “Fuel economy gains of up to 30 to 50% are possible now. They do not require a new infrastructure to be built, and they do not need further study to determine their environmental impact.”
“Three major factors will drive hybrid adoption,” notes Joe Plomin, vp-truck for ArvinMeritor (www.arvinmeritor.com), “the need to dramatically reduce greenhouse gas emissions, the fuel economy benefits and, perhaps most of all, the improved performance and functionality hybrids can offer.”
SWEET AND LOW: M-D APPS
All of these benefits are the ripest and easiest to pick in the medium-duty truck marketplace. Particularly in applications like pickup-and-delivery, refuse, utility trucks, small construction vehicles and vans (not to mention buses) the stop-and-go duty cycles that are so inefficient for combustion engines are the sweet spot for hybrids, which capture and store the energy usually lost during braking.
“When it comes to our new T270 medium-duty hybrid, the more stop-and-go performance, the better,” says Kenworth Truck chief engineer, Mike Dozier (www.kenworth.com). “During steady driving conditions above 30 mph, the T270 operates like a standard diesel vehicle with all power coming from the engine. Below 30 mph, it uses a combination of diesel and electricity. The goal for the T270, which is expected to be in full production this year (as is the T370 Class 7 hybrid), is to improve fuel economy by at least 30% in these stop-and-go applications.”
International Truck and Engine (www.internationaltrucks.com), introduced their production model, medium-duty DuraStar Hybrid in November 2007. According to the company, the new diesel-electric vehicle can deliver fuel savings from 30 to 40% in standard in-city, pickup-and-delivery applications and as much as 60% in utility applications where the engine can be shut off and electrical power used to operate truck-mounted equipment, like overhead utility booms.
“Just about any urban or suburban application, from wreckers to delivery trucks, represents a great hybrid opportunity,” observes Jim Williams, director of sales and distribution, new products at International. “We can't handle big tandem dump trucks right now, but little dumps like you see in landscaping operations are a great application for hybrids, as are other smaller construction and utility vehicles.”
“Since July 2007, when we went commercial with production of our electric hybrid system for medium-duty vehicles, we have been getting an extremely, extremely high level of interest in hybrids,” notes Ken F. Davis, vp & president, light & medium duty transmission division, truck group of Eaton (www.roadranger.com), which is currently supplying hybrid systems to Freightliner, International, Kenworth and Peterbilt. “Now we are trying to turn that into market demand.”
In the case of hybrid vehicles, creating market demand is largely about building production volumes in order to achieve some economies of scale to drive down costs. A number of financial incentives currently exist to help bridge the gap (see “Sweetening the hybrid deal,” page 56), but manufacturers have stayed focused on developing a value proposition for hybrids that requires no outside support.
“Our goal is always to develop a stand-alone business case,” says Bill Kahn, manager of advanced concepts for Peterbilt Motors (www.peterbilt.com), which introduced its own diesel-electric hybrids (the medium-duty Models 320, 330 and 335 plus the developmental heavy-duty Model 386 hybrid) in 2007. “We are using Eaton's system, for example, because it is available in the market already and will help reduce cost. We are also working with the EPA to do some real-time testing to quantify the fuel economy and emissions reductions benefits in specific applications, as well as some of the other benefits hybrids can bring to a fleet,” he continues.
“When you have a hybrid system, for instance, you don't need a separate idle reduction system; you already have electrical power onboard. This is enabling us to add more components that are optimized to run on electricity, like HVAC systems. Driving systems with electricity rather than off the engine can be quieter, more efficient and reduce maintenance,” Kahn says.
Today, the batteries are the most expensive part of a hybrid system in terms of both cost and weight. So developing better, less costly energy storage solutions — battery-based or otherwise — is generally seen as key to creating a compelling value proposition for hybrids. “Better batteries will unlock hybrids,” says Eaton's Davis. “Now batteries add a lot of expense. They're a limiting factor.”
As suppliers and OEMs explore various available battery options for hybrids, all-electric vehicles and idle reduction systems, several companies are already racing to bring the breakthrough battery technology to market, whether it is a next-generation lithium-ion battery or a new take on the recyclable nickel metal hydride batteries that are the power storage system of choice in many hybrid buses.
One such company is Firefly Energy (www.fireflyenergy.com), a spin-off operation that began as an R&D project at Caterpillar in 2002. Company founders believe their entirely new take on lead acid batteries has much to offer trucking. While Firefly's first “Oasis” brand battery is designed to be used primarily when the truck's engine is off as part of an idle reduction solution, the new technology is attracting the attention of hybrid suppliers, too, because of the battery's light weight, energy density, performance and lower cost.
Mil Ovan, one of the company's founders, says the new technology replaces the metal grids found in conventional lead acid batteries with lightweight, high surface area, noncorrosive carbon foam. “Replacing that metal grid in successive stages with carbon foam material means we can make the battery chemistry act more efficiently,” he says. “That enables us to make batteries that are smaller and lighter than current lead acid batteries or keep them the same size and deliver much more power.
“Customers and manufacturers alike have been haunted by a poor cost-to-value equation when it comes to battery technology,” Ovan adds. “This solution drives right between those two extremes. We are using a proven technology that is much more affordable, has a good manufacturing base and recycling base already in place, and yet delivers superior performance.” Fleet owners will have the chance to see for themselves later in the year when full production is scheduled to begin.
SEIZING THE MOMENT
Getting more fleets to give hybrids a try is what will really ignite the hybrid market once and for all, hopefully in time to help dramatically reduce the carbon dioxide emissions fueling global climate change. “We have an interesting scenario ahead of us,” observes International's Williams. “Getting customers to buy hybrids is the challenge. The feedback we are getting on our hybrid is very positive; drivers and fleets like it. It is a very friendly technology that requires no new infrastructure,” he explains. “Just the business case still needs to be addressed. So much funding, looking back, has been for R&D and for technology development. Now that the industry has a solution [hybrids], I hope we can direct some of that funding toward getting them on the street.”
“Even though hybrids are still more expensive than their nonhybrid counterparts, we are starting to see companies large and small make the investment to include hybrids in their fleets,” notes Alexis Coffey, manager of medium-duty, product marketing for Daimler Trucks North America, which earlier introduced a hybrid walk-in van and bus and has begun building a new medium-duty hybrid, the Freightliner M2, scheduled for full production at the end of 2008. “They are making a statement and a commitment to the welfare of future generations.”
One such fleet that has decided to seize the hybrid moment is Wal-Mart. The company has been collaborating with various development teams to validate the benefits of using a hybrid system for longhaul applications, including a joint development project with Peterbilt and Eaton and a project with ArvinMeritor, which is based on an International ProStar tractor and powered by a Cummins engine.
“I admit we were a little skeptical about Class 8 over-the-road hybrid applications when Wal-Mart first approached us about the project,” recalls Vern Caron, director of commercial vehicle electronics at ArvinMeritor. “In P&D operations, you can probably hit 40% fuel improvement. With a Class 8, it is probably more like a 15% improvement in fuel economy, but 15% across 120,000 miles of operation per year can be very significant. It translates into a savings of about 2,700 to 3,000 gallons of fuel per vehicle per year. At today's fuel prices, that results in a payback period of two or three years, while contributing to a cleaner environment at the same time.”
“Executives are seeing shareholders demanding more in terms of environmental stewardship,” observes Dr. Walter G. Copan, executive vp, North American Operations, and chief technology officer for Clean Diesel Technologies (www.cdti.com). “Shareholders want to know about the impact of their business on the world as well as on the bottom line. As a result, fleet competitiveness is being played out in new ways. It is a great time and a great reason to take a leadership role,” he says.
Sweetening the hybrid deal
The up-front cost of purchasing a hybrid vehicle is the real sticking point for many fleets that would otherwise be willing to give the technology a try. While the value proposition for hybrids is improving rapidly — many truck OEMs expect the payback period to shrink to inviting levels by 2010 — the financial incentives currently available from several sources are helping to make it easier for companies to invest in the future today.
“Bringing hybrids to market has been a chicken and egg sort of thing,” says Jim Williams, director of sales and distribution, new products at International Truck and Engine. “The industry has to get the volumes up to bring the costs down. Financial incentives, particularly the up to $12,000 federal tax credit available for purchasing qualifying commercial hybrid vehicles, has been a great help in this regard and the easiest paperwork to process. There are also incentives available from some states, regions and municipalities, however, that can provide considerable financial support to the right fleets.”
Environmental Defense, a national nonprofit organization that works through various partnerships to create breakthrough solutions to serious environmental problems, has been working to make finding and applying for those incentive funds easier. Their Financial Guide to Hybrid Incentives was developed to connect fleet owners and managers with the various federal, state, regional, municipal and other financial incentive programs available.
Here are some of the most significant funding sources listed in their guide. Application periods tend to have an opening and a closing date, so it pays to plan accordingly — especially in the case of state programs,
Federal Alternative Motor Vehicle Tax Credit: Established under the Energy Policy Act of 2005 and available through 2009, this program provides tax credits of up to $12,000 to buyers of qualifying commercial hybrid trucks and other heavy hybrid vehicles. The current list of qualified vehicles is available on the IRS website (www.irs.gov). Type QAFMV into the search box in the upper right of the IRS home page to bring up the list.
California Carl Moyer Memorial Air Quality Standards Attainment Program: Provides incremental emissions reduction project funding to qualifying fleets with at least 75% of their vehicles' miles traveled in California.
Connecticut Clean Fuel Vehicles: Provides incentives to public entities, such as municipal utilities, that want to add clean fuel vehicles, electric vehicles or hybrids to their fleet operations.
Louisiana: Alternative Fuel Vehicle Tax Credit: Provides income tax credit of up to 20% of the incremental cost of purchasing OEM diesel hybrid electric vehicle or alternative fuel vehicle to qualifying applicants.
New Hampshire Alternative Fuel Vehicles and Fueling Infrastructure: Any private sector company, nonprofit organization, municipality or state agency operating vehicles may request funding for up to 80% of the incremental cost of hybrid-electric vehicles, up to a maximum of $12,000 for vehicles 8,500 to 14,000 lb, and up to $80,000 for vehicles over 14,000 lb.
New York State Clean Cities Challenge: Provides up to 75% of the incremental cost of purchasing alternative fuel vehicles, including vehicles using electricity stored or generated onboard, to fleets of ten or more vehicles owned, leased or operated by businesses and corporations, municipal agencies, school districts and nonprofits. The Program Opportunity Notice for 2008 opens in April of this year.
Oregon Business Energy Tax Credit: Provides an Oregon tax credit of 35% to qualifying companies or organizations with programs to reduce fuel consumption and exhaust emissions.
Rhode Island Alternative Fuel Vehicle Tax Credit: Provides a tax credit up to 50% of the incremental cost of purchasing alternative fuel vehicles, including hybrids, to qualifying businesses that pay corporate or public service taxes in the state.
There are numerous other emissions reduction incentive programs that include hybrids in their scope, including several sponsored by the Environmental Protection Agency, Clean Air Communities and others. The influential WestStart-CALSTART Hybrid Truck Users Forum, Incentive Working Group also published an article in 2007 calling for more and better incentive programs to expand hybrid truck use (www.calstart.org/programs/htuf/hybrid).
”Take advantage of the ‘carrots' that are available now [for emissions reductions]” advises Dr. Walter G. Copan, executive vp, North American Operations and chief technology officer for Clean Diesel Technologies, “because you know the ‘sticks' will come, and then you'll be on your own.”
The heart of the matter
Hybrid powertrains are the beating heart of hybrid vehicles, the technology that makes the dual mode miracle happen. Companies like Eaton, Azure Dynamics, Enova Systems, ISE, General Motors, ArvinMeritor and their OEM and supplier partners are helping to enable the transportation industry to take an early leadership role in the global initiative to reduce carbon emissions. “We are proud of the fleets that are taking part in the development and deployment of hybrid vehicles,” says Ken F. Davis, vp & president, light & medium duty transmission division, truck group of Eaton. “We encourage other fleets to join in, test the technology today, and do the right green thing for tomorrow.”