Small Fleet Management Workshop
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1 Small Fleet Management Workshop Advanced Transportation Technologies Clean Transportation Solutions SM Susan Romeo Director, Marketing and Communications July 2007
2 Mission Statement WestStart-CALSTART is dedicated to the growth of an advanced transportation technologies industry that will: Create high-quality jobs; Clean the air; Reduce dependence on foreign oil; and Prevent global warming
3 WestStart-CALSTART s Unique Position WestStart-CALSTART is in a unique position to monitor and support the advanced transportation technology industry Close to end-users / understand the day-to-day issues and challenges facing fleet managers Work closely with companies developing state-of-theart technology we know what s being worked on, where the technology is today, and where it may be tomorrow Helping companies today to sell advanced vehicles and fuels aware of the challenges of today s marketplace Healthy relationships with policymakers at federal, state, and regional levels strong sense of where regulations are heading No other organization has this array of relationships
4 WestStart-CALSTART Focus Areas (current programs) Poly-fuel; poly-technical Vehicles and Technologies Hybrid Truck Users Forum National Fuel Cell Bus Tech Program LNG and Hybrid Electric Yard Hostlers Consulting Services Fleet AFV Choices Strategic Partnering Market Analysis 5-Year Goal: To Develop Vehicles, Fuels and Systems that Can Reduce Petroleum Use 20% by 2020 New Fuels CA E85 Network Biomethane Task Force Hydrogen Biofuels Innovative Mobility Bus Rapid Transit First Mile MyGo-Pasadena Bikestation Seattle Industry Support Participant Program Technical Advisory Committee Conferences Publications Policy California Secure Transportation Energy Partnership HTUF Incentives WG
5 Trends Affecting Fleets Rising fuel prices Government regulations requiring decreased emissions cleaner engines, cleaner fuels, idle management laws Fuel efficiency result of desire to decrease costs of fuel in business operations Global concern about climate change impact of CO2 build-up in environment Some fleets going carbon neutral
6 Why Hybrids Are Gaining Traction with Fleets Rising fuel costs: Optimizing urban truck drivelines is becoming critical for fuel efficiency, emissions Major engine changes and increased cost/complexity coming in to comply with EPA emissions requirements Trend toward integrated engine/drivelines in trucks Increasing electrical power needs in heavy vehicles and equipment Idle Management is a growing issue Productivity/performance complaints from cleaner engines
7 Current Development Status Most major truck and engine makers developing hybrids: International, Peterbilt, Kenworth, Mack, Volvo, Freightliner, Oshkosh, Ford (with Azure), Caterpillar, Hino, Isuzu Several major system makers moving into or toward commercial production: Eaton, Allison, Azure, ISE, Enova, Bosch-Rexroth, Arvin-Meritor, Parker, BAE, Lockheed Major first-mover US fleets starting to adopt early units Still strongly US/North American technology leadership - but not assured
8 Recent Heavy Hybrid News International launches first hybrid production: Sept 2007 Peterbilt testing Class 8 hybrid with Eaton system ArvinMeritor signs WalMart agreement for Class 8 hybrids Oshkosh unveils hybrid refuse truck at HTUF meeting Peterbilt introduces Class 7 hybrid truck for customer trials International builds its first production-line hybrids in Nov 06 Freightliner unveils Class 7 utility hybrid truck on M2 chassis IC/Enova roll out hybrid electric shuttle bus Azure agreement with StarTrans on producing hybrid shuttles Eaton developing hybrid system for Class 8 OTR trucks UPS testing advanced series hydraulic hybrid prototype Bosch-Rexroth buys Dana hydraulic hybrid drive unit Misubishi-Fuso Unveil Hybrid work truck (Cl 4-5 delivery) Wright Group, ISE building 50 advanced hybrid buses for Las Vegas (62-foot articulated series drive) Volvo announces hybrid heavy trucks for 2009 production Peterbilt completes second hydraulic hybrid refuse truck
9 Timeline to Commercialization: Hybrid Tech Still Early in Trucks Development Pre-Production Production Intent Test prototypes and systems Field pilot assessments (10-50 vehicles) Assembly line builds of 100+ Early Production Initial commercial volumes still high incremental cost TOOLS: R&D Support Pre-Production Deployment Support (HTUF) Purchase Incentives
10 Conclusion: Status of Hybrid Truck Development Not Yet at Tipping Point for hybrid commercialization but making strong progress Have sped commercialization process by 1-2 years Two truck makers entering production-intent manufacturing process Still behind automotive curve but business case is driver Need assistance to cross cost gap to first production Must increase early volumes Hybrids are one of several critical wedge strategies to boost fuel economy, reduce GHG First targets urban vocational trucks Will likely also have Class 8 impacts Enabling technology for many future advancements Expect yearly volumes to exceed 1-2-thousand in next 3 years Need targeted incentives: Federal and State Partnership of fleets, manufacturers and government Structured to work in commercial, not consumer, market Also need regional incentives and aligned incentives across regions
11 Hybrid Truck Users Forum (HTUF) User-driven process to commercialize medium- and heavy-duty hybrid trucks in North America Joint WestStart-U.S. Army program (RDECOM-TARDEC-NAC) Also supported by Hewlett Foundation, DOE HTUF focuses on commercializing hybrid trucks with dual-use benefits Speed commercialization and reduce overall costs by creating common fleet requirements, joint purchase commitments, increasing volumes
12 HTUF Moving Rapidly Working Group Activities Utility Vehicle All 24 International/Eaton trucks deployed; data being gathered Trucks generally operating well and with excellent user acceptance Data acquisition system issues have caused delays in getting viable performance information Preliminary fuel economy improvements 9 55% depending upon duty cycle; some vehicles being moved to better applications Subsequent 100 truck production-intent order filled by International trucks delivered by summer International/Eaton early production then to begin this fall (capacity 1000 trucks/year to start)
13 HTUF Moving Rapidly Working Group Activities (continued) Refuse Vehicle RFP responses due mid-may Targeting 10+ pre-production trucks Hydraulic Hybrid Parcel Delivery Revised RFP being developed Hydraulic tech not as far along as hoped Small Bus Spec info being gathered from fleets Plug-in Hybrid Truck (PHET) Successful workshop at CHDV conference in Feb. Next steps Develop a PHET business case Define best target vehicles and applications Select fleets and regions that can be first-movers
14 HTUF Moving Rapidly Working Group Activities Incentives WG Effort launched after HTUF & CHDV conference feedback Initial focus is to motivate IRS to act on EPAct 2005 Heavy Duty Hybrid Tax Incentives Secondary focus is improving future incentives More than 50 involved companies: fleets, manufacturers Class 8 Over the Road and Regional Delivery Being initiated after announcements by Eaton and Arvin Meritor concerning their hybrid development work with Wal- Mart Cooperation with EPA SmartWay Program Preliminary interest now expressed by FedEx Ground, UPS, Purolator, Westar Transport, ConWay and Wal-Mart
15 Hybrid Business Case Operational Savings Fuel (the higher fuel goes, the shorter the payback) Maintenance Extended engine life Productivity Gains Faster Launch from Stop, More Effective Braking Idle Reduction engine shut off Emission Reductions Incentives EPAct HD hybrid incentives Regional/state funding grants and incentives
16 Hybrid Choice Criteria Know your duty cycle (driving and work components) Type of driving Idle time, in traffic and work site Understand your key costs Fuel and fuel delivery Maintenance What is value of performance gains to your mission? More pickups per day? Quiet operation at work site? Additional emission reductions? Payback should be looked at based on total cost of ownership, not simple payback Leadership
17 What s Needed? Trucks are different than passenger cars! Hybrid concept similar; business case, volumes and technology availability different No commercially available electric steering, braking, HVAC Development transition 5+ years behind Industry could benefit from: support for R&D energy storage, electrified components; funding to field pre-production fleets ( vehicles per application); enhanced commercially-focused purchase incentives Purchase incentives need to last longer, provide assistance to broader range of fuel economy benefits First-mover fleets ideally need up-front purchase cost reduced (tax credits not ideal tool for commercial vehicles)
18 EPAct National HD Hybrid Tax Credits Administered by the IRS Available to fleets who buy, lease qualifying vehicles Credit is based on weight of vehicle and fuel efficiency gains of hybrid system Provides increasing credit for greater efficiency Limits incremental cost in calculating credit; increases with weight Credit available for five years starting in 2005; available through 2009 Vehicle weight Maximum Tax Credit for 30% Fuel Economy Increase* Maximum Tax Credit for 40% Fuel Economy Increase* Maximum Tax Credit for 50% Fuel Economy Increase* 8,501 14,000 lb $1,500 (based on 20% of incremental cost of $7,500) $2,250 (based on 30% of incremental cost of $7,500) $3,000 (based on 40% of incremental cost of $7,500) 14,001-26,000 lb $3,000 $4,500 $6,000 >26,000 lb $6,000 $9,000 $12,000 * based on maximum qualified incremental cost
19 California: Carl Moyer Program NOTE: this is not just for hybrids; for all AFVs Administered by local air districts; apply through them, CARB Fleets should have at least 75% of the vehicles miles traveled in California; local air districts have other operation requirements too Funding is for incremental costs; some local air districts set maximum award caps Primary selection criterion: cost-effectiveness (annual cost of project divided by annual emissions reductions) Hybrid trucks must be CARB certified interim certification procedures
20 Partnership to Make Incentives Stronger CALSTART Environmental Defense Fund HTUF Incentives Working Group Initial focus is to motivate IRS to act on EPAct 2005 Heavy Duty Hybrid Tax Incentives Secondary focus is improving future incentives More than 50 involved companies: fleets, manufacturers Contact: Bill Van Amburg Hybrid Trucks Financial Incentives Guide
21 HTUF National Meeting 2007: Seattle Partners with Clean Vehicles Now! Join us in Seattle September day event Features light-duty on day 1 as part of Clean Vehicles Now! HTUF National Meetings day 2 & 3 Technology and market progress Incentives getting special focus Special session on regional hybrid coalitions and incentives HTUF National Meeting Host/Sponsor: Meetings and HTUF Ride and Drive at Qwest Field Co- Sponsor:
22 Clean Transportation Solutions SM Advanced Transportation Technologies SM
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