United Parcel Service this week is rolling out 200 new hybrid gas-electric delivery trucks in eight U.S. cities. Over the course of a year, the 200 new hybrid trucks are expected to reduce fuel consumption by roughly 176,000 gallons and cutting CO2 gases by nearly 1,800 metric tons.
The move by UPS is part of a growing trend, identified in a new report from Pike Research about the global market for hybrid medium and heavy-duty trucks and buses. Pike forecasts an increase from 9,000 vehicles sold globally in 2010 to more than 100,000 vehicles in 2015.
In the U.S., Pike expects annual sales of electric-drive trucks to grow from 3,700 today to more than 30,000 in 2015. That would represent about 10 percent of the market. Dave Hurst, the author of the Pike study, told us that two-thirds of those sales will be conventional hybrids, and most of the rest will be pure electric trucks. “Plug-in hybrids are less attractive because the upfront costs are high, and there’s less saving on fuel,” Hurst said. “Fleet buyers don’t see the payback.” Hurst said that fuel costs are dramatically lower for pure electric trucks.
We spoke with Hurst to get a better understanding of the trend towards hybridizing trucks and buses.
HybridCars.com: What kind of fuel economy or emissions improvement do hybrid trucks and buses offer?
Dave Hurst: The fuel economy gains will vary substantially depending on the type of truck and its usage. Overall, the fuel economy gains can be expected to be between 5% and 50% for hybrid trucks and buses.
Is hybrid-electric the technology best suited to economical efficiency improvements?
At the moment, hybrid electric is the best suited to see a payback on the incremental costs in the truck and bus market, but payback periods on these vehicles remains relatively long, up to 10 years. As fuel costs rise, we will see the payback period reduced and the economic equation will shift more in favor of hybrids and plug-in hybrids.
Battery electric trucks will offer a very attractive economic equation in specific situations as battery costs come down in 2012 or 2013.
How long will hybrid-electric trucks be dependent on government subsidies? [Note: Federal tax credits can be $10,000 or more for a truck selling for about $100,000. With state incentives, the subsidies can cover the incremental cost of a hybrid truck compared to a conventional diesel version.]
The subsidies will continue to be very important through at least 2013 or 2014. After that, it will depend on how quickly battery costs fall. I anticipate that we may see some of the smaller trucks—roughly up to 14,000 or 16,000 pounds—tart to be viable without subsidies in 2014 or 2015, though it’s likely that the heavier duty trucks will still need subsidies.
Do you see the market for hybrid-electric trucks and buses flattening out after 2015?
It is likely to slow from its current growth rate after 2015, but I am not sure I would characterize it as flattening in 2015. As fuel and emissions control equipment costs rise mid-to-late decade, I expect that we will see continue to see growth in hybrid trucks and buses as replacements for diesels.