Cat's New Hybrid and ROI

April 11, 2013

There’s an old adage in Journalism that says, “If your mother says she loves you, check it out.”

These are words we live by here. It’s the reason we edit material from manufacturers and why we do exclusive Field Tests (photo above) and evaluate iron. It’s why we’ve been checking out Cat’s 336E H Hybrid excavator.

Cat says the 336E H will lower fuel consumption up to 25 percent compared the conventional 336E and up to 33 percent over the 336D, with a payback against an additional purchase price in as little as a year to a more typical year-and-a-half, depending on fuel prices and application. Pretty heady stuff.

The unit utilizes engine power management through a programmable electronic pump, and restriction management via a patented “Adaptive Control System” valve, then reuses energy via the hydraulic hybrid swing, capturing the excavator’s upper structure swing brake energy in high-pressure accumulators containing nitrogen gas. It releases the energy during swing acceleration.

But will there be enough ROI for you? The fuel savings benefits come at a price that will be typically 9 percent over the regular cost of a 336E, according to project leader Ken Gray, Caterpillar’s global product manager for large hydraulic excavators.

That doesn’t seem like much when you’re talking about the fuel savings Cat is talking about, but let’s be careful to add a market perspective to it.

As many buyers know, Cat excavators are already considered premium machines and are often priced above other brands. So that 9 percent can quickly become 14 to 19 percent over what you’re used to paying if you’ve never been a Cat owner. Theoretically, the time before you get your payback could be longer going from another brand to the Cat hybrid.

Then there is maintenance. While the new hybrid uses proven components and there’s beauty in the system’s logic and simplicity (no electric motors), the accumulator will need an overhaul at approximately 5,000 to 6,000 hours (roughly the same timing as the boom cylinders).

What will that overhaul cost you over your entire ownership of the machine, on top of regular excavator maintenance involving the usual suspects such as the engine and the tracks? This is something to research and consider.

I’ve stayed away from hybrid cars so far because I don’t know what maintenance problems or costs may lurk over time. Will the new systems last?

When I see many Toyota Prii (I didn’t make up that word) achieving 15 to 20 years on the road like I routinely see older-model Camry’s or Honda Accords with conventional engines and drive trains, I’ll know there’s probably not much of an issue. Call me cautious (or call me a dinosaur, I don’t care). There are a number of you apparently taking the same cautious view of maintenance for Tier 4 technology, by the way.

All this said, I have to offer full disclosure: I once worked for a Caterpillar vendor and I’ve seen firsthand how Cat communicates value to customers. They tout quality, owning and operating costs over the life of the machine, and resale value into one big package of life-cycle costing, showing the math that makes it possible to take a long-term view beyond the initial purchase price.

They also hammer home the value of their dealer network. You know great dealers help keep you in business; that’s nothing to gloss over.

In all, it’s a pretty effective sales technique I’m sure many of you have heard: “We may be higher out of the chute, but here’s what you’re really getting over time and what it means for you.”

Indeed, Gray’s recent pitch to industry journalists was seemingly targeted right at asset managers. “It’s all about reducing owning and operating costs for our customers while maintaining production and performance,” Gray says. “High-hour users can see payback in as little as one year.”

Cat went on to detail their extensive testing and returned to the “high-hour users” and “high-production application” themes a few times. This is the key.

“If it is two or more years before you see payback [on the additional price], you’re not using it enough,” Gray says.

Simple premise. If you’re not deep in the dirt with it every day, the 336E H probably isn’t for you. If you’re all about generating “footage,” as one of the independent union operators told us during our exclusive Field Test of Cat’s hybrid, you might have a breadwinner. Particularly if you’re going from Cat excavator to Cat hybrid excavator.

(Look for the results of our Field Test on the 336E H, and more analysis from our independent operators, online and in the June issue.)

Just like you do every day in various cost calculations, do the homework to make sure there’s a proper—and timely—payoff for you and your organization before taking the plunge.

Seems like Cat has done theirs.

About the Author

Frank Raczon

Raczon’s writing career spans nearly 25 years, including magazine publishing and public relations work with some of the industry’s major equipment manufacturers. He has won numerous awards in his career, including nods from the Construction Writers Association, the Association of Equipment Manufacturers, and BtoB magazine. He is responsible for the magazine's Buying Files.