Equipment Type

Hybrids and Alternative Fuels Can Save Money, If...

Toyota and its Prius, the country's best-known hybrid vehicle, have convinced many Americans that the clean-running, fuel-saving car, and others like it, will help clear the air and shake off dependence on foreign oil. What's true of the Prius and other hybrid autos is also generally true for hybrid systems in commercial trucks, except components are heavier and more robust, and they cost more.

March 01, 2008
Making a Business Case

The greatest obstacle to growth of hybrids is initial cost, which has raised a typical truck's price by 50 percent or more. This is because hybrid components, especially the lithium-ion batteries, are expensive.

Volume production should bring down prices, but in the meantime, upfront costs are hard to justify.

Dunn Lumber paid $20,000 extra for a Kenworth-Eaton hybrid upgrade, which is 37.5 percent of the T300's chassis price of about $75,000. It uses about 30 percent less fuel than a straight-diesel truck, which sounds good. Still, recovering the added cost from fuel savings alone will take a long time because the truck runs only 12,000 miles a year.

Fleet Manager Mark Geyer says the hybrid's getting 6.85 mpg in urban delivery around Seattle, which means it will consume 1,751.82 gallons over 12,000 miles. Other 32,000-pound-GVW trucks in the fleet net 5.03 mpg, burning 2,385.69 gallons a year. Multiply each by $3.25, which is about what Dunn has been paying for fuel, and the cost to fuel the hybrid is $5,693.43 compared to $7,753.50 for their straight diesel trucks.

The annual fuel savings is $2,060.06; and at that rate, it'll take 10 years to pay off the $20,000 hybrid up-charge. If the hybrid ran 24,000 miles a year, the payback would come in five years, and at 50,000 miles, the premium would be recovered in 2.5 years. Rising fuel prices also reduce the payback time.

Factor in a $12,000 tax credit allowed for some hybrid trucks by the Internal Revenue Service (IRS) and it cuts the hybrid's extra cost to $8,000 and the payback time to four years. But Dunn didn't qualify for the credit because the Kenworth-Eaton hybrid is not on the IRS's list of certified vehicles.

Some walk-in vans assembled by Freightliner Custom Chassis, and utility, and pick up and delivery trucks made by International, all using Eaton hybrid systems, are on the list. Kenworth says it's working to have its hybrid certified.

Trucks and autos using natural gas and propane actually qualify for higher tax credits — up to $32,000 each for a Class 8 truck. Chevrolet and GMC medium-duty trucks using a 6-liter gasoline engine modified by Baytech are among the certified alternative-fuel vehicles. Credits for hybrid trucks range from $4,500 to $12,000.


Toyota and its Prius, the country's best-known hybrid vehicle, have convinced many Americans that the clean-running, fuel-saving car, and others like it, will help clear the air and shake off dependence on foreign oil. What's true of the Prius and other hybrid autos is also generally true for hybrid systems in commercial trucks, except components are heavier and more robust, and they cost more.

Fuel savings can be substantial, but they alone can take a long time to pay for a hybrid truck's extra up-front cost. Federal tax credits are available for some hybrid trucks, which can also shorten the pay-back period. Anyone contemplating a hybrid purchase should look at a list of qualifying vehicles published recently by the Internal Revenue Service (see sidebar). Tax credits for alternative-fuel vehicles are even greater, and outright grants are available through a few state and local programs, mainly in California, Texas, and New York City.

Hybrid-drive trucks, which use diesel engines supplemented by either electric motors and batteries or by hydraulic boost systems, capture energy during braking and store it in special batteries or tanks, then use the electricity or pressurized fluid to "launch" trucks from a standstill. That allows the engine to loaf at a time when it normally works hard to overcome inertia and saves 30 percent to 50 percent in fuel as a result. The more the truck stops and starts the greater the savings.

Medium-duty diesel-electric hybrids from International, Freightliner, Kenworth and Peterbilt are just starting into production or soon will be. Peterbilt is also preparing to produce a heavy-diesel hydraulic hybrid for use in trash collection. International has assembled 24 public-utility trucks using diesel-electric hybrid drives, and all are now working and undergoing evaluation.

More than 100 diesel-electric package delivery vans, assembled by Freightliner Custom Chassis for FedEx Express and United Parcel Service, are now in regular service. And Ford will supply a gasoline-engine E series van chassis for conversion by Azure Dynamics, which is working with Allison Transmission on a diesel-electric system for medium-duty trucks. ArvinMeritor has helped build a package van for a Canadian operator and is working on a road tractor with International.

By far the biggest supplier of hybrid drives for trucks is Eaton, which made the electric systems and automated mechanical transmissions used in nearly all of the trucks now in service. An Eaton electric system is also used in a road tractor built by Peterbilt.

The only hybrid construction trucks now being used are a pair of Mack Granite dumps using Mack engines with automated mechanical transmissions and electric-drive systems from Volvo Powertrain. Mack assembled them for the U.S. Air Force, which is now gauging their value as fuel savers and using them to train technicians who'll eventually work on future hybrid trucks.

Meanwhile, several municipal transit districts operate hundreds of diesel-electric hybrid buses, and managers report substantial performance and fuel-saving advantages, not to mention reduced exhaust emissions. Their hybrid systems resemble those that could be used in large trucks, and manufacturers and users are gaining lessons from the experience. The buses are so quiet drivers say passengers and pedestrians are sometimes startled as buses running on electric power creep up on them.

Fuel alternatives

One principal advantage of hybrids is that they need no extra infrastructure. Their engines run on regular motor fuels, and they operate like other trucks and buses, except more economically and sometimes with greater acceleration. Some alternative fuels, on the other hand, require special fueling stations, and trucks must return to them regularly to fill up. A station can cost hundreds of thousands of dollars, but government incentives can help cover the cost. Current gaseous-fuel stations are owned by public and private entities who do not allow use by the public, so anyone thinking of buying alternative fuel trucks should be absolutely sure he has access to a station.

Alternative fuels not requiring special stations include ultra-low-sulfur diesel, now widely available, and biodiesel, which is a blend of organic oil and regular petroleum fuel. Both can be dispensed by regular pumps, although pumps and tanks must be dedicated to one fuel. A tank formerly used for common low-sulfur diesel can be transitioned to ultra-low-sulfur diesel simply by filling and depleting. Only a few "drops" (fills) of the new fuel, and perhaps a normal cleaning-out of water and other contaminants, are needed to cleanse a tank of its higher sulfur content.

Ultra-low-sulfur diesel fuel (ULSD) is now available throughout the continental United States and much of Canada, thanks to a mandate by the federal Environmental Protection Agency (EPA). ULSD contains only 15 parts per million of sulfur and must be used in EPA '07-spec diesels to protect expensive exhaust aftertreatment devices. It can be used in earlier engines, though few would want to pay its higher cost if they can avoid it. Low-sulfur diesel, with a sulfur content of 500 parts per million, is still available for the vast majority of diesels on the road.

Interest in biodiesel is spreading because its oils come from vegetables and animal fat — usually soy beans and meat scraps from restaurants. The oils displace diesel fuel. There is now a national standard for bio oil, but not yet one for biodiesel blends, so users need to know their suppliers and how the biodiesel is produced to be sure of its quality. Also, engine builders must approve the use of biodiesel at the anticipated concentration. All truck-engine makers have approved B5, a mixture of 5 percent bio oil and 95 percent petrol diesel, and some permit B20.

One quirk of biodiesel is that it acts like a solvent and scrubs a vehicle's fuel system. That moves impurities to filters, which can plug up and choke the engine. That resulted in widely publicized breakdowns a few winters ago in Minnesota. Filters have to be changed much more than normal until the truck's fuel system is cleaned out, and drivers need to carry extra filters and know how to change them if plugging and engine stoppages occur on the road.

Ethanol is now as well known as any motor fuel and has become a common octane-boosting additive for gasoline. California has mandated use of ethanol to replace a toxic compound called MTBE, which aids combustion but has insidiously escaped storage tanks and crept into and contaminated underground water tables and wells. Ethanol is usually blended in 5 percent or 10 percent concentrations with gasoline; the resulting product is called E5 or E10. More famous is E85, an 85-15 ethanol-gasoline blend.

Ethanol is heavily subsidized by the federal government and some states, and corn farmers are prospering as distilleries spring up around the Midwest. Lower prices for E-type gasolines can make them attractive for commercial use, but because the fuel has less energy, more of it must be bought and a vehicle's range is shorter than with regular gasoline.

More common alternative fuels for trucks are natural and petroleum-derived gases. For example, compressed or liquefied natural gas is being used in a growing number of local truck and bus fleets, most of them municipally owned but some privately owned and operated. Most fleets receive federal and state money to buy the specially equipped trucks and the fueling stations needed to replenish their tanks.

Once filtered, natural gas burns cleanly — its principal advantage — but it has less energy per equivalent gallon, so range is less than with petroleum fuels. Still, lower cost for the fuel can offset the fact that more of it must be burned, and natural gas is still an abundant resource in America.

Liquefied petroleum gas, or propane, likewise burns cleanly, but it's less widely used partly because Ford and General Motors have stopped making their gasoline engines with hardened valves and special fuel and ignition systems that allow them to burn the gas without damage. And because it's a byproduct of oil refining, propane's once-lower cost has increased.

Gas-fueled spark-ignition diesels are being built and sold by Cummins Westport, a joint venture between Cummins and Westport Innovations based in Vancouver, B.C. The main engine is the ISL-G, an 8.9-liter heavy-duty model adapted to burn natural gas. Westport also has a propane-fuel engine. Big customers for the ISL-G include public transit bus fleets in China, but Clean Air authorities in California are also boosting the product and have certified it for incentive payments. Kenworth has announced it is participating with Westport in the California program.

A few bus fleets with sources for hydrogen use it to reduce emissions to almost nothing. Some think it's the fuel of the future, partly because it burns so cleanly. However, it requires considerable energy and specialized machinery making it an expensive alternative.

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