EXECUTIVE SUMMARY 17 2 Executive Summary 2.1 The hybrid era: evolution toward electrification For many people, hybrid electric vehicles (HEVs) are conceived as a transitional stage between traditional internal combustion vehicles (ICVs) and the fuel cell vehicles (FCVs) that are presumed to be in our future. Although the reality is not quite so simple, this is a useful framework when considering whether hybrid electric (HE) drivetrains will emerge as viable commercial products. An important concept to consider is that there will be no discrete break between the era of ICVs and HEVs. In fact, it is most accurate to view the new HEV era in transportation as a continuum of the incremental and ever-increasing electrification of the ICV. At some point perhaps, the internal combustion engine (ICE) will be replaced in the HEV by a fuel cell, and the evolution toward electrification will be advanced even further. It is important to remember, however, that most fuel cell vehicles will also be HEVs, as they will have onboard energy storage. 1 This continuum can already be seen in the range of products on the market and in development right now. To potential users of HEVs, the greatest value of this continuum is to help them understand the type of HE product that might best serve their needs. On the very lightest end of the HE continuum, outside the range of true hybrid products, are products like the Delphi Automotive Systems Energen TM 5, a 12v alternator/starter and start-stop control module for light vehicles. It stops the engine while at idle and quickly starts it via an accessory belt and pulley. On the far end of the scale, on the heavy-duty (HD) HEV side, are Allison, BAE, Oshkosh, and other drivetrains capable of powering full-size buses, Class-8 trucks, and light armored military vehicles. Even now, there is a great diversity of product types in the planning stage that fits along this continuum. The era of HE proliferation is under way. After a number of years, product successes will emerge at certain discrete points on the continuum after it becomes evident which user needs are best served by specific HE products. Next, a shakeout and consolidation will follow, with the most successful solutions remaining and some products or companies dropping out of the market. This could then be followed by
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EXECUTIVE SUMMARY
17
2 Executive Summary
2.1 The hybrid era: evolution toward electrification
For many people, hybrid electric vehicles (HEVs) are conceived as a transitional
stage between traditional internal combustion vehicles (ICVs) and the fuel cell vehicles
(FCVs) that are presumed to be in our future. Although the reality is not quite so simple,
this is a useful framework when considering whether hybrid electric (HE) drivetrains will
emerge as viable commercial products.
An important concept to consider is that there will be no discrete break between the
era of ICVs and HEVs. In fact, it is most accurate to view the new HEV era in
transportation as a continuum of the incremental and ever-increasing electrification
of the ICV. At some point perhaps, the internal combustion engine (ICE) will be
replaced in the HEV by a fuel cell, and the evolution toward electrification will be
advanced even further. It is important to remember, however, that most fuel cell vehicles
will also be HEVs, as they will have onboard energy storage.1
This continuum can already be seen in the range of products on the market and in
development right now. To potential users of HEVs, the greatest value of this continuum
is to help them understand the type of HE product that might best serve their needs.
On the very lightest end of the HE continuum, outside the range of true hybrid
products, are products like the Delphi Automotive Systems EnergenTM 5, a 12v
alternator/starter and start-stop control module for light vehicles. It stops the engine while
at idle and quickly starts it via an accessory belt and pulley. On the far end of the scale,
on the heavy-duty (HD) HEV side, are Allison, BAE, Oshkosh, and other drivetrains
capable of powering full-size buses, Class-8 trucks, and light armored military vehicles.
Even now, there is a great diversity of product types in the planning stage that fits
along this continuum. The era of HE proliferation is under way. After a number of years,
product successes will emerge at certain discrete points on the continuum after it
becomes evident which user needs are best served by specific HE products. Next, a
shakeout and consolidation will follow, with the most successful solutions remaining and
some products or companies dropping out of the market. This could then be followed by
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new entries into the field, chasing the most successful niches. This is a typical cycle for a
new technology that begins to mature,
Figure 2-1 Products from light hybrids through HD HEVs are part of acontinuum of electrification of all classes of vehicles
For example, after a period of time, some urban Class 4 or 5 truck operators may
find that light hybrids rather than a full hybrid drivetrain offer the best solution, or vice
versa, because of work demand, acquisition cost, performance, emissions reduction,
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operation and support costs, etc. Transit operators may start to favor a dual parallel drive
over series, or vice versa. The point is that some HD HE products will start to succeed
commercially in perhaps 2004–2010, especially after the 2007 ultra-clean U.S.
Environmental Protection Agency (EPA) heavy-duty diesel standards take effect. Others
will not find enough buyers to continue. A shakeout and appearance of second- and third-
generation products should follow.
2.2 The HD HEVs market today
The maximum capability of the HD industry to absorb HE products can be estimated
based on total relevant sales and market percentages (see Table 4-2 on page38). For
instance, if hybrids were able to capture 15% of the Class 6 truck market (one of the
likely HD HE “sweet spots”), sales would amount to 31,000 units over four years, or
7,750 units per year, based on year 2000 sales levels.
It’s hard to predict the degree to which hybrid electric drivetrains will actually
capture market share in the next 2–15 years. Certainly at present, we are at the very
beginning of the market. A substantial portion of this paper is devoted to what the key
players are doing in products and technology. In addition, anecdotal comments from
some of them are reported in paragraph on 4.4.1 on page 52
Many products are in development. Buses have arrived on the market first. Some
production bus products are available from medium-size integrators such as AVS, ISE,
Wright Bus, E-bus, and others, often using Capstone microturbine generators as the
power source. TransTeq has built more than 30 HE transit buses using commercial
natural gas engines. Hino, in Japan, has had a light hybrid truck and bus line on the
market for more than 10 years. Some HD HE trucks will follow from a number of
companies. Two major industrial corporations—General Motors and BAE—have
drivetrain products that have been used in demonstrations and early-stage commercial
bus models by Orion, New Flyer, Thor, MCI, Gillig, and other bus makers.
However, the commercial user base is largely unfamiliar with hybrid electrics. It is
safe to characterize the present as the start of the period in which HD HEV products will
have to be proven in extended real-world use before commercial users will feel
comfortable in acquiring them in numbers.
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The Catch-22, of course, is that the high cost of acquisition of HD HEVs will
initially limit their sales, and prices will go down only after volume sales occur. This is
where government comes in. To help meet national environmental and energy-
independence priorities, the U.S. government subsidizes HE purchases by a variety of
means. This occurs primarily through public transit subsidies that apply to all transit
buses, as well as some grants and monies that are available to help mitigate the
incremental (higher) cost of purchasing an HE bus compared with a standard diesel bus.
Tax incentives for buyers of HD HEVs are contained in the U.S. House of
Representatives bill H.R.4, the Securing America’s Future Energy (SAFE) Act of 2001,
now in committee. This kind of demand-side support will help jumpstart the industry.
Government also supports preserving the environment and public health by
establishing EPA standards that require HD engines to meet established levels of
particulate matter (PM) and oxides of nitrogen (NOx) emissions levels. HE products
generally benefit competitively from this development, in that HE drivetrains can reduce
emissions up to 50% or more compared with standard diesel engines. However, by 2007,
EPA standards will require that HD diesel engines lower their PM by 99% and NOx by
95% below mid-2002 levels.2 This means that by 2007, HEVs will not have as great an
emissions advantage compared with diesel as they do today. However, it is very possible
that both HE technology and diesel exhaust aftertreatment will be used in the same HD
HE trucks to meet 2007 standards. If so, the distinction between HD “advanced” cleaner
diesel and HD HE drivetrains could begin to blur.
In an act of synchronicity that is fortunate for the cause of HD HEVs, the unique
traits of HE drivetrains happen to perfectly match the projected future needs of the
Army’s transportation command. Hybrids combine low fuel consumption, flexibility in
physical configuration, and onboard power generating capacity in one drivetrain package.
These attributes have created considerable demand for certain HD HEVs by many Army
planners. The Army is embarking on a major re-engineering effort through 2020 called
Objective Force, and HEVs’ capabilities fit well within that vision. Demonstrations and
testing are going forward today.
As part of the Army’s Tank Automotive Research and Development Center
(TARDEC), the National Automotive Center (NAC) works closely with vehicle and
drivetrain manufacturers to create Army HEVs having as much commonality as possible
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with commercial products. This will help the manufacturers’ commercial business by
subsidizing research and development costs. It also lowers the Army’s cost by providing
vehicles or systems that share economies of scale with commercial products, and lower
the Army’s Operations and Support (O&S). In addition to HE fuel economy, the off-grid
power generating capability of HEVs is of great interest to the military. The Army is the
single most important demand-side player pushing the HD HEV market and technology
forward, and will probably be so for the next 3–5 years, and possibly far beyond that.
2.3 The cost issue
After asking, “What will it do for me?” the second question a prospective buyer of a
HD HEV will ask is “What will it cost?” The answer involves a number of factors. The
incremental purchase cost over that of the closest comparable natural gas or diesel
vehicle needs to be established. Then the projected savings on fuel (probably 10–50%)
and brake linings need to be factored in (HEVs wear out brakes more slowly because of
the energy absorbed in regenerative braking). Periodic replacement of batteries has to be
considered. Training and support, repairs on HE components, downtime, and other O&S
expenses are also in the equation. The final analysis determines the “breakeven” point at
which the incremental investment in HE technology would be paid back. This is the
number of years or miles that must pass before the higher initial cost and operating costs
will be neutralized by lower fuel and brake costs or by a valuation of the emissions
eliminated by using HEVs.
Ideally, an HEV buyer today would have such a “lifecycle cost analysis” based on
real-world data on his or her desk before making the decision to purchase. Such a
document would probably be of great value to propel the HD HEV industry forward.
Unfortunately, it does not yet exist. No single fleet has had a sufficient number of
production diesel-powered HE heavy-duty vehicles (HDVs) to produce the needed study.
The survey of HD HEV manufacturers and users conducted for this paper revealed that
nearly all manufacturers had conducted their own studies, but they were proprietary and
not available for review.
Simulation programs have filled in some of the gap, although they tend to be more
for engineering purposes than for end-user lifecycle cost analysis. Examples are the
Partnership for a New Generation of Vehicles System Analysis Toolkit (PSAT),
developed jointly by Argonne National Laboratory, Ford, GM, and DaimlerChrysler,
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Opal-RT Technologies’ HEVism application, and the National Renewable Energy
Laboratory’s (NREL) ADVISOR (ADvanced VehIcle SimulatOR) application. In
contrast, BAE Systems offers its “Lifecycle Tool” to help prospective buyers calculate
costs of vehicle acquisition and operation, plus emission benefits.
Some information is available, however. The most comprehensive published review
is a report by NREL on the New York City Transit (NYCT) experience with 10 Orion
HD HE buses over 12 months and 174,465 miles of revenue-paying service.3 It presents
data on the costs of operating the HE buses and diesel buses on the same revenue-
generating routes for a year. Results are summarized in paragraph 4.3.2.4 on page 48.
The most telling results in the NREL report are that the incremental savings on fuel
per bus per year averaged $680, and the savings on brakes averaged between $340 and
$850. These savings in themselves will in no way begin to offset the incremental
purchase cost of an HE bus, let alone the higher average annual incremental maintenance
costs ($9,350 for the newer HE buses). The Orion VI buses were pre-production models;
presumably maintenance costs will go down over time, as they did between the older and
newer buses that NYCT acquired. Nonetheless, the payback for NYCT in using HE buses
obviously lies in emissions reduction. The important question to consider is whether the
incremental cost of the HE buses is a good value for the amount of emissions the HE
buses save from being released into the environment.
One reason the NYCT buses accrued low levels of total actual fuel savings is that
they were operated on slow-moving routes, traveling an average of only 51 miles per day.
A challenge for the HD HE industry is to introduce solutions for commercial fleets that
offer substantial fuel savings on routes that include steady-state operation over longer
distances. Such routes will allow HD HEVs to accrue more substantial savings on fuel.
2.4 Opportunities and Challenges
Heavy-duty HEVs are unique in combining these attributes: lower emissions, higher
miles per gallon, and onboard generating capacity. Both manufacturers and users can
indulge in some creative “blue-sky thinking” to arrive at solutions that could apply all
three traits. These could be fire trucks, emergency vehicles, high-value tactical Army
vehicles, construction work trucks, electric and phone utility trucks, catering trucks,
recreational vehicles, forestry trucks, mobile command centers, film and video
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production trucks, and more. Other HD vehicle types will benefit from the regenerative
Another opportunity for the HD HEV industry exists in the electrification of light-
duty vehicles. As companies such as General Motors, Toyota, Ford, Honda,
DaimlerChrysler, and others start to release more and more hybrid and hybrid-like light
vehicles per their announced intentions, key technologies will be developed broadly and
on a greater scale. The industry’s commitment to fuel cells will have a parallel effect, as
virtually all fuel cell drivetrains will be HE drivetrains. This fact will benefit the HD
manufacturers. As progress is made in light-duty HE technology, it will advance the state
of the art. The HE technologies that will most readily transfer to the HD side are energy
storage and management and HE control algorithms.
However, challenges lie in the path of blue-sky concepts, including the higher cost
of HE components; the cost of batteries and/or their less-than-hoped-for performance and
reliability; high research and development costs; compromises in selecting the right
balance of components for the application; the difficulty of optimizing power controls
and algorithms; and competition from advanced diesel and natural gas vehicles.
The industry is trying to proceed in the best direction, taking these factors, market
analysis, and risk management into consideration. Some products on the market or close
to commercial release have the chance to become viable in the commercial HD
marketplace.
1 A working definition of a HEV is a vehicle that has onboard power generation, energy storagecapacity, and an electric motor. The power generation can come from either an internalcombustion engine or a fuel cell.2 Mid-2002 levels first took effect in 1998.3 Battelle company for National Renewable Energy Laboratory, (NREL) “New York City TransitDiesel Hybrid-Electric Bus Site Final Data Report, Orion VI Hybrid Fleet,” February 2002.