This article first appeared in The Fuse on August 24, 2016.
Bravo to Elon Musk and President Obama. They continue to think big by setting ambitious goals for U.S. vehicle electrification, backed by multi-billion dollar commitments to various all-electric vehicles and charging stations.
Last month, the Obama administration announced loan guarantees of up to $4.5 billion to build electric-car charging stations, and support broader electrification. Back in June, Mr. Musk unveiled Tesla’s Master Plan Part Deux. Besides calling for an audacious solution of vertically-integrated solar panel-charged Tesla sports cars, Part Deux also includes plans to build an all-electric pickup truck, an electric heavy-duty semi-truck, and an electric bus concept that would turn a bus driver into a “fleet manager.” Musk said his overall goal is for Tesla to offer an array of products and services to accelerate the transition away from oil.
Musk’s talk of Tesla crossing over from consumer cars and SUVs into trucks and fleet offerings reaffirms a market opportunity that my company, XL Hybrids, already recognizes: The need for electrified solutions for commercial vehicles. After all, while medium and heavy-duty trucks account for 5 percent of vehicles on the road in the U.S., these gas-guzzlers account for about 20 percent of on-road fuel consumption in the U.S. Fuel efficiency of conventional commercial vehicles is very low—in the single digits in many cases—and these vehicles drive high mileage routes every day. That means we’ve got the highest mileage vehicles on the road driving with the worst MPG.
If we’re going to solve our problem of vehicle emissions, which recently surpassed electricity power plant emissions as the #1 emissions problem in the U.S., tackling commercial vehicles will make a major difference.
However, when it comes to electrifying commercial fleets, expecting the widespread adoption of purely battery-electric trucks, vans and buses over the next decade will not be a winning strategy to make the biggest impact. Will EV trucks have applications in many commercial fleets? Yes, but for much of the commercial market, the operational limitations of EVs (range limitations, high costs, cargo carrying constraints, etc.) will continue to prevent fleets from deploying these vehicles at significant scale. The team at XL Hybrids understands this reality very well from our discussions with our Fortune 500 fleet customers, many of whom love the idea of EV’s but struggle to find commercial applications where EVs make financial or operational sense. Instead, fleets want electrified solutions that are practical and cost effective.
That is why XL Hybrids, the leader in connected fleet electrification today, is taking a different approach towards successfully deploying electrified solutions in trucks, vans and buses.
XL Hybrids is a way for fleets to reduce operating costs and increase sustainability, and achieve a payback, which is a value proposition that all-electric commercial vehicles will continue to struggle to achieve. Rather than making expensive all-electric vehicles that can only be used by a small portion of a fleet, we are developing and deploying a mix of lower cost hybridization technology with increasing amounts of electrification that collectively can be deployed in more places, and in more fleet duty cycles than EVs. Our xEV technology is an “upfit” that significantly increases the MPG for Ford, GM and Isuzu trucks, vans and buses. This way, the fleet gets a reliably tried-and-true OEM powertrain to power its vehicle, plus a parallel electrified system from XL Hybrids to boost overall MPG by anywhere from 25 to 100 percent, depending on the type of xEV system. XL Hybrids is a way for fleets to reduce operating costs and increase sustainability, and achieve a payback, which is a value proposition that all-electric commercial vehicles will continue to struggle to achieve.
We do, however, fully support the nationwide and pervasive expansion of plug-in infrastructure suitable for commercial vans and trucks, because this will be critical for commercial plug-in hybrid electric vehicles (PHEVs).
Mr. Musk and President Obama are to be commended for their commitments to vehicle electrification. When it comes to electrifying commercial vehicles with technology that makes operational and financial sense for fleets, XL Hybrids will continue to fill the large gap in the all-electric plans of Tesla and the White House by delivering a simple, smart, sustainable hybrid electric solution the commercial sector can use right now.