EXECUTIVE SUMMARY: Hybrid Electric Vehicles for Fleet Markets Commercial Hybrid, Plug-In Hybrid, and Battery Electric Vehicles: Light-Duty Cars and Trucks
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EXECUTIVE SUMMARY: Hybrid Electric Vehicles for Fleet Markets Commercial Hybrid, Plug-in Hybrid, and Battery Electric Vehicles: Light-Duty Cars and Trucks NOTE: This document is a free excerpt of a larger research report. If you are interested in purchasing the full report, please contact Pike Research at [email protected] Published 3Q 2010 Dave Hurst Senior Analyst Clint Wheelock Managing Director Hybrid Electric Vehicles for Fleet Markets Section 1 EXECUTIVE SUMMARY 1.1 Introduction Fleet managers are looking to a variety of technologies to protect their budgets from increasing fuel costs and, at the same time, comply with emissions-reduction requirements. Hybrid electric vehicles (HEVs) can help fleet managers accomplish both goals – improving fuel economy between 5% and 40% and lowering emissions 10% to 50% below comparable vehicles with only internal combustion engines (ICEs) burning petroleum- based fuels (gasoline and diesel). Light-duty HEVs were launched in 1999 by Honda, followed closely by Toyota. Since that time, the Toyota Prius has become the leading HEV worldwide. Not only is the Prius the bestselling vehicle in Japan, it also comprises nearly one-half of all HEVs sold in the United States. Within the last two years, the number of available HEV models has grown substantially, and Audi, BMW, Daihatsu, Ford, GM, Honda, Hyundai, Mercedes, Nissan, and Toyota will have HEV models available by the end of 2010. There are essentially two types of hybrid light-duty (LD) vehicles that are becoming available to fleet managers: HEVs: these generate all their electrical energy onboard, and improve fuel economy either by providing traction to the wheels from electric motors and shutting off the ICE, or by allowing the ICE to run at its most efficient while the electric motor provides additional power to the wheels as needed Plug-in Hybrid Electric Vehicles (PHEVs): these store energy from the electric grid, and offer increased electric driving range over HEVs. This is a new category of vehicle for OEMs (though conversions of HEVs into PHEVs have been taking place for several years). HEVs have been introduced in most market segments to varying degrees of success. While the majority of HEVs sold are passenger cars, OEMs are offering a growing number of HEV SUVs in the United States. Trucks are a popular form factor with both consumers and fleets in the United States. In fact, among fleets, LD trucks continue to slightly outsell passenger cars (54% to 46% in 2010, respectively). PHEVs will follow the lead of HEVs and will be launched initially as passenger cars, followed closely by small SUVs. The main reason for the focus on these segments is two-fold: 1) smaller vehicles are more efficient and can better extend the electrically powered driving range; and 2) the small-SUV segment is very popular among consumers. With few exceptions, the consumer market, due to its sales volume, drives the development of LD vehicles. © 2010 Pike Research LLC. All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without the express written permission of Pike Research LLC. 1 Hybrid Electric Vehicles for Fleet Markets Chart 1.1 Annual Global HEV/PHEV Sales, World Markets: 2010-2015 1,500,000 1,200,000 Global HEV Sales HEV Fleet Sales 900,000 (Vehicles) Global PHEV Sales 600,000 PHEV Fleet Sales 300,000 - 2010 2011 2012 2013 2014 2015 (Source: Pike Research) HEVs come in essentially three designs: the micro (or start/stop) hybrid, the parallel hybrid and the series hybrid: Micro hybrids stop the ICE when the vehicle comes to a rest – at a stop light, for instance – then restart the ICE when the driver touches the accelerator Parallel hybrids allow the ICE to provide power to the wheels and recharge the batteries Series hybrids have no mechanical connection between the ICE and the wheels, and the ICE keeps the battery charged to power the wheels HEVs are often designed to be a blend of series and parallel hybrids that permit the electric motor to power the wheels for a short distance before the ICE takes over. Similarly, PHEVs operate in electric mode until the batteries reach a certain level of depletion; however, the electric range for PHEVs is longer (typically between 10 and 40 miles) because the batteries are larger and able to store energy from the electric grid. Once the batteries reach the level of depletion, an ICE takes over to maintain their state of charge. Batteries are among the most expensive components in HEVs and PHEVs. Many HEVs currently use nickel metal hydride (NiMH) chemistry because it can store more energy at a lighter weight than lead acid batteries. Within the last several years, however, technology for transportation has focused on lithium-ion (Li-ion) batteries due to their power density (300 W/kg to 1,500 W/kg) and high nominal voltage (3V to 4V). Other battery chemistries such as lead acid and NiMH cannot match the weight-to-power ratio of Li-ion, so some manufacturers have begun to offer HEVs with Li-ion batteries despite the fact that it is a more expensive technology; Li-ion battery packs are priced between $175 to $500/mile of EV driving (depending on vehicle design and battery chemistry). All PHEVs will utilize Li- ion batteries since they require the extra storage capacity. © 2010 Pike Research LLC. All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without the express written permission of Pike Research LLC. 2 Hybrid Electric Vehicles for Fleet Markets When fleet managers replace vehicles or add to their fleet, they often examine overall lifetime costs, which often include fuel costs. As a result, many fleet managers look to HEVs as a way to save. Because of their cost premium, HEVs often end up with an overall lifetime cost that is either the same or slightly higher than that of ICE vehicles in regions with low-cost gasoline (such as North America). Consequently, many governments are offering tax incentives to effectively reduce the purchase price for HEVs and PHEVs, making the overall lifetime cost more competitive with traditional ICE vehicles. When calculating overall cost, however, many fleet managers may not be including incentives into the equation, either because they do not qualify (government fleets) or because the tax incentive is not put back into their budget. Regardless, many fleet managers are electing to purchase HEVs as a means to comply with requirements to reduce fleet emissions. Additionally, fleet managers are expected to increasingly adopt HEVs as a hedge against higher fuel costs, particularly in North America and Asia-Pacific. Globally, HEV fleet sales are expected to grow at 17.5% CAGR between 2010 and 2015, with the strongest growth in China (61.3% CAGR) as Chinese manufacturers launch hybrid models to meet increasingly stringent transportation emissions regulations. However, the United States is expected to be the largest fleet market for LD HEVs through 2015, with sales reaching 233,454 vehicles in that year (an 8.1% CAGR from 2010). Worldwide, HEV fleet sales will reach 740,704 vehicles in 2015, representing nearly 4% of global LD vehicle sales. Chart 1.2 Hybrid Electric Vehicle Fleet Sales by Region, World Markets: 2010-2015 800,000 Africa/Middle 700,000 East 600,000 Asia-Pacific 500,000 Eastern Europe 400,000 (Vehicles) Western 300,000 Europe Latin America 200,000 100,000 North America - 2010 2011 2012 2013 2014 2015 (Source: Pike Research) © 2010 Pike Research LLC. All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without the express written permission of Pike Research LLC. 3 Hybrid Electric Vehicles for Fleet Markets Section 9 TABLE OF CONTENTS Section 1 .................................................................................................................................................. 1 Executive Summary 1 1.1 Introduction ................................................................................................................................ 1 Section 2 .................................................................................................................................................. 4 Market Issues .......................................................................................................................................... 4 2.1 History ....................................................................................................................................... 4 2.2 Hybrid Electric Vehicles ............................................................................................................ 5 2.2.1 Passenger Cars ................................................................................................................... 9 2.2.2 Light Trucks ......................................................................................................................... 9 2.3 Plug-In Hybrid Electric Vehicles ................................................................................................ 10 2.3.1 Passenger Cars ................................................................................................................... 11 2.3.2 Light Trucks ......................................................................................................................... 12 2.4 Conversion