THE STATE OF SUSTAINABLE FLEETS

Key Findings

SmartWay Webinar Mike Costanza Nate Springer Director, Environmental Services Director, Market Development Penske Transportation Solutions Gladstein, Neandross & 1 Associates [fj sUSf AINABLE q} FLEETS Webinar Housekeeping

• Submit a question via the Questions box on your GoTo control panel. • After the presentation, as time permits, our EPA presenter will answer questions submitted via the Questions box. • Please complete the survey at the end of today’s webinar. Your feedback is important to us!

The presentation slides and recording will be available at:

http://www.epa.gov/smartway/smartway-freight-matters-webinar-series

stateofsustainablefleets.com/ 2 ~ s USf AINABLE ij FLEETS PRESENTERS

NATE SPRINGER MIKE COSTANZA Director, Market Development Director, Environmental Services Gladstein, Neandross & Associates (GNA) Penske Transportation Solutions 310-279-7760 610-775-6471 [email protected] [email protected]

stateofsustainablefleets.com/ 3 @ sUSfAINABLE WHO IS GNA? FLEETS

At its core, GNA has deep experience supporting fleets to use advanced, clean technology. We leverage that expertise to provide value to the full industry. Clients and events include:

Port of LONG BEACH TnrG.rml Ifft

~ KRLMRR ...... NEW YORK CITY • w ii I . -- I TI):1--~ ,' stateofsustainablefleets.com/ 4 State of Sustainable Fleets The Trends and Demand for a Sustainable Fleets Resource

5 ffe SUSTAINABLE Poll Question #1 FLEETS

stateofsustainablefleets.com/ 6 [fj sUSf AINABLE q} FLEETS STATE OF SUSTAINABLE FLEETS

TITLE SPONSORS SUST Al NAB LE F'LEETS [PENSKE]

Rental I Leasing I Logistics

SUPPORTING SPONSORS GEOTAB management by measurement Founding sponsor .7 DTE Energy· stateofsustainablefleets.com/ C . 7 r; SUSTAINABLE A FLEET RESOURCE FLEETS

• Diesel / gasoline efficiency and renewable fuels • CNG, Propane, Battery Electric, Hydrogen (and renewable energy for each) • 9 fleet types including Regional Haul, Long-Haul, Delivery, Utility • Survey data from 400+ fleets • 6 years of vehicle sales data • 10 years of fuel costs and station counts • Biggest trends and headlines by market-makers

Comparison to diesel and gasoline vehicles used by fleets today.

stateofsustainablefleets.com/ 8 SA 0 SUSTAINABLE Regulators and customers are ratcheting up FLEETS requirements

Model Year Class 2b-3 Group Class 4-8 Group* Class 7-8 Tractors Group•• Zero Emission Regulation 2024 5% 9% 5% 2025 7% 11% 7% -_,_~~ EU 2026 10% 13% 10% 2027 15% 20% 15% - Walmart f 2028 20% 30% 20% Hainan 2029 25% 40% 25% ,J 100% NEV 2030 30% 50% 30% ':!. ~. by2030 2031 35% 55% 35% 15 US States and DC 30% ZEV by 2030 2032 40% 60% 40% "'- ·- ,._, (MoU signed) 2033 45% 65% 40% .,. 2034 50% 70% 40% Globally C40 Cities ... 2035+ 55% 75% 40% 100% ZEV by 2030 amazon,;-J

In 2020, California committed to 9 states (incl. NY, NJ, MD, OR) Both Amazon and Walmart have 100% zero-emission passenger follow California’s zero-emission set goals to transition their vehicles by 2035 and passed vehicle requirements. 15 states transportation networks to zero- requirements for OEMs to sell & DC signed an MOU for zero- emission vehicles in the 2030- 30-50% zero-emission vehicles emission vehicles to reach 30% 2040 timeframe. for medium- and heavy-duty by of sales by 2030. 2030. stateofsustainablefleets.com/ 9 SA 0 SUSTAINABLE Market leaders across the full trucking value FLEETS chain commit to lead the transition

Projected Battery Pack Cost Lithium Ion

$/kWh

200

160

120

80

2025 2030 Roger Nielsen, CEO of Daimler In 2020, Shell and BP become Jay Craig, CEO of Meritor, the North America, the the first global energy majors to leading producer of for leading manufacturer of Class 8 commit to a net-zero emissions heavy-duty trucks and other tractors, announced in 2019 that goal by 2050. parts, sees a big opportunity his company would lead the EV when the total cost of ownership transition. for EVs to reach parity, which Meritor expects in late 2020s. stateofsustainablefleets.com/ 10 susfAl NAB LE Over $5Bn of public incentives for vehicles FLEETS and infrastructure (2021)

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stateofsustainablefleets.com/ State of Sustainable Fleets Fleet Adoption of Sustainable Technologies

12 SA 0 SUSTAINABLE FLEETS

UNIQUE INSIGHTS ACROSS THE INDUSTRY

Natural Gas Propane NGV so les growth is led by straight and transit segments Demond for propane fuel hos grown PART I 100 :······ - ··-·· •• •• •• - -- 27% INCREASE ··· -·· ···· ---··-···· ····· ··· 7000 90 BO 6000 ~ 70 C) z 5000 60 ;i: ~ ~ ,o 0 '°°° w 3000 JO 20 2000 iz 10 1000 0 2015 2016 20 17 2018 2019 2020 2015 2016 2017 2018 YEAR YEAR OF REGISTRATION - Notional Demand rop 4 State$ Demand ■ Stroightlrvc.k. ■ Transit ■ CorgoVon ■ TroctorTrvck ■ Pickup ■ Culo'NOy

■ ■ Passenger Von ■ Cab and Chas:sis SUSTAINABLE FLEETS ARE GROWING Battery Electric Vehicles Hydrogen

Funding and deliveries for battery-electric grows Hydrogen fuel use in California has begun and is growing Sustainable vehicle and fuel 3500Xl use is growing across all ~ 3000JO "z 0 2500X) categories of medium- and ,:: 20CXXXJ heavy-duty alternative fuel lz 0u ISOOXJ z vehicles: , 100000 "~ 500X) ~ propane, battery electric :,: vehicles, and hydrogen fuel 2015 2016 2017 2018 2019 YEAR 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 cell electric vehicles. - Awarded - 0e11vered - HYDROGEN {GGE) Source: 2020 research. Does not account for economic impact of COVID-19. stateofsustainablefleets.com/ 13 [fj sUSf AINABLE q} FLEETS

UNIQUE INSIGHTS ACROSS THE INDUSTRY

1EXPECTED USE OF CLEAN TECHNOLOGIES BY FLEET TYPE GR O W CONSTANT DECREASE Munic ip a l/Shuttle 20 2 Ut il ity Truck 8 5 Urb an Delivery 5 0 0 School Bus 22 5 0 SUSTAINABILE TECHNOLOGY Tran sit 28 3 0 MORE THAN A TREND Refuse 3 0 0 Heavy-Duty - Sho rt Ha ul 13 0 98% of fleets surveyed currently using sustainable Heavy-Duty - Long Haul 4 0 technology expect to Heavy-Duty - Lo ng/Short Ha ul 17 4 continue at the same level or Totals increase their use of these 83.3% 14.6% 2.1% vehicles and fuels. Source: 2020 fleet survey. Results being tallied now for 2021 are similar.

stateofsustainablefleets.com/ 14 [fj sUSf AINABLE q} FLEETS Key Findings: Diesel & Gasoline

Fuel economy of 21 heavy-duty fleets in an efficiency study is 22% higher than national average

7.4 7.2 7.0

C) 6.8 a.. 6.6 :E 6.4 6.2 6.0 5.8 2003 2004 2005 2006 2007 2008 2009 2010 201 I 2012 2013 2014 2015 2016 2017 2018 YEAR

- Average MPG All US Trucks

stateofsustainablefleets.com/ 15 r; SUSTAINABLE Key Findings: Near-Zero-Emission FLEETS

Vehicles Fleet types leading adoption NATURAL GAS VEHICLES ~ GV growl y s I ru k n tr sits m nf HD SHORT HAUL LONG~- & SHORT HAUL (HD) 1A I 1

7000 :> l!iOOO 5000 ~ ~ .f{OJ ~ 0 REFUSE TRANSIT Ill: 20(X) ;:! :z 1000

0

EA Of IEG lTIAfJO ~ MUNICIPAL / ■ 1 Strtf tTruc ■ CorgoVm, Tr □ c O!' Trvcl-' p· r P ■ Cvla URBAN DELIVERY SHUTTLE ■ Sc::hOotSU!i Caba dC~is

New registrations of Class 2a-8 natural gas vehicles between 2015 and 2019 by vehicle type and by year. Source: IHS Markit. UTILITY stateofsustainablefleets.com/ 16 r; SUSTAINABLE Key Findings: Near-Zero-Emission FLEETS

Vehicles Fleet types leading adoption NATURAL GAS VEHICLES

HD SHORT HAUL LONG & SHORT HAUL (HD)

REFUSE TRANSIT

California natural gas vehicle fuel reaches carbon negative MUNICIPAL / URBAN DELIVERY CARB data reveals the average carbon intensity of natural gas SHUTTLE vehicle fuel in the state's Low Carbon Fuel Standard program was negative for the first time in program hi story.

N0V16, 2020 Source: California Air Resources Board, published in FleetOwner UTILITY 17 r; SUSTAINABLE Key Findings: Near-Zero-Emission FLEETS

Vehicles Fleet types leading adoption PROPANE (LPG) VEHICLES

sc ~ ~ I a d d nv ·· ry ti ·· ~ ts I . · a d r _a · v ic l · r. i :tr a tT n-~ A T REFUSE SCHOOL BUS

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MUNICIPAL / 4 URBAN DELIVERY SHUTTLE

UTILITY Sales of class 2a-8 propane vehicles between 2015 and 2019 by vehicle type. Source: OEM and Aftermarket sales data aggregated by Propane Education & Research Council. 18 r; SUSTAINABLE Key Findings: Zero-Emission Vehicles FLEETS

Fleet types leading adoption BATTERY ELECTRIC VEHICLES rn0 0 Tran sit, shutHe and school buses Transit and delivery fleets have HD SHORT HAUL TRANSIT lead EV purchases in California1s the largest BEV counts in 2019 HVIP program PARTl PART 2

32 3 SCHOOL BUS MUNICIPAL / ■ Transit Bus ■ Transi t SHUTTLE ■ Shuttle Bus Delivery

■ School Bus IJ tility 35% Parcel D.alivery

■ O her Truck ■ Other Bus ■ Refuse Truck URBAN DELIVERY UTILITY

187

Around 2,000 total Class 3 – 8 BEVs are in the hands of fleets today, majority are transit and school buses (2019) 19 r; SUSTAINABLE Key Findings: Zero-Emission Vehicles FLEETS

Fleet types leading adoption BATTERY ELECTRIC VEHICLES

Only 13% of public charging stations provid,e DC fast charging rates HD SHORT HAUL TRANSIT

■ EV L.e vel l

■ EV L@vel 2 MUNICIPAL / SHUTTLE ■ DC FC Inon-I esla]

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URBAN DELIVERY UTILITY

Public charging for fleets is lagging… 20 r; SUSTAINABLE Key Findings: Zero-Emission Vehicles FLEETS

Fleet types leading adoption BATTERY ELECTRIC VEHICLES rn0 0 HD SHORT HAUL TRANSIT Nearly all surveyed fleets who pllan to use BEVs will install their ·own charging. Around 1/3 will install storage and onsite generation

t!) z ~w Cj t Ori: 1:1.. z 0 I:! i= ~~ 33% URBAN DELIVERY UTILITY 0~w C,

0% Ill% 91)% lOO';ll

…so most fleet adopters of EVs are installing depot charging. 21 SA 0 SUSTAINABLE Key Findings: Zero-Emission Vehicles FLEETS

BATTERY ELECTRIC VEHICLES

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More than 90 models of EVs were available in 2020, equivalent to CNG vehicle availability. Another 12+ are on the way in 2021- 2022. 22 r; SUSTAINABLE Key Findings: Zero-Emission Vehicles FLEETS

Fleet types leading adoption HYDROGEN FUEL CELL ELECTRIC VEHICLES

HD SHORT HAUL TRANSIT Transit Leading the Way Of the estimated 70 heavy-duty FCEVs deployed in the U.S., the majority are early commercial transit buses, including approximately 50 in California.

MUNICIPAL / URBAN DELIVERY SHUTTLE

Cutting Fuel & Infrastructure Costs Retail hydrogen fuel costs are roughly double the retail price of gasoline – but, prices have dropped by half over the past decade. Infrastructure providers have a goal to cut costs in half again.

23 SUSTAINABLE Key Findings: Zero-Emission Vehicles FLEETS

Fleet types leading adoption HYDROGEN FUEL CELL ELECTRIC VEHICLES FU TURE MEDIUM- AND HEAVY-DU TY VEHICLE OFFERINGS

PICK-UP CUTAWAY CHASSIS-CAB CAB-OVER PASSENGER CARGO VAN STRAIGHT TRUCK HD SHORT HAUL TRANSIT . ►, Lightning C( -' Systems 1 (2020)

TRANSIT BUS SCHOOL BUS (TYPE C-D) REFUSE TRACTOR @) 1 (TBD) HYUnDAI I ® 1(2021 ) ~ TOYOTA URBAN DELIVERY MUNICIPAL / 8 l (2023) SHUTTLE NIKOL/1: ry·, l (TB DJ TOYOTA CURRENT MEDIUM- AND HEAVY-DUTY VEH ICLE OFFER INGS PICK -UP CUTAWAY CHASSIS -CAB CAB -OVER PASSENGER VAN CARGO VAN STRAIGHT TRUCK

2021 - 2023 NO CURRENT OFFERINGS AVAILABLE

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2020 OEMs will more than double the number of fuel cell vehicle models offered in the next two years. 24 State of Sustainable Fleets Penske Transportation Solutions

25 ffe SUSTAINABLE Poll Question #2 FLEETS

26 [fj sUSf AINABLE q} FLEETS Penske Transportation Solutions

Truck Rental Truck Leasing Logistics Operates one of the newest Is a leading transportation Serves companies in North and most diverse truck fleets services provider in North America, South America, in North America providing America, offering: and , offering: both: • Full-Service Leasing • Dedicated Contract Carriage • Commercial Rental • Contract Maintenance • Freight Management • Consumer Rental • Distribution Center Management 327,000+ Vehicles | 3,700+ Locations | 37,000+ Associates flJ SUSTAINABLE Penske - SmartWay FLEETS

RECOGNIZED FOR A STRONG COMMITMENT TO CLEAN TRANSPORTATION AND FOR BEING AN ADVOCATE WITHIN THE TRANSPORTATION INDUSTRY ~ • SmartWay Transport Partnership and Canada SmartWay ~ ,SmartWay® Transport Partnership Transport Partnership • SmartWay Affiliate Challenge Award (since 2015) U.S. ENVIRONMENTAL PRO ECTION AGENCY • SmartWay Excellence Award (since 2017) • U.S. EPA Clean Air Excellence Award in the Clean Air Technology Category (2015) • Additional activities & recognition include:

• Top Green Provider, Food Logistics Magazine (since 2011) • Green Supply Chain Partner, Inbound Logistics (since 2010) • Supply and Demand Chain Executive Green Supply Chain Award (2013-18) • Green Freight Europe

28 @ sUSf AINABLE @ FLEETS Penske - SmartWay

SmartWay’s Carrier Performance Rankings

• EPA compiles data from carriers and divides the data into five performance ranges • Rankings are provided for CO2, NOx and Particulate Matter (PM) on a per mile and per ton-mile basis • Compare performance to your peers based on mode and category • Track performance year-over-year • Penske has submitted 100s of annual Truck Tools on behalf of our Customers since 2007

29 [fj sUSf AINABLE Penske – Alt. Fuel Profile q} FLEETS

• 700+ non-diesel units (EVs, CNG, LNG, propane, hybrid) • 6 EV charging facilities in S. California • 35+ modified maintenance facilities to service NGVs • Trained maintenance technicians • Coordination of alt. fuel grants/funding • On-going discussions w/ OEMs, startups, and charging equipment providers

Many of our Customers have made sustainability commitments and we are ready to assist as a trusted advisor. 30 [fj sUSf AINABLE Penske - Essential Partners q} FLEETS

Penske has partnered with Daimler Trucks North America to co-create and operate the Freightliner Electric Innovation Fleet of eCascadia™ heavy-duty trucks and eM2 medium- duty trucks. IA THE PORT OF LOS ANGELES

The Freightliner Innovation Fleet is supported by a partnership between: • Daimler Trucks North America • South Coast Air Quality Management District

• EPA The Port of • Ports of Los Angeles and Long Beach LONG BEACH

31 ~ s USf AINABLE Penske - EV Charging Infrastructure ij FLEETS

Six locations in Southern California with DC fast charging (21 charging positions) • Chino – 2 x 150 kW, 4 charging positions • Anaheim – 2 x 150 kW, 4 charging positions • La Mirada – 2 x 150 kW, 4 charging positions • San Diego – 1 x 150 kW, 2 charging positions • Temecula – 1 x 50 kW, 1 charging position • Ontario – 3 x 150 kW, 6 charging positions, Fluence battery storage system Charging times: • eCascadia: 3 hours to charge from 0% to 80% state of charge (SOC) -4 hours to charge from 0% to 100% SOC • eM2: 2 hours to charge from 0% to 80% SOC -3 hours to charge from 0% to 100% SOC

32 @ sUSfAINABLE Penske - EV Charging Infrastructure FLEETS

- --=====- Cable Management System Monitoring: and Distribution Com;munications 1!50 KW 150KW Panel Panel Charger Charger Cabinet Cabinet I .... - --1 ' '

33 [fj susfAINABLE Penske – Other Sustainability Initiatives ~ FLEETS

&EPA • Green Power Partner since 2014 • Committed to using renewable energy .iGREEN • 2020 - more than 700 EPA Green Power Partners ~POWER were collectively using nearly 70 billion kilowatt- PARTNER hours (kWh) of green power annually

EPA • WasteWise Partner since 2016 • Committed to reducing/recycling solid waste ~ Waste • During the 25 years of the WasteWise program, ■ participants have kept 247 million tons of 1se materials from going to landfills or incineration

34 ffe SUSTAINABLE Poll Question #3 FLEETS

35 r; SUSTAINABLE Q & A FLEETS

MIKE COSTANZA Director, Environmental Services Penske Transportation Solutions 610-775-6471 [email protected]

NATE SPRINGER Director, Market Development Gladstein, Neandross & Associates (GNA) 310-279-7760 [email protected]

36 Nate Springer Mike Costanza Director, Market Development Director, Environmental Services Gladstein, Neandross and Associates Penske Transportation Solutions (GNA) 610-775-6471 (310) 279-7760 [email protected] [email protected] 37 linkedin.com/in/nathanspringer