Measuring costs of new technology
Purchasingb2b October 2011 print edition: Fleet Management
Choosing the right powertrain technology has never been more of a challenge for fleet managers. There are so many options out there in all vehicle classes below large highway tractors that it is hard to keep up with the latest developments.
But of one thing we can be sure—somewhere there is something that represents the best combination of lower life-cycle costs overcoming its initial increased cost, compared to the typical gasoline-powered car or truck.
Other than diesel, hybrid-electrics have become the new technology most in demand by fleet managers. But, there are several different versions of hybrids available, and one still has to look closely at costs. The entry level is the mild hybrid whose electric motors “assist” the gasoline engine and shut it down at rest, and they are a “lowest cost for lowest benefit” proposition.
The hybrid systems that allow the motor to drive the car without the engine are well-known (think Toyota Prius), but even that first-generation system with nickel-metal hydride batteries is becoming “old” in a hurry, as new developments in batteries are changing the game.
At last, the lithium-ion battery is ready for prime time, and most new hybrids launched in the last year have them. They pack more energy into a smaller package, provide more assist to the gasoline engine with highway fuel consumption figures better than 5.0 litres per 100 km, which used to be the exclusive preserve of diesels, along with the low city consumption that has always been the hybrid’s strength.
Plug-in hybrids are being launched for 2012, and they promise the ability to drive further on just electric power before the gasoline engine comes into use. Of course, this technology brings up the entire issue of plugging in to the electrical grid. This isn’t a consideration with a regular hybrid, and it brings new costs, including the charging infrastructure. For the fleet manager, this is an entirely new calculation.
Extended range EV
There is one slight variation in plug-in technology available right now in the Chevrolet Volt. Yes, it has an electric motor, and lithium-ion batteries that can be charged by plugging them into the grid, but it is not a hybrid. Rather, it is an Extended Range Electric Vehicle, because its on-board internal combustion engine is not connected to the wheels (except in one specific high-speed situation); its job is just to charge the batteries, which, in normal driving from a full charge, happens in about 70 to 80km.
Completing the spectrum is the full-electric, with no engine at all. These are now reaching the market in a big way. It is for these vehicles that the term “range anxiety” was coined, but if the normal day of driving falls within the vehicle’s operating range on a full charge, then full electrics are an answer to getting away from fuel costs entirely.
There are two fuels in abundance that are adaptable to a number of different engine technologies, but which are not yet ready for prime time. Hydrogen, of course, is in the air we breathe and is the waste byproduct of a number of industrial processes. However, there is very little delivery infrastructure yet, as the oil companies seem reluctant to participate. If it were available, we might now be talking about hydrogen fuel cell cars as the technology is essentially production-ready.
And then there is natural gas. North America is awash in the stuff, and it can be used to power both gasoline and diesel engines, but there are still environmental concerns with its full-scale extraction from the ground. When those concerns, and others, are resolved, we may not have to worry anymore about the cost or availability of gasoline as a motor fuel.
But for now we do, and hybrid or electric vehicles should be on your radar. However, recent studies show that some two-thirds of fleet managers do not yet plan to move in that direction. The main reason cited is that the long-term costs are indeterminate. While the battery systems in hybrids are typically warranted for ten years, and there have been no reports of mass failures, the jury is still out on their long-term reliability and cost of replacement.
Other factors you might consider relate to the charging of the batteries in a plug-in or electric. Are charging stations available when and where you would need one? If not, how much would it cost to build one on your site? And, how long would it take to charge a vehicle’s battery from dead to fully charged, all the while having the vehicle unavailable?
The new technologies engender a new level of cost-benefit calculation, but not everything is measurable. The fleet manager has to determine if the costs and benefits that can be calculated—plus the intangible benefits like corporate green image and environmental responsibility—warrant taking the plunge into hybrid-electric vehicles. b2b