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Lisa JerramSenior Analyst

John GartnerResearch Director

EXECUTIVE SUMMARY: Total Cost of Ownership of Alternative Fuel Vehicles for Fleet Operators TCO Comparison of Alternative Fuel Light-Duty and Medium-Duty Vehicles in Fleet Operations

NOTE: This document is a free excerpt of a larger report. If you are interested in purchasing the full report, please contact Pike Research at [email protected].

Published 2Q 2012

Total Cost of Ownership of Alternative Fuel Vehicles for Fleet Operators

© 2012 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.

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Section 1 EXECUTIVE SUMMARY

1.1 Overview

Many fleet managers are experiencing cross-cutting pressures to streamline operational costs and reduce the environmental impact of their fleets. In some cases, the fleet operators themselves want to reduce their fleets’ environmental footprint. In other cases, fleets are being required to do so because of legislative or regulatory schemes.

Regardless, the two primary goals – more cost-effective operations and a greener fleet – may work in opposition to each other. Fleet managers must consider the best, most cost-effective way to “green” their vehicle fleet while ensuring that operations continue to run smoothly. Alternatively, some fleet managers see a greener fleet as a way to reduce the costs associated with their vehicles. This is typically because the vehicles use less fuel or a less expensive fuel, but it may also be due to lower maintenance costs. As a result, it is important for fleet managers to understand the total cost of ownership (TCO) implications of the vehicles they adopt.

Fortunately, there is presently a tremendous array of alternative vehicle options on the market. Fleet operators have a wide range of choices available to them, including different emissions, operational, and cost characteristics. This report aims to help fleet operators differentiate among the various alternatives, with an emphasis on a comparative total cost of ownership analysis. Note that Pike Research focuses primarily on fleet vehicles as they would operate in North America, with additional coverage given to Western European vehicles and operations.

1.2 Alternative Fuel and Propulsion Types

This report examines nine alternative fuel or propulsion types that could be adopted by a fleet in North America and Europe. Pike Research discusses the basic characteristics of each type, including the emissions profiles, fuel economy, fuel and infrastructure issues, availability of vehicles, and their cost. A comparative total cost of ownership (TCO) calculation is provided for the full range of alternative options, as TCO is still a pivotal factor for most fleet operators when choosing to buy vehicles. The alternative fuel and propulsion types considered in this report are:

Biodiesel: Biodiesel is a renewable fuel made from a variety of plant-based feedstocks that can be used instead of diesel, which is made from petroleum. It can be blended with diesel in varying percentages. This report focuses on B20, which has 20% biodiesel to 80% diesel, as this is the highest blend most likely to be used by current fleets.

Ethanol/Flex-Fuel Vehicles: Ethanol is the second major type of biofuel used in transportation. It is an alcohol that is most often blended with gasoline. This report focuses on E85, an ethanol and gasoline mixture of as much as 85% ethanol. Vehicles that run on ethanol are called “flex-fuel vehicles” because they are equipped to fuel with various blends of ethanol or with gasoline alone.

Propane/Autogas: Propane is a liquefied gas derived from natural gas processing and oil refining. In Europe, automotive propane is called autogas. It can be used in vehicles equipped with a propane conversion kit, most commonly in pickup trucks or medium-duty vehicles.



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Compressed Natural Gas: Compressed natural gas (CNG) is a very common fuel in transit operations in the United States and, to a lesser degree in Western Europe. It is also used in light duty vehicles, although at present, few automakers are offering natural gas light duty vehicles in the United States or Western Europe. Vehicles can be “bi-fuel”, which means they are equipped to run on either gasoline or CNG, but this report will focus on pure CNG vehicles.

Stop-Start: Stop-start vehicles (SSVs) are gasoline or diesel vehicles equipped to allow the engine to stop when the vehicle is being slowed or idled, and then restart when driving is resumed. They are refueled at a standard gasoline or diesel fuel pump. They are sometimes called hybrid vehicles, but are not classified as hybrids in this report since they do not have two drivetrains. SSVs are already widely available in Europe and are becoming more available in the United States.

Hybrid Electric: Hybrid electric vehicles are equipped with a gasoline engine and an electric drivetrain. The fuel savings from a hybrid electric vehicle (HEV) varies depending on the system configuration and the vehicle size. HEVs have been commercially available for over a decade, so the technology and how it works is generally familiar to most fleet operators.

Plug-In Hybrid Electric: A plug-in hybrid electric vehicle (PHEV) is a hybrid vehicle that has batteries that can accept a charge from the grid in addition to the vehicle using a liquid fuel. PHEVs can operate in electric mode between 10 to 40 miles, depending on the size of the battery and the drivetrain configuration. This segment is still quite new, and there are few models available in the United States and Europe.

Battery Electric: Battery electric vehicles (BEVs) run only on batteries that are charged from the grid. These vehicles require charging infrastructure. BEV models are beginning to proliferate globally, though they are primarily focused in the smaller vehicle classes.

Fuel Cell: Fuel cell vehicles (FCVs) are equipped with an electric drivetrain and a fuel cell that generates electricity on board from hydrogen. The hydrogen is stored in a compressed gaseous form in tanks FCVs require availability of a hydrogen refueling station. This technology is still under development. FCVs are currently only available in very few, selected markets for three-year leasing.

1.3 Total Cost of Ownership Comparison

The centerpiece of this analysis is a sample comparison of total cost of ownership across all of the fuel and propulsion types featured in this report. This TCO comparison takes into consideration the upfront vehicle price, available incentives that offset the vehicle price, lifetime fuel costs, lifetime maintenance costs, and (in some cases) the vehicle’s residual value.

This is a simplified TCO analysis that does not include taxes or fees; financing; or insurance. These have not been included because they will vary by every locality and fleet. In addition, it is assumed that the difference in these variables will not primarily be determined by the fuel or propulsion type. This TCO is primarily intended to highlight the differences that occur as a result of the fuel or propulsion choice.

The sample TCO primarily focuses on U.S. fleet vehicle operations. It is challenging to make comparisons that are valid across the United States, Canada and Europe, due to differing vehicle availability and cost and fuel prices. In addition, the fuel economy figures provided by the U.S. Environmental Protection Agency (EPA) are not comparable to European fuel economy figures because the European drive cycle for calculating fuel economy is different than the U.S. drive cycle. European figures are used for two portions



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of the analysis that compare diesel sedans and SUVs to alternative fuel options.

The report also provides fleet operators an opportunity to create their own customized comparison. In the Excel worksheet accompanying this report, fleet operators can enter in varying lifetime mileage rates and fuel prices in order analyze their TCO and aid their understanding of how the alternatives will compare based on varying conditions. Fleet operators can also enter their own figures for vehicle price, incentives, miles per gallon (mpg) or miles per kilowatt-hour (kWh), and maintenance costs.

1.3.1 Results of TCO Comparison

Table 1.1 shows the results of the TCO analysis for light-duty sedans based on current fuel prices in the United States and assuming 120,000 lifetime miles on the vehicle. The key factors in this comparative TCO analysis are the upfront vehicle price and the fuel price. The lowest alternative fuel option is the BEV, assuming that the fleet operator is able to claim the $7,500 federal tax credit. This is because of the high efficiency of the electric drivetrain combined with the assumption of relatively low electricity rates for charging.

It is important to note that this analysis does not include the cost of infrastructure, which would potentially add several thousand dollars to the total cost to the fleet operator to adopt BEVs. The TCO also does not assign a price to the opportunity costs that result from the BEV’s 100 mile range. This analysis assumes that a fleet operator will only adopt a BEV if it is appropriate for that fleet’s service parameters. For a BEV, this would mean that the fleet is driven in a fairly limited geographic area and the vehicles are returned to a charging station location each night.

Table 1.1 Estimated Total Cost of Ownership Comparison at Current Fuel Prices with 120,000 Lifetime Miles, United States: 2012

Vehicle Class Electricity

Price Average Vehicle

Price Estimated TCO

BEV-100 Mid-Size (with tax credit) Low $35,230 $34,995

HEV Gas <2.0L Small $21,973 $35,422

4-Cyl, 1-2L Gas Compact $17,184 $35,588

BEV-100 Mid-Size (with tax credit) High $35,230 $36,423

CNG Compact $26,155 $37,398

PHEV-10 Mid-Size (with tax credit) Low $32,000 $40,086

PHEV-10 Mid-Size (with tax credit) High $32,000 $40,821

PHEV-40 Compact (with tax credit) Low $39,145 $41,730

HEV Gas 2.4L Mid-Size $26,783 $41,736

4-Cyl Mid-Size Diesel $23,973 $41,867

4-Cyl Mid-Size Biodiesel $23,973 $42,527

4-Cyl, 2.4L Gas Mid-Size $22,421 $42,876

PHEV-40 Compact (with tax credit) High $39,145 $42,982

SSV 4-Cyl 2.4L Mid-Size Gas $28,613 $47,499

6-Cyl Gas Mid-Size $26,881 $51,882

4-Cyl 2.4L FFV Mid-Size $25,263 $53,440

6-Cyl FFV $29,670 $62,169 (Source: Pike Research)



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Pike Research’s TCO analysis also reveals the benefits of moving to a smaller vehicle, no matter the fuel type. The lowest TCO vehicles are the compact options, whether hybrid, gasoline, or compressed natural gas (CNG). The basic HEV comes in just slightly lower in terms of total lifetime costs than a gasoline compact car under this analysis. If the vehicles were to operate for significantly less than 120,000 miles, the HEV’s fuel savings would not surpass the original vehicle price premium. However, it should be noted that hybrids are typically not the most basic model vehicles, but instead include some upgraded features that would add to the price of a comparable gasoline vehicle.

1.3.2 TCO Results across a Range of Fuel Prices

As noted, the key factors in the comparative TCO analysis are the upfront vehicle price and the fuel price. It is a given that, at present, most alternative fuel or alternative propulsion vehicles carry a price premium over conventionally fueled vehicles. The one exception is the flex-fuel vehicle (FFV), which some OEMs offer as a standard feature. However, this is not true across the spectrum of FFVs. Because the basic gasoline vehicle will tend to have a lower cost than a comparable alternative vehicle, Pike Research’s TCO analysis also looks at a range of fuel prices to determine at what fuel price the fleet operator is able to redeem the cost premium through fuel savings (and, to a lesser degree, maintenance savings). The analysis includes the TCO for a vehicle life of 120,000 miles and 75,000 miles.

Chart 1.1 below shows one example of a TCO comparison with varying fuel prices at 120,000 lifetime miles. The example looks at mid-size sedans with four cylinders and 2.4 liter (L) engines. This is a typical vehicle class in use by fleet operators and it also offers one of the greater ranges of alternative options. The assumptions used for this chart include:

Low price gas: $3.5/gallon

Mid-price gas: $4.0/gallon

High price gas: $5.0/gallon

Low price diesel: $4.0/gallon

High price diesel: $5.0/gallon

Low price B20: $4.2/gallon

High price B20: $5.2/gallon

E85: $3.5/gallon

CNG: $1.75/gge

Low electric rate: $0.01/kWh

High electric rate: $0.14/kWh

PHEV-40 driven on electric power for 80% of lifetime miles

PHEV-10 driven on electric power for 50% of lifetime miles



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Chart 1.1 shows the results of this analysis at high, medium, and low fuel prices. The analysis shows that the HEVs, diesel vehicles, and BEV with an offsetting tax credit all have lower TCO than the pure gasoline vehicle at low gas prices ($3.5/gallon). This TCO advantage will be strengthened as gasoline prices rise. By comparison, the flex-fuel and stop-start options do not pay off their higher sticker prices. It is important to note that, in this example, the FFV and SSV options have a higher price in part because the vehicles offered in the United States are at the higher end of their vehicle class in terms of amenities. This is a typical concern with conducting any TCO analysis, as some vehicle types simply do not have a wide range of offerings available. For these vehicles, it is more challenging to make a direct apples-to-apples comparison. For fleet operators that would have invested in a higher-cost gasoline model, the alternative fuel option may not bring such a large price premium. This could tilt the TCO analysis to favor the SSV or FFV. Fleets that wish to consider this scenario can enter their own data into the customizable charts offered in this report’s data file.

Chart 1.1 Estimated Total Cost of Ownership Comparison for Mid-Size LDV Options with 120,000 Lifetime Miles, United States: 2012

(Source: Pike Research)

1.3.3 Conclusion

The goal of this analysis is to provide fleet operators with some guidance on the comparative economics of the various alternative fuel and propulsion options available for fleets. In reality, most fleets will use a TCO analysis as only one of their considerations. The primary reasons to adopt clean fuel vehicles are, of course, the desire to lower tailpipe emissions, reduce the fleet’s impact on air pollution and climate change, reduce exposure to gasoline price volatility, improve energy security, and generally behave as a “good citizen.” In addition, the fleet operator will be considering the utility of the vehicle adopted, whether it fits their particular type of operations, and the availability of fueling infrastructure. A TCO analysis would only be one factor among all of these considerations.

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Section 8 TABLE OF CONTENTS

Section 1 ...................................................................................................................................................... 1 Executive Summary .................................................................................................................................... 1

1.1 Overview ....................................................................................................................................... 1 1.2 Alternative Fuel and Propulsion Types ......................................................................................... 1 1.3 Total Cost of Ownership Comparison ........................................................................................... 2

1.3.1 Results of TCO Comparison ................................................................................................... 3 1.3.2 TCO Results across a Range of Fuel Prices .......................................................................... 4 1.3.3 Conclusion ............................................................................................................................... 5

Section 2 ...................................................................................................................................................... 6 Alternative Fuel Vehicle Market Overview ................................................................................................ 6

2.1 Introduction .................................................................................................................................... 6 2.2 Baseline for Comparison ............................................................................................................... 7

2.2.1 Vehicle Classes ....................................................................................................................... 7 2.2.2 Alternative Fuel and Propulsion Options ................................................................................. 8

Section 3 .................................................................................................................................................... 11 Alternative Fuel and Propulsion Options ............................................................................................... 11

3.1 Biofuels ........................................................................................................................................ 11 3.1.1 Biofuel Blend Mandates ........................................................................................................ 11 3.1.2 Biodiesel ................................................................................................................................ 12

3.1.2.1 Fueling and Infrastructure ............................................................................................. 12 3.1.2.2 Fuel Economy ............................................................................................................... 12 3.1.2.3 Emissions Profile .......................................................................................................... 12 3.1.2.4 Availability ..................................................................................................................... 13 3.1.2.5 Cost ............................................................................................................................... 13

3.1.3 Ethanol/Flex-Fuel Vehicles .................................................................................................... 13 3.1.3.1 Fueling and Infrastructure ............................................................................................. 14 3.1.3.2 Fuel Economy ............................................................................................................... 14 3.1.3.3 Emissions Profile .......................................................................................................... 14 3.1.3.4 Availability ..................................................................................................................... 14 3.1.3.5 Vehicle Cost .................................................................................................................. 14

3.2 Propane/Autogas (Liquefied Petroleum Gas) ............................................................................. 15 3.2.1 Fueling and Infrastructure ..................................................................................................... 15 3.2.2 Fuel Economy ........................................................................................................................ 16 3.2.3 Emissions Profile ................................................................................................................... 16 3.2.4 Availability .............................................................................................................................. 16 3.2.5 Vehicle Cost .......................................................................................................................... 16

3.3 Compressed Natural Gas ............................................................................................................ 17 3.3.1 Fueling and Infrastructure ..................................................................................................... 17 3.3.2 Fuel Economy ........................................................................................................................ 18 3.3.3 Emissions Profile ................................................................................................................... 18 3.3.4 Availability .............................................................................................................................. 19

3.3.4.1 Conversion versus Original Equipment Manufacturer NGVs ....................................... 19 3.3.4.2 Bi-Fuel Offerings ........................................................................................................... 19 3.3.4.3 Europe .......................................................................................................................... 19 3.3.4.4 North America ............................................................................................................... 20

3.3.5 Vehicle Cost .......................................................................................................................... 21 3.3.6 Medium-Duty Vehicles .......................................................................................................... 21



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3.4 Stop-Start .................................................................................................................................... 21 3.4.1 Fueling and Infrastructure ..................................................................................................... 22 3.4.2 Fuel Economy ........................................................................................................................ 22 3.4.3 Emissions Profile ................................................................................................................... 22 3.4.4 Availability .............................................................................................................................. 22

3.4.4.1 Europe .......................................................................................................................... 23 3.4.4.2 North America ............................................................................................................... 23

3.4.5 Vehicle Cost .......................................................................................................................... 24 3.4.6 Future Trends ........................................................................................................................ 24

3.5 Hybrid Electric ............................................................................................................................. 24 3.5.1 Fueling and Infrastructure ..................................................................................................... 25 3.5.2 Fuel Economy ........................................................................................................................ 25 3.5.3 Emissions Profile ................................................................................................................... 26 3.5.4 Availability .............................................................................................................................. 26

3.5.4.1 Passenger Cars ............................................................................................................ 26 3.5.4.1.1. Europe ...................................................................................................................... 26 3.5.4.1.2. North America .......................................................................................................... 28

3.5.4.2 Medium-Duty Trucks ..................................................................................................... 29 3.5.5 Vehicle Cost .......................................................................................................................... 29

3.5.5.1 Light-Duty Vehicles ....................................................................................................... 29 3.5.5.2 Medium-Duty Trucks ..................................................................................................... 29

3.6 Plug-In Hybrid Electric ................................................................................................................. 30 3.6.1 Short and Long All-Electric Range PHEVs ........................................................................... 30 3.6.2 Fueling and Infrastructure ..................................................................................................... 31 3.6.3 Fuel Economy ........................................................................................................................ 31 3.6.4 Emissions Profile ................................................................................................................... 32 3.6.5 Availability .............................................................................................................................. 32

3.6.5.1 Europe .......................................................................................................................... 33 3.6.5.2 North America ............................................................................................................... 34 3.6.5.3 Medium-Duty Trucks and Vans .................................................................................... 35

3.6.6 Vehicle Cost .......................................................................................................................... 35 3.7 Battery Electric ............................................................................................................................ 35

3.7.1 Range .................................................................................................................................... 36 3.7.2 Fueling and Infrastructure ..................................................................................................... 36 3.7.3 Fuel Economy ........................................................................................................................ 37 3.7.4 Emissions Profile ................................................................................................................... 37 3.7.5 Availability .............................................................................................................................. 37

3.7.5.1 Europe .......................................................................................................................... 38 3.7.5.2 North America ............................................................................................................... 39 3.7.5.3 Medium-Duty Trucks ..................................................................................................... 39

3.7.6 Vehicle Cost .......................................................................................................................... 40 3.8 Fuel Cell ...................................................................................................................................... 40

3.8.1 Fueling and Infrastructure ..................................................................................................... 41 3.8.2 Fuel Economy ........................................................................................................................ 41 3.8.3 Emissions Profile ................................................................................................................... 41 3.8.4 Availability .............................................................................................................................. 41 3.8.5 Vehicle Cost .......................................................................................................................... 42

3.9 Hydrogen Internal Combustion Engine Vehicles ........................................................................ 42 Section 4 .................................................................................................................................................... 43 Incentives and Grants For Alternative Fuel or Propulsion Vehicles ................................................... 43

4.1 Introduction .................................................................................................................................. 43 4.2 North American Incentives and Programs .................................................................................. 43

4.2.1 Federal Level Incentives in the United States ....................................................................... 43



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4.2.2 State Level Incentives in the United States ........................................................................... 44 4.2.3 Canadian Incentives and Programs ...................................................................................... 49

4.3 Europe ......................................................................................................................................... 50 Section 5 .................................................................................................................................................... 54 Total Cost of Ownership Comparison .................................................................................................... 54

5.1 Methodology ................................................................................................................................ 54 5.1.1 Light-Duty Vehicle Prices ...................................................................................................... 54 5.1.2 Lifetime Mileage .................................................................................................................... 56 5.1.3 Fuel Prices ............................................................................................................................. 56 5.1.4 Fuel Economy ........................................................................................................................ 58 5.1.5 Maintenance .......................................................................................................................... 58 5.1.6 Residual Value ...................................................................................................................... 59

5.2 Light-Duty Passenger Cars: Total Cost of Ownership Comparison ............................................ 60 5.2.1 Comparison of Mid-Size Sedan Options in the United States .............................................. 61 5.2.2 Comparison of Small Sedan Options in the United States ................................................... 64 5.2.3 Comparison of Gasoline, Flex-Fuel, and Hybrids in the United States ................................. 69 5.2.4 Comparison of Diesel, SSVs, and Biodiesel in Europe ......................................................... 71

5.3 Light-Duty SUVs and Pickups: Total Cost of Ownership Comparison ........................................ 74 5.4 Medium-Duty Trucks: Total Cost Ownership Costs .................................................................... 76

Section 6 .................................................................................................................................................... 78 Company Directory ................................................................................................................................... 78 Section 7 .................................................................................................................................................... 79 Acronym and Abbreviation List ............................................................................................................... 79 Section 8 .................................................................................................................................................... 83 Table of Contents ...................................................................................................................................... 83 Section 9 .................................................................................................................................................... 86 Table of Charts and Figures..................................................................................................................... 86 Section 10 .................................................................................................................................................. 88 Scope of Study .......................................................................................................................................... 88 Sources and Methodology ....................................................................................................................... 89 Notes .......................................................................................................................................................... 89



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Section 9 TABLE OF CHARTS AND FIGURES

Chart 1.1 Estimated Total Cost of Ownership Comparison for Mid-Size LDV Options with 120,000 Lifetime Miles, United States: 2012 ........................................................................... 5 Chart 5.1 Snapshot of Fuel Cost Comparisons by Region, World Markets: 2010 ................................ 57 Chart 5.2 Estimated Total Cost of Ownership Comparison for Mid-Size LDV Options with 75,000 Lifetime Miles, United States: 2012 ........................................................................... 62 Chart 5.3 Estimated Total Cost of Ownership Comparison for Mid-Size LDV Options with 120,000 Lifetime Miles, United States: 2012 ......................................................................... 63 Chart 5.4 Estimated Total Cost of Ownership Comparison for Small LDV Options with 75,000 Lifetime Miles, United States: 2012 ....................................................................................... 65 Chart 5.5 Estimated Total Cost of Ownership Comparison for Small LDV Options with 120,000 Lifetime Miles, United States: 2012 ......................................................................... 66 Chart 5.6 Estimated Total Cost of Ownership Comparison for Small LDV Options with Residual Value with 75,000 Lifetime Miles, United States: 2012 .......................................... 68 Chart 5.7 Estimated Total Cost of Ownership Comparison for Gas, FFV, and Hybrid with 75,000 Lifetime Miles, United States: 2012 ........................................................................... 70 Chart 5.8 Estimated Total Cost of Ownership Comparison for Gas, FFV, and Hybrid with 120,000 Lifetime Miles, United States: 2012 ......................................................................... 71 Chart 5.9 Estimated Total Cost of Ownership Comparison for Diesel and SSV Sedans with 120,000 Lifetime Miles, Europe: 2012 ................................................................................... 72 Chart 5.10 Estimated Total Cost of Ownership Comparison for Diesel and SSV Sedans with 75,000 Lifetime Miles, United States: 2012 ........................................................................... 73 Chart 5.11 Estimated Total Cost of Ownership Comparison for Pickups and SUVs with 120,000 Lifetime Miles, United States and Europe: 2012 ..................................................... 75

Figure 2.1 Cutaway Cab and Stripped-Chassis Vehicles ......................................................................... 7 Figure 4.1 U.S. DOE Clean Cities Vehicle Breakdown, by Technology: 2004-2009 ............................. 49

Table 1.1 Estimated Total Cost of Ownership Comparison at Current Fuel Prices with 120,000 Lifetime Miles, United States: 2012 ........................................................................... 3 Table 3.1 Biofuels in Use Today, Unite States and Europe: 2012 ........................................................ 11 Table 3.2 Select Biofuel Blending Mandates and Targets by Country .................................................. 11 Table 3.3 Comparison of Internal Combustion Engine Fuel Properties ................................................ 12 Table 3.4 Comparison of Honda Civic Gasoline, Hybrid, and CNG, United States: 2011 .................... 18 Table 3.5 CNG Light-Duty Cars and Vans Available in Europe: 2012 .................................................. 19 Table 3.6 Dedicated OEM Light-Duty NGVs, United States: 2011 ....................................................... 20 Table 3.7 Automaker Stop-Start Systems in Europe: 2011 .................................................................. 23 Table 3.8 Automaker Stop-Start Systems in the United States: 2011-2012 ......................................... 24 Table 3.9 Typical Vehicle GHG Calculations ........................................................................................ 26 Table 3.10 Vehicle Roadmap for Light-Duty HEV Passenger Vehicles, Europe: 2011-2012 ................. 27 Table 3.11 Vehicle Roadmap for Light-Duty HEV Passenger Vehicles, North America: 2011-2012 ..... 28 Table 3.12 Selected List of Available MD Hybrid Trucks ........................................................................ 29 Table 3.13 Typical Truck Costs ............................................................................................................... 30 Table 3.14 Comparison of Toyota Prius, Toyota Prius PHEV, and Chevrolet Volt ................................. 31 Table 3.15 Vehicle Roadmap for Light-Duty PHEVs, Europe: 2012 and Beyond................................... 33 Table 3.16 Vehicle Roadmap for Light-Duty PHEVs, North America: 2012 and Beyond ....................... 34



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Table 3.17 Selected List of Plug-In Hybrid Trucks Being Developed Globally ....................................... 35 Table 3.18 Comparison of HEV, ICE and BEV Options .......................................................................... 37 Table 3.19 Vehicle Roadmap for Light-Duty BEVs, Europe: 2012 and Beyond ..................................... 38 Table 3.20 Vehicle Roadmap for Light-Duty BEVs, North America: 2012 and Beyond .......................... 39 Table 3.21 Selected List of Available Battery Electric Trucks ................................................................. 39 Table 4.1 Alternative Fuel Vehicle Incentives by State, United States: 2012 ....................................... 44 Table 4.2 Light-Duty HEV, PHEV, and BEV Purchase Incentives by Country, Europe: 2012 .............. 50 Table 4.3 Natural Gas Vehicle Incentives, Europe: 2012 ..................................................................... 52 Table 4.4 Biofuel Vehicle Incentives, Europe: 2012 .............................................................................. 53 Table 5.1 Comparison of Kelley Blue Book Value of Honda Civic Gasoline, Hybrid, and CNG, United States: 2012 ............................................................................................................... 59 Table 5.2 Estimated Total Cost of Ownership Comparison of LD Passenger Cars at Current Fuel Prices with 120,000 Lifetime Miles, United States: 2012 .............................................. 60 Table 5.3 Estimated Total Cost of Ownership Comparison for Mid-Size LDV Options with 120,000 Lifetime Miles, United States: 2012 ......................................................................... 62 Table 5.4 Estimated Total Cost of Ownership Comparison for Mid-Size LDV Options with 75,000 Lifetime Miles, United States: 2012 ........................................................................... 64 Table 5.5 Estimated Total Cost of Ownership Comparison for Small LDV Options with 75,000 Lifetime Miles, United States: 2012 ....................................................................................... 65 Table 5.6 Estimated Total Cost of Ownership Comparison for Small LDV Options with 75,000 Lifetime Miles, United States: 2012 ....................................................................................... 67 Table 5.7 Estimated Total Cost of Ownership Comparison for Small LDV Options with 120,000 Lifetime Miles, United States: 2012 ......................................................................... 68 Table 5.8 Comparison of Gasoline and Flex-Fuel Vehicles with 75,000 Lifetime Miles, United States: 2012 ............................................................................................................... 69 Table 5.9 Estimated Total Cost of Ownership Comparison for Gas, FFV, and Hybrid with 75,000 Lifetime Miles, United States: 2012 ........................................................................... 70 Table 5.10 Estimated Total Cost of Ownership Comparison for Gas, FFV, and Hybrid with 120,000 Lifetime Miles, United States: 2012 ......................................................................... 71 Table 5.11 Estimated Total Cost of Ownership Comparison for Diesel and SSV Sedans with 120,000 Lifetime Miles, Europe: 2012 ................................................................................... 72 Table 5.12 Estimated Total Cost of Ownership Comparison for Diesel and SSV Sedans with 75,000 Lifetime Miles, United States: 2012 ........................................................................... 73 Table 5.13 Estimated Total Cost of Ownership Comparison for Pickups and SUVs with 120,000 Lifetime Miles, United States and Europe: 2012 ..................................................... 76 Table 5.14 Total Truck Cost of Ownership, United States: 2012 ............................................................ 77



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Section 10 SCOPE OF STUDY

Pike Research has prepared this report to provide fleet operators with an overview of nine alternative fuel and propulsion vehicle types available today. This report briefly looks at the emissions and fuel economy characteristics, as well as fueling and infrastructure needs, of each type. It also discusses the availability of such alternative fuel and propulsion options in a range of vehicle classes that are prevalent in fleets in Europe and North America The report offers a list of incentives and grant programs available in Europe and North America for the adoption and operation of alternative technology vehicles.

The report’s major objective is to provide a tool for fleet operators to evaluate and compare these alternative fuel or propulsion options based on the total cost of ownership (TCO) of the vehicles. To support this goal, Pike Research provides a comparative analysis of TCO for the alternative fuel and propulsion types covered using averages for light-duty and medium-duty delivery vehicles. This is a simplified TCO comparison that takes into consideration the upfront vehicle price, available incentives that offset the vehicle price, lifetime fuel costs, lifetime maintenance costs, and (in some cases) the vehicle’s residual value. This simplified TCO is primarily intended to highlight the differences that occur as a result of the fuel or propulsion choice. In the Excel worksheet accompanying this report, this report also provides a customizable TCO form where fleet operators can enter in varying lifetime mileage rates, fuel prices, vehicle price, incentives, miles per gallon (mpg) or miles per kilowatt-hour (kWh), and maintenance costs. The miles per gallon figures are primarily based on U.S. Environmental Protection Agency estimates, which are different than the figures that would be used in Europe.

The report’s purpose is not to provide an exhaustive technical assessment of the technologies and industries covered. Rather, it aims to provide a strategic examination of alternative fuel and alternative propulsion vehicle types from an overall tactical business perspective. Pike Research strives to identify and examine new market segments to aid readers in the development of their business models.



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SOURCES AND METHODOLOGY

Pike Research’s industry analysts utilize a variety of research sources in preparing Research Reports. The key component of Pike Research’s analysis is primary research gained from phone and in-person interviews with industry leaders including executives, engineers, and marketing professionals. Analysts are diligent in ensuring that they speak with representatives from every part of the value chain, including but not limited to technology companies, utilities and other service providers, industry associations, government agencies, and the investment community.

Additional analysis includes secondary research conducted by Pike Research’s analysts and the firm’s staff of research assistants. Where applicable, all secondary research sources are appropriately cited within this report.

These primary and secondary research sources, combined with the analyst’s industry expertise, are synthesized into the qualitative and quantitative analysis presented in Pike Research’s reports. Great care is taken in making sure that all analysis is well-supported by facts, but where the facts are unknown and assumptions must be made, analysts document their assumptions and are prepared to explain their methodology, both within the body of a report and in direct conversations with clients.

Pike Research is an independent market research firm whose goal is to present an objective, unbiased view of market opportunities within its coverage areas. The firm is not beholden to any special interests and is thus able to offer clear, actionable advice to help clients succeed in the industry, unfettered by technology hype, political agendas, or emotional factors that are inherent in cleantech markets.

NOTES

CAGR refers to compound average annual growth rate, using the formula:

CAGR = (End Year Value ÷ Start Year Value)(1/steps) – 1.

CAGRs presented in the tables are for the entire timeframe in the title. Where data for fewer years are given, the CAGR is for the range presented. Where relevant, CAGRs for shorter timeframes may be given as well.

Figures are based on the best estimates available at the time of calculation. Annual revenues, shipments, and sales are based on end-of-year figures unless otherwise noted. All values are expressed in year 2012 U.S. dollars unless otherwise noted. Percentages may not add up to 100 due to rounding.



90

Published 2Q 2012

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