Hybrid incentives

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Until … economies of scale are established, most heavy-duty hybrids will be sold at a very high premium compared to non-hybrids.” –Dennis Slagle, president and CEO, Mack Trucks

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It’s the “Catch-22” of the hybrid truck industry: higher sales volume of these trucks would significantly helps lower the cost of hybrids, but their currently high sticker price of hybrid trucks compared to their diesel-only brethren keeps sales low. So what to do?

That’s a point where OEMs, fleets, industry experts, and (yes, you knew there’d be a few) members of Congress agree that more incentives to spur sales of hybrid trucks are needed. Not an easy solution to swallow, considering the debt load our nation is carrying right now ($11 trillion and rising) and the still-abysmal state of our economy.

Yet here we were, at an event in front of the U.S. Capitol building – lyrically dubbed “Hybrid Day on the Hill” – calling for increased government largesse to offset the purchase price premium for hybrid trucks and buses.

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Yet if you think about it, this is actually a pretty smart idea, providing federal incentives to spur the purchase of hybrid trucks – be they tax credits, rebates, whatever. Hybrids make a good fit in many different truck applications – pickup and delivery, refuse, beverage, utility operations, you name it – and they provide an awesome “one-two” punch in terms of reducing fuel usage AND tailpipe emissions simultaneously.

The best thing is, if the batteries go dead for whatever reason, the truck isn’t stuck on the side of the road. Rather, the diesel engine can keep it up and running and in service – and thus, from an operational point of view, there isn’t an extreme Achilles heel with this technology.

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Yes, a lot of work still needs to be done – recycling the batteries required to provide electric power onboard these hybrid trucks is the big one – but it’s an effective solution and it’s available now, Over 1,000 hybrid trucks are in service or on the production line right now – it’s not technology, like hydrogen-powered fuel cells, that’s at least a decade away from practical every day use.

"Our hybrid technology will be commercially viable, yet it will take time to establish a robust hybrid market for heavy vehicles that will enable us to invest in large scale production," said Dennis Slagle, president and CEO of Mack Trucks. "Incentives will accelerate the adoption of Class 8 hybrids and bring forward the positive environmental changes."

“Government incentives are necessary to establish a market for these vehicles with environmental benefits, similar to the incentives offered for hybrid passenger vehicles,” said Thomas Kelly III, Mack’s senior vice president-product portfolio management (seen in the photo below standing at right, talking with John Walsh, Mack's director of communications). “The public benefit of these incentives will be reduced environmental impact as hybrid heavy-duty trucks become more common.”

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He believes some existing short-term federal tax credit programs apply to heavy-duty hybrids, and some incentives in the federal stimulus bill could possibly apply as well. But Kelly also thinks longer-term incentives are needed. “For example, we'd like to see Congress extend the federal Alternative Motor Vehicle Credit, enacted by the Energy Policy Act of 2005, which expires at the end of 2009,” Kelly said.

I talked to Kelly at the “Hybrid Day on the Hill” event last week (you can see a video interview with him at that event below) and to his mind, the flexibility of hybrid technology is its greatest asset – technology that can be used in shuttle buses, package delivery vans, refuse trucks, and even linehaul tractors. Mack is currently pilot testing two hybrid refuse truck designs with Waste Management and New York City’s Dept. of Sanitation to see just what kinds of savings the technology can generate.

“We’re talking fuel savings, savings from reduced wear and tear, and of course less noise – that’s a big benefit, especially in urban truck operations,” he told me.

Hybrids are certainly not a silver bullet to our energy security and environmental issues, but they do offer a strong advantage in that fleets don’t have to turn their operations upside down and inside out to incorporate them. That’s worthy of some investment dollars at the federal level, I think.

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