A recent study projects that medium-duty hybrids will garner the most attention from North American fleets in the near term, as they should provide the best fit for meeting the energy, environmental, and freight trends predicted for the next five years.

In its newly released Strategic Analysis of the North American and European Hybrid Truck, Bus and Van Markets, research firm Frost & Sullivan said several key trends will intersect in the near future: the growth of “mega-cities,” resulting in more congested urban roadways; energy security; and the need to reduce emissions in the most cost-effective manner.

Taken together, those issues will combine to drive wider adoption of predominantly medium-duty (Class 4-6) hybrid models in North America and Europe, said Sandeep Kar, global program manager for Frost & Sullivan.

“The major reason for wider hybrid adoption to start with is they don’t create any ‘infrastructure’ pressure,” he told FleetOwner. “They don’t require a new refueling or re-charging infrastructure as do natural gas or all-electric vehicles will. From an environmental standpoint, with battery power already onboard, they can reduce or eliminate engine idle time as well as overall fuel consumption, leading to lower emissions.”

Combining hybrids with biofuels such as biodiesel improves their energy consumption and environmental even further, noted Kar, again without requiring massive infrastructure investment to support their operation.

Medium-duty hybrids are more suited to handle future freight trends being created by “mega-cities,” which are defined as urban areas with a population of 10 million or more. Today, there are 11 areas with populations of 15 million or more and just five years from now, the world is projected to have 24 such “mega-cities,” which will require more maneuverable freight hauling capability within their borders.

“Long-haul trucks will continue to link the cities, but the light-medium duty models will be best suited for freight transportation within their boundaries, and in such areas strengthening emission, fuel-efficiency, congestion, noise, idling and other type of regulations will catalyze demand for hybrid and electric commercial vehicles” said Kar.

However, in the mega-urban areas, Kar said that hybrids will face stiff competition from purely electric- driven light commercial vehicles, which will have greater market penetration potential.

All told, Frost & Sullivan estimates that collectively North America and Europe will see a 76.4% compound annual growth rate in hybrid truck demand, reaching 222,000 total units by 2016.

That volume, however, is a drop in the bucket compared to the total commercial vehicle production the firm projects will exist in 2016 – some 3.5 million to 4 million units between North America and Europe. That underscores the challenge hybrid technology still faces in winning acceptance from trucking, particularly for-hire fleets.

“Several challenges remain for hybrids, especially upfront and life-cycle cost benefits,” Kar noted. “Much of it relies on overcoming the initial price premium for hybrid trucks and payback in fuel savings, which can take 5 years or more. Price right now is the biggest challenge and it needs to be brought down.”

Yet, Frost & Sullivan’s fleet manager study last year – which focused on the top 100 fleet managers of the largest fleets in U.S. – indicated that 24% of those polled were actively considering hybrid trucks for the fleets, despite an economy reeling heavily under recession. “This is definitely a good pointer for future hybrid truck demand,” Kar said.

Rising fuel prices and tightening regulations, coupled with declining prices brought about by economies of scale could accelerate hybrid truck adoption rates, especially in select niches, he stressed.

“Hydraulic hybrids, for example, have a particular ‘sweet spot’ in the refuse truck market,” Kar explained. “The upfront costs are lower compared to electric hybrids and the fuel savings can generate payback in as little as 3 years. Refuse is a market where 8,000 to 10,000 units are sold on a yearly basis, and we could see up to 50% of that volume go to hydraulic hybrids in the medium to long term.”