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Fleet owners push the pedal on alternative fuels

Operators of trucks and corporate fleets move slowly but are the leading edge of the move to alternative powertrains, such as electric vehicles and natural gas.

NORWOOD, Mass.--Trucks and other fleet vehicles are the unsung heroes in the move to alternative fuels.

Operators of fleet vehicles are important leading-edge users of everything from electric cars to natural gas-fueled trucks, say auto industry analysts. As more auto technologies come to market, fleet operators expect that each will fill a specific role, rather than have one technology fit every need, fleet operators said yesterday at the AltWheels Annual Fleet Day here.

All-electric delivery trucks used for city routes, for example, are more comfortable to drive and are cheaper to fuel compared to convention diesel trucks. Hybrids, meanwhile, are better suited for longer-range routes while improvements to aerodynamics, such as "skirts" placed alongside of long-haul trailers, usually pay for themselves quickly.

Often companies started work on alternative fuels because of a corporate sustainability or environmental initiative. But fleet operators said that the economics have to make sense. At Staples, alternative vehicles have to be equal or less than the cost of conventional vehicles after government grants and incentives.

"We are not going to overpay for vehicles," said Mike Payette, fleet equipment manager from Staples. "We don't want to be the greenest delivery vehicle company that just went out of business."

A number of companies have been experimenting with alternative powertrains in fleet vehicles for years, but fleet owners have emerged as key levers to bringing down the cost of new technologies.

Compared to consumers, corporations are better suited for alternatives because they can accrue greater savings on fuel and have well-known routes. That means they can, for example, work around limits in electric vehicle battery range and fuel trucks with natural gas or propane from central locations. General Electric and Google, for example, are two high-profile companies that are investing in electric cars and charging stations for employees.

But even if the fuel is cheaper, alternative powertrains require an upfront investment that can be substantially more. And without a corporate initiative around environmental sustainability and green technologies, many fleet operators continue with the status quo, fleet operators said.

There are other challenges, such as outdated registration processes that delay roll-outs of electric vehicles, and focusing on the technology, rather than the business benefit, said Alison Sander, the founder of the AltWheels nonprofit.

"Although each of the new technologies is cool to talk about, there's so much more than can be done around efficiencies (such as better routing) and smart transportation, such as telematics and other IT technologies," Sander said. "They don't seem as exciting as a new hydrogen vehicle, but they have quicker paybacks."

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At delivery company Braun Express, the company typically doesn't apply for grants but instead focuses on fuel savings, which dovetails with environmental goals, said fleet manager Steve Normandin. For example, the company has put auxiliary batteries to power electronics and cooling on long-haul trucks, which pay for themselves in less than a year in saved diesel.

The financial picture for electric trucks, which are still more expensive than diesel, is improving as batteries allow for longer ranges and faster charge times. A few years ago, some fleet owners were disappointed with the results of trials, but today's truck batteries will be replaced with substantially better batteries five to eight years from now, noted Payette.

Nissan, which makes the all-electric Leaf, is planning on having a dedicated electric light-duty vehicle, said Ken Tenure, electric vehicles operations manger for Nissan in the northeast.

The challenge for automakers is developing products that don't require fleet customers to take on too much risk, said Jon Coleman from Ford.

"Fleet managers are risk-averse," he said. "In the case of alternative fuels, you have to be the early adopters but it's incumbent on you to get over risk aversion and figure out what works for you."