Incentives to spur NA hybrid truck market

TORONTO – The number of hybrid trucks produced in North America will multiply by 50 times over the next six year, according to the latest study by Frost & Sullivan.

Propelled by government incentives and grants, the number of hybrids will jump from just over 4,000 units to 222,000 in 2016, the firm reports in its study, Strategic Analysis of North American and European Hybrid Truck, Bus and Van Market.

Growth will also be spurred by improvements in hybrid technology, including better fuel efficiency, lower emissions and fewer maintenance costs.

"Amongst alternative powertrain technologies and fuels, hybrid commercial vehicles exert the least pressure on the existing energy and transportation infrastructure and require only minimal modification to the current fueling infrastructure," said Sandeep Kar, Frost & Sullivan global program manager.

However, hybrid trucks feature energy storage systems, control and power electronics and rotating machines, which are expensive technologies creating considerable cost barriers. Storage systems such as batteries must be replaced every four to five years based on the vocational application.

"Currently, the high upfront cost associated with hybrids is countered with federal grants, incentives, and tax rebates," said Kar. "Although such incentives offer relief in the short term, for hybrids to be commercially viable in the long term, the upfront cost difference should reduce considerably."

Private fleets in North America and Europe have emerged as early adopters of hybrid commercial vehicles.

"Standardization of key enabling technologies will not only reduce R&D expenses and complexity but also create a foundation for launching aggressive price reduction strategies that are necessary for stoking market growth," said Kar.

Kar speculates that hybrid trucks will begin to penetrate urban markets as transportation becomes more regionalized.

Major amalgamated "network" cities are being split up into three belts.

The first is where high-income, small families reside along with retail and financial institutions. Here, delivery will be primarily in small trucks and delivery vans, many of them hybrid electric vehicles.