Navistar Bullish on Electric Vehicles

Electric vehicles (EVs) designed specifically for light commercial usage are “a product whose time is now,” largely due to diesel prices that are expected to remain high for the foreseeable future, according to a Navistar executive.

“What we’re seeing is a confluence of factors,” explained Mark Aubry, director of strategy, sales & marketing for Navistar’s eStar electric truck, in remarks he made here at the NAFA 2011 Institute & Expo.

“More robust EV technology is being deployed now, battery costs are lower, and there’s rising concern about both the current and future costs of petroleum fuels,” he said. “There are also a range of federal and state incentives in place to provide significant opportunities for early adopters to deploy more EVs. These are all positive factors for creating more demand.”

Aubry pointed to a study conducted by global research firm Frost & Sullivan last year that projects some 64,817 Class 2-3 light-duty EVs should be sold in North America by 2016, predominantly configured as parcel delivery vans, small shuttle buses, etc. He noted that is the very market Navistar is targeting for the eStar.

By contrast, only 26,635 medium-duty EVs (between 3.5 and 16 tons GVW) and 565 heavy-duty EVs (16 ton GVW or greater) are expected to be built and sold in 2016, according to Frost & Sullivan.

“Nearly a third of all commercial vehicles sold every year in the U.S. are in the Class 2-3 space,” Aubry said. “We’re also now seeing more interest in these trucks from Mexico and China.”

First introduced in 2009 and built via the Navistar-Modec EV Alliance, the all-electric eStar is a Class 2c-3 truck with a range of up to 100 miles per charge. That’s the typical distance covered by most urban P&D vehicles during an eight hour work shift, Aubry noted.

The eStar requires six to eight hours to be fully recharged and its entire battery pack is designed to be easily “swapped out” in as little as 20 minutes to give it more operational flexibility, according to Aubry.

He pointed out that the desire to eliminate consumption of petroleum-based fuels altogether by truck fleets remains the critical tipping point for commercial EVs. The U.S. consumes 22 million barrels of oil per day, with 73% of it consumed by the transportation sector, he added.

Data from the American Trucking Assns. (ATA) indicates the cost of that consumption by trucking is only increasing. In 2010, ATA estimated that the trucking industry spent some $101.5 billion on diesel fuel – a 28% increase over 2009. And even before the current spike in crude oil prices, the trucking lobby projected that motor carriers would spend roughly $20 billion more at the pump in 2011, for a total fuel bill of $121.5 billion.

“Commercial trucks alone burn 98-million gallons of fuel per day, and the rising cost of that fuel is making EVs more attractive,” Aubry stated.

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