Sandeep offers his insights on the growth opportunties presented by the emergence of te hybrid and electric commercial truck market.

1. Class 6-8 Truck Hybrid Powertrain
Systems Market
Open for Business
HTUF 2009
Atlanta
Sandeep Kar
Global Program Manager, Commercial Vehicle Research

2. Consumer Research: Voice of your Customers Must Be Heard to
Develop Winning Solutions
Fleet Managers belonging to private and for-hire vocational and on-highway fleets will be
instrumental in offering growth momentum to the hybrid powertrain systems market.
It is time to listen to the VOICE of YOUR CUSTOMERS
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3. Highest Ranking Benefits of Powertrain Technologies:
Clear and Present Demand for Hybrid Powertrain Technologies
Highest Ranking Benefits of Powertrain Technologies
(N=109)
#1 ranking #2 ranking #3 ranking
Fuel Efficiency 59% 17% 12%
Reliability 17% 19% 18%
Reduced Maintenance Requirement 5% 20% 22%
Longer Lifecycle 5% 9% 10%
Attractive Lifecycle Costs 6% 6% 10%
Effectiveness Under All Operating Conditions 6% 8%
Residual Value 6% 8%
Hybrid Powertrain
Technologies-
Reduce Idling 6% 5% Offers Solutions
But Poses
Lower Weight Penalty 5% Challenges Too!!
Low Level Emissions
Acces to Powertrain Support Infrastructure
Note: Proportions less than three not shown numerically in chart. 0% 20% 40% 60% 80% 100%
Q: When purchasing powertrain technologies, please rank the top three benefits that are most
important to your fleet from the following list below?
Source: Frost & Sullivan
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4. Purchase Intentions of Powertrain Technologies:
Hybrids Gaining Traction Among Fleet Managers
Level of Purchase Intention
Powertrain Technology
(N=109) Active Passive
(Are Considering) (Might Consider) No Interest
Automatic/Automated Transmission 50% 42% 8%
Selective-Catalytic Reduction (SCR) 39% 51% 9%
Biodiesel 38% 57% 5%
Compressed Natural Gas 15% 57% 28%
Hybrid Trucks 24% 61% 16%
Navigation Based Fuel Consumption
22% 66% 12%
Optimization
In January, 2009 85% of the top 100 fleet managers reported either active or
passive interest in purchasing hybrid trucks
However, amongst alternative powertrain technologies biodiesel emerged as a
more preferred technology when compared to hybrid powertrain technology.
Demand for hybrid trucks slowly but surely on the rise, especially in the current
environment as diesel prices show promise of an increase and regulations get
stronger.
Source: Frost & Sullivan
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5. Issues Driving Commercial Truck Industry’s Adoption
of Hybrid Powertrain Systems
Market Development
Fuel Economy
Diesel Price Volatility, EPA,
Aftertreatment Penalty
Emissions
Strengthening Regulatory
Environment, Poor Green Image
Idling
Idling Emission and Noise Reduction
Low Cost Power Requirement
Lifecycle Cost
Engine and Brake Wear and
Conventional HD Trucks Maintenance Issues Hybrid HD Trucks
Driver Retention
Manual Transmissions, Noisy Driving
Conditions, Hotel Power
Truck Design Issues
Power Assistance Requirement,
Unoptimized Engine Operation
Source: Frost & Sullivan
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6. Fuel Efficiency Enhancement of Class 6-8 Trucks Through A
Combination of Modifications and Regulatory Support
Class 6-8 Truck Fuel Efficiency Enhancement
Lightweight Structural and
Body Materials
Low-viscosity Lubricants
Advanced Smaller
Electronic Air-Disc Brakes,
Turbocharger Engine,Camless
Controls and Regenerative Braking
Engine
Modulation
Vehicle Geometry
Aerodynamic Modifications
Fuel Injection,
Hybrid Reduced Engine
Valve Actuation
Improvements
Powertrain Friction Reduced Trailer Gap
Low Resistance Tires
Automated/
Advanced Lighter Fuel Tank
Automatic Auxiliary
Thermal
Transmission Power Unit
Management
Other Design Modifications
Powertrain Systems Modifications for Hybrid Trucks Higher Lesser Optimum
Loads Congestion Speed
Regulatory Support
2007 2015
Source: Frost & Sullivan 6

7. Hybrid Powertrain Systems Market: Convergence of Advanced
Technologies, Creation of New Revenue Streams
Class 6-8 Truck
There are two broad categories of hybrid Hybrid
Powertrain
Class 6-8 trucks, based on the energy Systems
Market
storage system and the hybrid propulsive
power delivery mechanism. These two
Control and Electrical and
categories are: Energy
Power Hydraulic
Storage
• Electric Hybrids Systems
Electronics Rotating
Systems Systems
• Hydraulic Hybrids
Since most Class 6-8 trucks use diesel fuel,
the hybrid trucks are referred as diesel- Batteries Control
Electric
Traction
electric or diesel-hydraulic hybrids. Electronics
Motors
Class 6-8 truck hybrid powertrain systems
market can be segmented into the following
market segments: Power
Hydraulic
Ultracapacitors Pump-
Energy storage systems market Electronics
Motors
Control and power electronics systems
market
Electric and hydraulic rotating systems Hydraulic
Accumulator
market Reservoir
Source: Frost & Sullivan
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8. North American Countries and Broad Market Nuances
Specific to Hybrid Truck Demand
Absence of Cold Starting Significant
Comprehensive and Operating Long-Haul
Federal tax Reliability
Incentives/Credits Truck
Challenge Smaller
Demand
Market
Perimeter
Truckmakers
and Fewer
Incorporating
Specialized
Hybrid
Fleets
Powertrain
Strengthening Systems
Regulations
(Emissions,
Idling, Fuel-
Increasing
Efficiency)
Comparatively Government Canada Vocational
Higher Push Truck
Fuel Prices and Proposed Demand
Introduction
of Incentives
Absence of
Comprehensive
On-Highway Significantly
Trucking Higher
Focused Purchase Price Over-burdened
Hybrid Compared to Service and
Solutions Diesel Trucks Maintenance
Infrastructure Cold-starting
Issues in
Extensive Northern
Testing by U.S.
Key End-
User
Groups
Larger Market
Perimeter and
Greater
Number of
USA Attractive
Specialized Increasing Truckmakers, Fuel Price Adoption
Fleets Medium Duty Governments, and Volatility Incentives,
Truck Demand End-Users Focusing and Tax Credits,
and Production Extensively On Regulatory and Financing
Green Pressures
Technologies
Source: Frost & Sullivan
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9. Total Class 6-8 Truck Hybrid Powertrain Systems Market:
Market Drivers and Restraints (North America), 2008-2015
• Tectonic Changes in North American and Global Automotive Industry
• Recent Fuel Price Volatility Expediting Development and Introduction
• Government Incentives, Attractive Leasing Options, and High Degree of Marketing Impetus
• Technology Evolution and Maturity Accelerating Original Equipment Market Adoption
• OE Production Initiation Inducing Economies of Scale
• Driver and Fleet Adaptability and Preference Catalyzing Rising Fleet Interest
DRIVERS
• Regulation Compliance Support Enabled by Hybrid Powertrain Systems Driving Demand
• Rising Congestion in Urban Areas Favoring Utilization of Hybrid Trucks
• Maintenance Cost Reduction Potential Promising Reduced Lifecycle Cost
• Development of Comprehensive Supply Chain Supporting OE Market's Development
Source: Frost & Sullivan
• Steep Price Difference Between Hybrid and Conventional Trucks
• Psychological Inertia of the Trucking Industry, Government, and OE Market
• Fuel Price Decline and Economic Slowdown Deflating Consumer Interest
• Inability to Fully Complement Class 8 Long-Haul Operations
• Unestablished Performance, Technology Attributes, and Standardization
• Battery-related Challenges Raising Concerns
RESTRAINTS
• Safety and Maintenance Issues Posing Acceptance Hurdles
• Lack of Comprehensive Government Incentives in Canada
• Form-Factor and Integration Issues
• Sub-optimal Tier 1 and Truckmaker Involvement
• Development of Alternative Fuel and Fully-electric Powertrain Technologies
• Energy Footprint Conundrum Offering Fuel to Detractors of Hybrid Technologies
Source: Frost & Sullivan
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10. Total Class 6-8 Truck Hybrid Powertrain Systems Market:
Revenue Forecast (North America), 2005-2015
500
400
evenues ($ Million)
300
200 R
AG %
C .8
70
R
100
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: Frost & Sullivan
• The North American Class 6-8 truck hybrid powertrain systems OE market, consisting of energy storage
systems, control and power electronics systems, and electrical and hydraulic rotating systems, is
expected to generate $406.8 million by 2015.
• The hybrid powertrain systems market’s revenues will start showing robust growth rates post 2010, after
the industry puts the EPA 2010 regulation compliance issues and the economic slowdown behind it.
• A healthy compound annual growth rate of 70.8 percent reveals that this market offers lucrative growth
opportunities to market participants in the medium-long term.
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11. Total Class 6-8 Truck Hybrid Powertrain Systems Market:
Key Market Engineering Measurements, 2008
Measurement Name Measurement Trend
Market age (2008) 2 Yrs Infancy
Revenues (2008) $ 9.6 Million Increasing
Potential revenues (2015) $ 406.8 Million ---
Base year market growth rate (2008) 292.3% Increasing
Forecast period market growth rate (2008-2015) 70.8% ---
Hybrid truck production (2008) 0.6 Thousand Increasing
Forecast period units growth rate (2008-2015) 81.8% ---
Average Price: Diesel-Electric Hybrid Powertrain System/Module (2008) $ 15,976 Decreasing
Average price: Hydraulic Hybrid Powertrain System/Module (2009) $ 7,440 Decreasing
Average product development time 2 Yr -2.5 Yrs Decreasing
Industry average R&D expenditure per System $ 1,918 Decreasing
Market Concentration (Combined market share of top 3 competitors, 2008) 100 % Decreasing
Competitors (Active market competitors in base year) 41 Increasing
Degree of competition (Scale of 1 to 10: 1 being minimum) 7 Increasing
Degree of technical change (Scale of 1 to 10: 1 being minimum) 8 Increasing
Customer satisfaction (Scale of 1 to 10: 1 being minimum and 10 maximum) 7 Increasing
Customer loyalty 7 Decreasing
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12. Class 6-8 Hybrid Truck Production: Hybrid Trucks to Set to Account
for 8 Percent of Total Truck Production by 2015
Hybridization of North American Commercial Trucks (Class 6-8) : Production Volumes 8% of Truck
and Market Shares of Major OEMs (2008-2015), Hybrid Power Source (2009-2012) Production
Hybrid Production
39,400
Electric Hybrid 100 O thers
80.8%
Hydraulic Hybrid 90 CAGR= Volvo/Mack-
11%
80
PACCAR
70
23%
stallatio (%)
60
n
Hybrid Production
600 50
PACCAR
27% 40 Navistar
In
39%
Navistar 30
62% 20 Daimler
Daimler-11%
10 16%
2008 0
2015
2009 2010 2011 2012
Truck Design
Issues Conventional HD Trucks
Driver
Retention
Fuel-
Idling Lifecycle Emissions Hybrid HD Trucks
Economy
Cost
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13. Energy Storage Systems: Batteries Will Store Energy in Vast Majority
of Diesel Hybrids, 2005-2015
Source: Frost & Sullivan
• Batteries will continue remaining the most widely installed energy storage system in Class 6-8 hybrid trucks.
• Hydraulic energy storage systems will start experiencing OE market adoption in 2008. By 2015, 28.2
percent of all Class 6-8 trucks manufactured will feature hydraulic energy storage systems.
• Ultracapacitors will be able to penetrate a very small portion of the total hybrid truck production over the
20012-2015 period. In 2015, 3.8 percent of all hybrid trucks manufactured will feature ultracapacitors.
• Lithium-ion batteries will be the overwhelming choice for energy storage systems in Class 6-8 hybrid trucks.
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14. Industry Structure and OE Market Supply Chain: Interesting New
Market Dynamics Underlining Need for Synergetic Relationships
Consumers: Fleets and Owner Operators
Truckmakers Aftermarket
OEM Vertical
System Integrators Integration
Module Suppliers Captive
Tier 0.5 Supplier
Tier 1 System Suppliers
Tier 2
Software Suppliers Component Suppliers
Truck Manufacturers
Module Suppliers/System Integrators
Component
Suppliers
Energy Storage System Suppliers
(Batteries, Ultracapacitors, Hydraulic Accumulators-Reservoirs)
Electric Rotating Machines
(Traction Motors, Hydraulic Pump Motors)
Power and Control Electronics
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15. Pricing Analysis:
Diminishing Upfront Cost Barriers for Potential Adopters
14000
• Steady price declines in the battery, hydraulics,
12000
ultracapacitors, control electronics, electric and
hydraulic pump-motors. 10000
P rice ($)
• Price growth expected in the power electronics systems 8000
market. 6000
• OEMs interested in gaining greater control of the power 4000
electronics market.
2000
• Overall price decline will be prodded by economies of
scale 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
• Increasing market competition and competition from
global suppliers will expedite price declines in the Batteries Ultracapacitors Hydraulic
medium-long term.
4500 3500
4000 3000
Price Growth Opportunity
3500 2500
Price ($ )
Price ($)
3000 2000
2500 1500
2000 1000
1500 500
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Electric Traction Motors Hydraulic Pump Motors Control Electronics Power Electronics
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16. Total Class 6-8 Truck Hybrid Powertrain Systems Market -
Technology Roadmaps (North America), 2005-2015
Fuel-Cell
Alternative Fuel Engines- Biodiesel/CNG/LNG
Peripheral Diesel Engines Smaller HP Diesel Engines
Powertrain Integrated Starter Alternators Integrated Starter Alternator Damper
Technologies
Automatic Transmissions CVT/IVT
Automated Transmissions Advanced Automated Power Splitting Transmissions
Variable Geometry Turbochargers
Chassis Regenerative Braking System Advanced Regen Braking System with Complimenting Axle and Air Disc Brake
Technologies
Hybrid Powertrain Efficiency Enhancement Embedded Software
Power and Advanced Hierarchical Control Structure
Control Insulated-gate Bi-polar Transistor Advanced IGBTs for High Voltage Power Management
Electronics
Advanced Permanent Magnet Motors/Generators
DC/AC Motor Generators Advanced AC Motor/Generator
Rotating Bent Axis Pumps
Machines
Axial Piston Pumps-Open Config Axial Piston Pump-Closed Config.
Ultracapacitors Asymmetric Ultracapacitors
Carbon Ultracapacitors Ceramic Ultracapacitors
Energy
Storage Hydraulic Accumulator/ Reservoir Light Weight, High Power & Energy Density Accumulator/ Reservoir
Systems Li-ion Batteries Li-ion Batteries with Advanced Thermal Management
NiMH Batteries
Plug-in
Hybrid Type Micro Hybrid
Full Hybrids
Mild Hybrid
Hybrid Series/ Parallel Hybrid
Configuration
Series Hybrid
Parallel Hybrid
2005 2010 2015
Source: Frost & Sullivan
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17. Key Market and Technology Trends and Resulting Competitive
Factors for System Suppliers
Key Competitive Factors
• Continuing diesel price • Increasing Levels of
volatility and growing fleet • Consumers “Waiting Incentivization (Govt. , • Efficiency
interest stoking market and Watching” truckmakers, insurance,
financial community)
• Upfront and
• Sub-optimal battery Lifecycle Cost
• Upfront and lifecycle • Favorable regulatory
manufacturing environment
footprint (battery replacement) cost • Quality and
barriers remain
Reliability
• More market pull than • Driver and technician
truckmaker push shortage Robustness
•
and Attractive Form
Factor
• Class 8 line-haul market: • Warranty cost implications
forcing truckmakers • Seamless
holy grail Interfacing with the
towards imposing stringent
requirements on Tier 1 Truck makers
• Power electronics market suppliers, inflating cost Hybrid Platform
benefiting from rising
system voltage • Safety Value
• Scalable and
• Power and Flexible Supply
• Need for technology Energy Density
Chain
standardization and industry
cooperation
•Proximity with
• 2012-2015: Industry on • Least pressure on existing energy Truck makers,
Fast Track and distribution infrastructure Large Fleets, and
favoring hybrids Policy Makers
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18. Electric Commercial Vehicle Market: Friend or Foe??
Best Fit for Electric Commercial Vehicles: Depot-based urban delivery fleets cover
known routes (typically under 100 miles) and they return to base every night where
they can be recharged
Load
GCW / GVW 1* Capacity Pure Electric
(ton) (ton) Typical Application Attractiveness
Without
3.5 1.5 Urban distribution Government
funds EV do
7.5 4 Urban distribution not have a
future, as
12 7.2 Urban distribution initial cost is
very high
18 11 Inter Urban distribution
26 17 Long distance
40 25 Long distance
Total of 18,929 units sold in 2016
from 1,982 units in 2010 at CAGR
of 38%
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19. CALSTART Member Benefits
Frost & Sullivan study entitled:
North American Class 6-8 Truck Hybrid Powertrain Systems Market
is available to CALSTART members at a discounted price.
This study offers in-depth research, analysis, and forecasts of the North American
market for Class 6-8 hybrid trucks, energy storage systems, power and control
electronics, and electric and hydraulic rotating machines.
For enquiries, please contact:
Melanie Savage
Member Services Manager
CALSTART
msavage@calstart.org
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20. Contact Details
Sandeep Kar
Sandeep Kar
Global Program Manager,
Global Program Manager,
Commercial Vehicles Research
Commercial Vehicles Research
Direct: 416.490.7796
Direct: 416.490.7796
Fax: 416.490.1533
Fax: 416.490.1533
Email: sandeep.kar@frost.com
Email: sandeep.kar@frost.com
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