By Janice Sutton
Q: You spoke at AFLA’s 2015 Mid-Year Forum on alternative fuels and fuel technologies. What was the thrust of your presentation?
A. I focused on three things. First, why aren’t more fleets choosing to implement alternative fuels? Second, what is the impact of the recent low fuel prices? It has made things a little challenging for the industry. And then, third, we looked at some recent advances in alt fuel technologies.
Q. So, in the wake of relatively low fuel prices, what advice would you give fleets who are interested in moving ahead and implementing alt fuels?
A. Fuel is a large part of the fleet budget, so many fleet managers are happy about low fuel prices. Everybody is always trying to reduce their fleet costs. It does make things really challenging for those fleets that are trying to implement alternative fuels, though. Even though there are a lot of reasons why fleets are implementing alt fuels, everybody wants to see that positive ROI. With the current low fuel prices, it makes it a lot tougher to get a good ROI on implementing alt fuel vehicles.
But even though fuel prices are relatively low today, I still recommend fleets continue on their path. If they were previously considering implementing alt fuels, it’s still a good time. Many vendors in the alternative fuels market have historically been motivated to work with their customers in order to put a deal together. They are even more motivated now. If you are able to get good discounts now, it puts you in a good position when fuel prices ultimately do rise.
Q. Are you seeing fleets having success in implementing alternate fuels?
A. While there are some fleets that are choosing to sit on the sidelines, we are still seeing many fleets that are choosing to go forward with implementing alt fuel vehicles. We see a lot of government and municipality fleets moving forward. There are regulations requiring them to use a certain percentage of alternative fuel vehicles in their fleet, so they are still continuing their plans.
There are also fleets that are in industries where, for a variety of reasons, they are choosing to move forward. For example, fleets that are in either the environmental industry or in the fuel business. It still makes sense for them as well. And then, lastly, fleets that are taking a really long term perspective and saying: I know that fuel prices are going to rise, I really want to be ready, and I want to test my vehicles. Now is a good time to negotiate and to get a pilot together and be ready when fuel prices do rise.
Q. What are some of the new technologies on the horizon that look promising?
A. Today we are finally seeing battery technology look much more promising than it has in the past. The Tesla Model S gets a range of about 250-300 miles per charge now, which is certainly reducing range anxiety issues for their customers. We think that battery technology is going to make it down to the masses as well, so we believe GM and Ford are going to be able to see that range in their vehicles soon.
We are also seeing some hydrogen fuel cell vehicles hit the road. Both Hyundai and Honda have some vehicles on the road today in California. Of course infrastructure is always a challenge, but there are test vehicles on the road today using hydrogen fuel cell technology.
And then, lastly, we are seeing a lot of opportunities for medium and heavy duty trucks. Today they are already implementing CNG, propane, LNG, and hybrid electric, and there even are some pilots out there of Class 8 all-electric trucks on the market. So there are a lot of good things coming up in the near term future for trucks as well.
My advice for fleets that are considering alternative fuels is that it still makes a lot of sense to continue your pilots, to continue your long term planning and put yourself in a good position for when fuel prices ultimately rise. You will be ahead of your competition and ready for the future.
Amy Blaine, Vice President of Strategic Consulting, Analytics and Sustainability at Donlen, brings over 20 years of consulting experience helping companies make data driven decisions and balancing multiple goals such as profit and sustainability.
