Tod Hynes is President and Founder of XL Hybrids, the leader in fleet electrification solutions for commercial and municipal fleets. Hynes was director of alternative energy at Citizens Energy and started the company’s wind development businesses. A graduate of Massachusetts Institute of Technology, he co-founded the MIT Clean Energy Prize and teaches a graduate course called Energy Ventures at the university.
Electric vehicle technology has been around for over 100 years, but it wasn’t until the introduction of the Prius that an xEV (hybrid, plug-in hybrid, or electric vehicle) was able to break through with significant sales. Toyota has sold over 6 million hybrids worldwide, yet xEVs still only account for ~3% of vehicles sold in the US, and that needle hasn’t moved in 10 years. That’s right, over the last decade we’ve seen the number of consumer xEV options increase from about 5 to 70+ different makes and models, yet the uptake has stayed at ~3% of new vehicles sold.
There’s one major reason xEVs have remained a niche market â€“ cost. Because xEVs cost more than conventional vehicles, it’s difficult to achieve a good financial return on the up front premium. The genius behind the Prius is that there isn’t a non-hybrid version, so buyers don’t know what the premium is (based on other Toyota hybrids it’s ~$4,000) and they don’t realize it will take ~10 years of savings to pay it back for the average consumer. In this case, consumers are willing to pay for a green vehicle that gets a high MPG. The genius behind Tesla is that people are willing to pay a lot of money for nice cars that can go 0 to 60 mph in three seconds. These leaders are pushing the industry forward and are investing billions to get truly mainstream solutions to market, but the world still waits, and lower oil prices make the challenge even more difficult.
We took a vastly different at XL Hybrids. We started by finding those customers who use a lot of fuel per vehicle and could save the most fuel and money with electric drive technology. This quickly drove us towards customers with large, low-MPG vehicles that drive a lot of non-highway miles â€“ primarily commercial fleets. So we focused on their needs and developed a low cost and easy to implement hybrid solution that can rapidly scale within a fleet and make financial sense with batter prices where they are today. As battery prices come down, we can also add plug-in options and further electrify their fleets and further reduce their fuel consumption. It’s a highly scalable approach that doesn’t require billions of dollars to implement.
XL Hybrids makes a low-cost electric powertrain that is paired with advanced software and cloud-based analytics. Our wireless link and cloud-based analytics system can provide an electrification guide to large fleets so they can see where they will get good returns on their investments in xEVs and track real world performance. This system also enables best-in-class vehicle uptime, which is critical for fleet operations. Vehicle downtime is an ROI killer and has been a challenge for many new fleet vehicle technologies.
Our electric powertrain is added to new and existing vehicles, turning them into hybrids in less than a day, and reducing fuel use by ~20% on urban drive cycles. The electric motor acts like a generator during braking events and captures energy that is normally wasted as heat in the brakes. That energy is stored in the battery pack and used to provide additional torque during acceleration to reduce the load on the engine. This is called regenerative braking, and XL Hybrids™ system can easily add this capability to a range of commercial vehicles regardless of the fuel source. That helps fleets meet sustainability goals.
Many of our fleet customers use ~3,000 gallons of fuel per year, so a 20% reduction in fuel use translates to 600 gallons of fuel saved. That’s equivalent to taking an average consumer vehicle off of the road. Even with gasoline at $2.00 per gallon, our customers can save $1,200 per year and $12,000+ over the life of the vehicle. Our hybrid electric powertrain adds a significant amount of additional torque (up to 80% more), so customers purchasing new vehicles can down size their engine and save $800-$2,500 in the upfront cost of the vehicle. The regenerative brakes can also reduce brake wear and maintenance costs by 50%, which can translate to another $3,000 in savings over the life of the vehicle. Finally, drivers do not have to refuel as often, which can save more than a man-week and ~$2,000 over the life of the vehicle.
So even with low oil and fuel prices, XL Hybrids can provide a system that costs less than $10,000 yet creates more than $20,000 in value and provide a solid return on investment. With many customers saving money because of lower fuel prices, now is the time to invest in cost effective ways to reduce fuel use to keep the fuel bill low even when fuel prices go up.
In order to reach the 97% of the market not currently buying a xEVs, the solutions need to be better and lower cost. Increased efficiency standards can significantly increase efficiency without relying on xEV technology and oil prices will probably stay below $70 per barrel for a long time, so the challenge of vehicle electrification remains high. That said, the long term trends are clearly in favor of electrification, as electric motors are more efficient, can last longer, and require less maintenance than internal combustion engines.
It is lower battery prices that will fully unleash the potential of electric drive technology, and the time is now. There are plenty of opportunities to scale even with battery prices where they are today. You just have to look in the right places.