by Dave Hurst

Last week, President Obama announced the official fuel economy and emissions rules for medium and heavy duty trucks. The Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) had proposed the rules last fall, and the new 1,000 page set of rules were announced after a period of gathering feedback and analysis.

The rules are voluntary from 2013 through 2015, but then become mandatory for model year 2016. During the 2013-2015 period, manufacturers who declare that they intend to comply with the rules will earn credits for the mandatory model years.

For the most part, the rules were relaxed for the heavier duty truck classes from the proposed rules. While it is disappointing for many to see these relaxed, it is not surprising since this would have the most significant cost associated with the rules. However, hybrids now have a defined path to getting credits similar to how hybrids get credits in light duty car and truck Corporate Average Fuel Economy (CAFE) rules.

Hybrid manufacturers are in general encouraged by the rules. I spoke with Azure Dynamics and Odyne shortly after the rules were announced and both said that while they were continuing to study what the rules meant for them, they were optimistic about them for their hybrid business. Matt Jarmuz, Director of Sales for Odyne, mentioned that while he anticipated that these rules would likely be met through aerodynamics improvements and engine improvements, the rules would help hybrid truck companies like his because they will be able to sell credits earned for the higher fuel economy back to original equipment manufacturers. If the market for these credits follows the pattern of light duty vehicles, we should see some robust trade between companies like Odyne, Azure Dynamics, and others. In fact, it’s possible that these credits could become a significant source of funding for smaller electric truck manufacturers, such as Zero Truck, Balqon, and Electric Vehicles International, who have the ability to sell credits to other traditional OEMs.

Of course, the flip side to these requirements is what they mean to fleets. The studies are just starting to come out announcing the savings that will be realized by meeting these fuel economy rules. These savings will be key according to the fleets I have spoken with. They point out that fuel costs are often their biggest expense, so anything reducing fuel costs will help. However, the added cost to the trucks (up to $6,000 for Class 8 tractors) is a concern for both small fleets and very large fleets who purchase multiple trucks at a time. Interestingly, one of the fuel managers I spoke with at a logistics company pointed out that the best way to instantly reduce fuel consumption would be to simply reduce the speed limit, though in the same breath he acknowledged how politically unlikely this is.

For a first time set of rules, these are a significant step in the right direction for the industry, particularly for encouraging growth in the electric truck market. However, the relaxed heavier truck (Class 7 and 8 ) requirements are definitely more evolutionary rather than revolutionary for manufacturers. Thanks in part to these rules, in an upcoming report on hybrid electric trucks, Pike Research is forecasting that hybrid electric and plug-in trucks will see 40 percent growth between 2011 and 2017, resulting in over 75,000 truck sales during that period. This growth rate would not likely be as strong without these rules.

Photo by IanPhilipMiller/flickr/Creative Commons