Even through the COVID-19 pandemic, the growth of clean technology and fuel adoption among commercial vehicle fleet users has continued. This past year saw growth in orders and deliveries for natural gas, battery-electric, and hydrogen fuel cell electric vehicles, according to the second State of Sustainable Fleets report.
Clean technology consulting firm Gladstein, Neandross & Associates recently updated its annual State of Sustainable Fleets report. It analyzed hundreds of survey results from medium- and heavy-duty fleet operators across the U.S. as well as industry data and the authors’ independent technical analysis.
It found that in both 2019 and 2020, the percentage of clean-vehicle early adopters who said they plan to increase their use of natural gas, propane, battery-electric, and hydrogen fuel cell electric vehicles in the next five years stayed steady at 83%. Drop-in biofuels also gained traction during the past year, with renewable diesel seeing increased production, as well as an expansion of renewable diesel production sites in the U.S.
Notably, every long-haul, delivery, and large-scale fleet (defined as fleets operating more than 100,000 vehicles) surveyed report that they plan to increase their use of clean vehicle technologies. Additionally, more than 91% of private for-hire fleets, which made up many of the largest fleets surveyed, expect their use of clean technologies to increase in the next five years.
This year, unlike the initial report in 2020, the report also included insights from non-adopter fleets — those that have never used one of the four clean vehicle drivetrains included in the assessment.
These non-adopter fleets are willing to use clean vehicles, with the greatest enthusiasm for battery-electric vehicles, according to the report. Nearly three-quarters (71%) say they would be willing to pilot or purchase BEVs, followed by CNG (32%) and propane (17%). These figures almost directly reflect the actual rates of clean vehicle early adopters who reported they have piloted or purchased BEVs (70%), CNG (30%), and propane (13%).
When it comes to adopting clean vehicles, non-adopter fleets reported three main barriers: insufficient infrastructure (64%); vehicle cost (63%); and infrastructure costs (53%).
Cleaner Internal Combustion Engines
Diesel and gasoline drivetrains face increasingly stringent regulatory initiatives, including sales bans, and growing emission reduction expectations from sustainability-oriented customers and the public.
However, these technologies are rising to the challenge, with engine efficiency improving annually for some vehicle types.
The Environmental Protection Agency’s Phase 2 Greenhouse Gas Standards for Medium and Heavy-Duty Engines and Vehicles went into effect with model year 2021 vehicles. When fully phased in by 2027, these standards will require GHG reductions of up to 25% from MD HD vehicles and 4-5% from MD and HD engines. Manufacturers are already on their way to meeting these targets, and these internal combustion engines are expected to continue to compete and offer benefits to fleets for at least the next decade.
At the same time, more sustainable options such as renewable diesel and biodiesel blends are growing in availability and cost-effectiveness.
“Our experience with renewable diesel has been very positive,” said Kevin Myose, fleet manager for San Joaquin County, California, which adopted the fuel in 2015. “The price is less than fossil diesel, along with reduced emissions and odor. Our maintenance interval has increased three-fold.”
However, the report contends, “to maintain dominance beyond that timeframe, the diesel and gasoline engines and fuels of today will have to radically transform to deliver the steep emissions reductions required by regulators and a growing number of customers.”
The report noted that for-hire fleets show a much higher adoption of efficiency technologies and biodiesel blends than public sector fleets. Efficiency technology adoption is at 38% on average among survey respondents but as high as 89% among private-sector for-hire fleets — more than three times the rate that government fleets report using efficiency technology and practices.
Propane is most likely to be used in medium-duty operations, such as utility trucks, municipal vehicles, delivery trucks, and school buses. But because two of those segments were highly impacted by the COVID-19 pandemic, propane vehicle orders were down in 23% in 2020. Last year also saw the retirement of numerous vehicle offerings by OEMs, according to the report, although the upfitter market remains a viable option.
At the same time, according to the report, we may see propane offered in heavier-duty vehicles. Cummins began demonstrating a propane direct-injection engine based on its B6.7 diesel engine, and AmeriGas has tested the engine in a Peterbilt 337. It could come to market as a Class 7 vehicle as early as 2024.
Propane offers a significant reduction in NOx emissions compared to gasoline and diesel, and an 18% reduction in GHG emissions. Renewable propane can offer up to 70% GHG reduction compared to gasoline, but fleets do not yet have widespread access to this fuel type.
Compressed natural gas is a straight-forward, cost-effective solution for many heavy-duty fleets, with transit, refuse, and fixed-route dedicated fleets leading vehicle delivery growth in 2020. Transit, straight truck, and tractor vehicle deliveries accounted for 87% of all new natural-gas vehicle registrations last year. CNG tractors saw a 168% increase over 2019 deliveries to a seven-year high of 1,550.
UPS reports that it runs 8 million miles a week with its heavy-duty CNG truck fleet throughout the U.S., a significant portion of which is fueled by renewable natural gas. Waste Management has deployed approximately 9,000 CNG trucks and nearly 150 CNG fueling stations throughout the U.S., representing 60% of its national waste collection fleet. The company added another 1,460 CNG vehicles last year.
Renewable natural gas is making this a more appealing option for sustainability efforts. Nearly 90% of surveyed fleets who have CNG vehicles intend to use RNG in the next year, the highest rate of any renewable fuel or energy source across all drivetrains, and an indicator that fuelers are expanding supplies outside of California, according to the report.
The variety of heavy-duty CNG models continues to grow, with OEMs adding eight new HD models to their lineups during the past year. Offerings for the transit and refuse CNG market remained steady in 2020, with no new models added. However, medium-duty fleets have seen a 40% decline in available CNG models, with OEMs cutting 20 models from their lineups over the same period.
In many ways, notes the study, “2020 was transformative for battery-electric vehicles,” due to the number and breadth of announcements by global OEMs targeting commercialization of BEVs. Fleets are now deploying several hundred medium- and heavy-duty battery-electric vehicles per year, according to the report.
Since 2019, almost all major OEMs in the medium- and heavy-duty markets have announced plans to commercialize at least one BEV. In total, OEMs offer and/or have announced plans for more than 119 BEV models, an increase of 24% since last year.
Despite its early stage of commercial development, satisfaction from early users is high. Large fleets, both private and for-hire, made bold sustainability announcements throughout this past year, with many setting aggressive zero-emission deadlines. Retail giant Walmart, for instance, is “electrifying and zeroing-out emissions from all its vehicles, including long-haul trucks” by 2040. Knight-Swift plans to cut GHG emissions in half by 2035, and FedEx announced a goal to achieve global carbon-neutral operations by 2040.
Transit agencies and school districts continued their early lead in the adoption of BEVs, with 351 units deployed in 2020 — 181 electric transit buses and 170 electric school buses.
However, production capacity is still building even while OEMs may accept orders today for products that cannot be delivered for a year or more.
“If current order growth continues rising steeply and production capacity expands, BEVs are on track to become a leading clean fleet technology,” noted the report’s authors.
In addition, widespread charging infrastructure is critical to support and increase BEV adoption, and utilities nationwide are increasingly investing in fleet-focused programs. For instance, six of the country’s largest utilities, including Duke Energy and Southern Company, have formed the Electric Highway Coalition, which will enable travel across most of the Southeast via a network of DC fast chargers. At the same time, OEMs are beginning to offer their own charging solutions.
Of the fleets surveyed that are piloting and purchasing BEVs, 96% are installing their own private charging. One-third of respondents piloting or purchasing BEVs plan to install some form of onsite renewable electricity production, typically a small rooftop solar project.
There are questions about whether the number of chargers available, and the electric grid itself, can keep up with the demand.
Fuel-cell electric vehicles continued to make headlines in 2020. While the technology remains expensive and available in only very limited production, the number of models announced for transit and over-the-road markets has doubled in the past year. New investment commitments and partnerships by OEMs, fuel suppliers, component manufacturers, and infrastructure developers continue to build the foundation for FCEVs.
However, it’s still early days for FCEVs, even more so than BEVs. The total sample size in the survey was the smallest of all clean vehicle users at 19 fleets. The transit sector is leading the way in adopting FCEVs.
In terms of hydrogen infrastructure, surveyed fleets are not waiting for public fueling stations. More than half of FCEV users surveyed (58%) have already piloted or purchased their own hydrogen fueling infrastructure.
“As we move toward battery-electric vehicles as a zero-emissions solution, we are also operating a fuel-cell electric vehicle in our fleet to see if we can draw comparisons on performance, reliability, and cost,” said Michael McDonald, senior director of sustainability and government affairs for UPS. “It is too early to tell.”
About the Report
Produced with support from the report's title sponsors Daimler Trucks North America, Penske Transportation Solutions, and Shell Oil Company, and supporting sponsors Cummins, DTE Energy, and Geotab, the report offers additional insights into the key trends shaping the clean vehicle market. A news release outlined five key findings:
- Fleets report superior total cost of ownership and fuel costs savings when operating on the mature technologies of compressed natural gas in the refuse, transit, and dedicated heavy-duty sectors and on propane in the school, paratransit, and urban delivery sectors.
- Battery-electric vehicles are poised to become a leading clean fleet technology in three to five years. Commitments by several large fleets will require vehicle deployments in the tens of thousands per year. While vehicle costs remain high for this developing technology, and OEMs are just beginning to enter serial production, investment to build this market is already enormous and growing.
- Fuel producers and vehicle makers continued investing hundreds of millions globally, adding to the billions of dollars already committed to build a foundation for fuel cells, doubling the number of models coming to market, mostly for transit and Class 8 tractors.
- Two powerful drivers—policy mandates and ambitious sustainability goals—are creating demand for all clean technologies and will continue to drive growth.
- Sustainability benefits, including the emissions reduction potential of vehicles and fuel, are improving for nearly all existing clean vehicle technologies, including efficiency, renewable fuels, and cleaner vehicles. Sustainability benefits remain a top motivator for fleets.
"This year's analysis and extensive fleet survey reinforces what we have been witnessing across the industry," said Erik Neandross, CEO of GNA, the firm authoring the report. "With the total cost of ownership increasingly being confirmed across multiple clean fuel and technology options, fleets continue to expand their commitment to and investment in these sustainable vehicle options, a trend we fully expect to continue to accelerate in the coming few years."
GNA also puts on the upcoming Advanced Clean Transportation (ACT) Expo, which will take place at the Long Beach Convention Center in Southern California Aug. 30-Sept. 2.