Fleets Can Improve Fuel Economy 5-40% by Making Switch to Hybrid Vehicles

Fleet operators are finding that hybrid electric vehicles (HEVs) can help them cut fuel costs and meet emissions-reduction targets, according to a new report from Pike Research.

A key finding shows that commercial and government fleet managers can improve fuel economy between five percent and 40 percent and lower emissions 10 percent to 50 percent below comparable vehicles with internal combustion engines (ICEs).

Pike’s researchers forecast that the global market for HEV light-duty (LD) vehicles in the fleet sector will increase at a compound annual growth rate (CAGR) of 17.5 percent from 2010 to 2015, with vehicle sales surpassing 740,000 per year by the end of that period.

The U.S. is expected to be the largest fleet market for LD HEVs through 2015, with vehicle sales of 233,454 vehicles, an 8.1 percent CAGR from 2010. Global HEV fleet sales will reach 740,704 vehicles in 2015, representing nearly 4 percent of global LD vehicle sales.

However, there are still some economic challenges associated with hybrid vehicles, says Pike’s senior analyst Dave Hurst. “Lifetime costs for HEVs, including the cost of the vehicle plus fuel, can often be higher than ICE vehicles. However, a number of government incentives are helping to close the gap for fleet operators. In addition, many fleet managers are electing to purchase HEVs as a means of complying with requirements to reduce fleet emissions, as well as to hedge against higher fuel costs in the future.”

Hurst says that passenger cars will be the largest segment for HEVs in fleet markets, but some of the highest growth rates over the next five years will be in the SUV and pickup truck segments, particularly in the United States.

The study, “Hybrid Electric Vehicles for Fleet Markets”, also finds that for plug-in hybrid electric vehicles (PHEVs) passenger cars will represent 80 percent of the fleet market in 2015, primarily driven by the automakers’ focus on consumer markets for PHEV launches.

Corporate fleets already making the switch include Verizon, UPS, FedEx and Coke.