Automotive Fleet

NOV 2013

Magazine for the car and truck fleet and leasing industry

Issue link:

Contents of this Issue


Page 42 of 65

TABLE 1: REDUCTION IN ANNUAL FUEL COSTS AS A FUNCTION IN REDUCTION IN VEHICLE AGE Reduction in Average Vehicle Age (Years) 0 0.5 1 1.5 2 Annual Savings $0 $57,444 Reduction in Metric Tons of GHG 0.5 1 191 377 City Hwy. 2000 14 19 2014 18 25 22.2% 24% Percent MPG Improvement 1.5 2 2.5 3 16,413 32,354 47,837 62,875 77,482 91,669 TABLE 3: FUEL ECONOMY CHANGE FOR SIX-CYLINDER 2014 PICKUP TRUCK Model-Year 3.5 4 $113,238 $167,429 $220,064 $271,187 $320,842 $369,071 $415,914 TABLE 2: REDUCTION IN ANNUAL GREENHOUSE GAS (GHG) EMISSIONS AS A FUNCTION IN REDUCTION IN VEHICLE AGE Reduction in Gallons of Fuel Consumed 3 $2,000,000 $1,942,556 $1,886,762 $1,832,571 $1,779,936 $1,728,813 $1,679,158 $1,630,929 $1,584,086 Annual Fuel Expenditure Reduction in Average Vehicle Age (years) 2.5 Purchasing newer models, such as a sixcylinder 2014 truck, can increase mpg ratings by more than 20 percent. Renewing the Fleet Te age of a feet is one of the most significant factors in fuel-related costs. An older feet is not only more costly to maintain and requires more care, but is also less fuel efcient and produces more greenhouse gas (GHG) emissions. Changes in the federal Corporate Average Fuel Economy (CAFE) regulations, which require equipment manufacturers to comply with fuel economy standards set by the U.S. Department of Transportation (DOT), have established aggressive annual increases in fuel efciency for vehicles and equipment. Current CAFE standards state that 2011-2025 sedans and light-duty vehicles must achieve an annual increase of 6 percent fuel efciency per model year; 20142018 heavy-duty trucks must achieve an annual increase in fuel efciency of 2.4 percent for vocational trucks and 5.3 percent for semi tractors per model year. For example, a feet of 1,000 light-duty vehicles with an average usage of 8,000 558 734 904 1,069 3.5 For example, with a feet of 1,000 vehicles, replacing older models can add up to fuel savings of more than $400,000. 4 105,449 118,833 1,230 1,386 Reducing greenhouse gas emissions not only cuts costs for feet managers, it also benefts the local air quality. miles, an average fuel efciency of 14 mpg, consumes fuel at an average cost of $3.50 per gallon, will spend $2 million annually on fuel. By replacing older equipment and reducing the average age of the feet, an organization can achieve real savings as illustrated in Table 1. In addition to achieving better fuel economy, newer vehicles produce fewer GHG emissions. Table 2 illustrates how reducing the age of the example feet also reduces the amount of GHG produced. Replacing older vehicles and equipment will not only produce long-term fuel savings as illustrated in the example above, but will also produce immediate savings. Over the past decade, several popular feet vehicles in the industry have improved fuel effciency by more than 20 percent utilizing conventional fuels and motors. Table 3 illustrates how fuel economy has increased substantially with newer model vehicles and equipment. Finding Alternative-Fuel and Hybrid Solutions Alternative-fuel vehicles (AFVs) and hybrids are promising solutions for achieving better fuel economy within a feet, but the acquisition cost of these vehicles versus their conventional fueled counterparts are signifcantly more expensive as illustrated in Table 4 (page 40). Although the increased fuel economy of hybrid solutions can produce savings, it can take thousands of miles to realize enough savings to ofset the additional cost of the hybrid model. Additionally, if we consider the average number of miles traveled by a vehicle in a year, how many years would it take to realize enough savings through fuel economy to ofset the additional cost of the hybrid model over the conventional model? According to data analysts at Vincentric, the initial cost diference between hybrids and conventionally fueled vehicles is on average approximately $5,285. Te average fve-year fuel savings for hybrids of $4,597 does not compensate for the initial investment made by feet managers, as illustrated in Table 5 (page 40). When we consider that the optimal replacement cycle for a sedan is typically between seven to nine years and many feet assets do not achieve annual utilization levels over 12,000 miles, the hybrid solution may not produce enough fuel economy to justify the additional expense. Achieving sustainability in a feet through alternative fuels and hybrids is fne, but don't count on them producing cost savings through better fuel economy. Your limited feet replacement dollars will go further by replacing older feet assets with fuel efcient, conventionally fueled vehicles available today. Reviewing Fleet Size and Composition Te size and composition of a feet have a direct impact on the amount of fuel that is consumed. Progressive organizations are beginning to focus on the business need justifcation for the allocation of vehicles and equipment across user groups. Trough quantitative data analysis in combination NOVEMBER 2013 I AUTOMOTIVE FLEET 39

Articles in this issue

Archives of this issue

view archives of Automotive Fleet - NOV 2013