By Tim Esterdahl
While Ford should be applauded for offering the small and, presumably, fuel-efficient 2.7-liter EcoBoost engine in its upcoming 2015 F-150, more can be done. The use of new metals and fuel-saving technologies are changing the business case for hybrid pickup trucks, making them more viable. Here's why.
Early General Motors hybrid half-ton pickups failed, perhaps because they didn't have the technology offerings, better payback calculations, or weight savings available today. Increasingly, truckmakers are using aluminum (a recent report says 80 percent of trucks will use it by 2025), stop-start technology, cylinder deactivation and high-strength steel to build trucks that weigh substantially less and provide better fuel economy. This could lead to an entirely new truck or, at the very least, a hybrid-powered truck that's attractive to consumers.
The Business Case for a Hybrid Truck
Full-size trucks today are overbuilt and rarely used to their full capacity. This is especially true when you consider how much more powerful half-ton trucks are than they were just 10 or 20 years ago.
In 2004 many pickups could tow upward of 8,000 pounds while getting a respectable, for the time, 16 to 18 mpg highway (EPA estimates for two-wheel-drive V-8s). Now several trucks tow upward of 11,000 pounds while achieving better fuel economy. Even under load, fuel economy isn't likely to drop as much as older models did.
Yet these more powerful trucks aren't used to full capacity. Mike Cairns, Ram's vehicle line executive, recently said in a Google Chat that the majority of half-ton truck owners tow around 6,000-7,000 pounds and only 200-300 pounds of payload (typically when hauling dirt or other landscaping materials). For reference, these are the type of loads midsize truck can handle.
With this information, market trends and the growing push for better fuel economy, the ideal truck would have the capacity of a midsize truck, the cargo room of a full-size pickup and the fuel economy of a hybrid car (similar to a Honda Ridgeline).
While building a hybrid midsize-spec full-size truck makes sense on paper, truckmakers haven't gone this route. They still rely on buzzwords like "capable, work, maximum towing, reliable and dependable" to sell their trucks. A capable work truck with a maximum towing package doesn't really scream hybrid midsize.
Also, price is a big concern. As much as truck fans hate to think of their preferred manufacturer as a "business," truckmakers are building products. Building a hybrid that retails for considerably more than a competitor is just bad business.
Hybrid Full-Size Truck
Where does a hybrid powertrain work? From a business-case point of view, putting a hybrid powertrain in a full-size truck makes more sense. With the average price of a full-size truck at $39,915 and climbing, consumers may be willing to fork out the money for a hybrid in exchange for better fuel economy.
The rebirth of diesel engines in the half-ton market may be pushing us toward this future. Ram says its new EcoDiesel 1500 is selling quite well, with the average time on a dealership lot at nine days (at least that's what it was in the first few months). That's well below the industry average of around 68 days.
Also, it seems truck buyers are willing to pay a little extra money for this advanced technology so it's possible to imagine that manufacturers could develop a fuel-efficient full-size truck and price it higher to take some financial risk out of the project. If a hybrid pickup truck doesn't sell as fast as they would hope, they could possibly drop the price a bit without sacrificing profits too much. This typically isn't possible in other automotive segments.
Lastly, if aluminum catches on and is used throughout the full-size segment, going hybrid makes even more sense. One of the big challenges with hybrid is powering heavier vehicles. Once you make them lighter, it makes it much easier to realize better fuel economy with such an engine.
Who Builds It
Offering a niche product takes a lot of resources and makes sense for only a couple of automakers. These automakers have to be willing to take the plunge, have the technology on hand and have the production capacity. This narrows it down to Honda and Nissan.
For both Honda and Nissan, the business case seems pretty strong. They each have access to a hybrid powertrain offering, have the production capacity to build a small initial offering and have additional vehicles in their lineup to offset initial low sales volumes.
Also, they both could use a boost to their truck offerings. Honda and Nissan are solidly at the bottom of full-size truck market share. Offering a unique product could help them boost sales and gain customers at competitors' expense.
Honda's Ridgeline is already set up for hybrid adaptation. Consumers know the Ridgeline isn't the typical work truck, and Honda could easily market the new Ridgeline as a "weekend" landscaper's vehicle.
For Nissan, the plan to bring the large Cummins diesel to the market means it doesn't currently have any high-fuel-efficiency models to offer to fleet or gas-conscious customers. Offering a full range of products is important to every company, and Nissan could benefit from offering something in that segment.
Who Doesn't Build It
Toyota may have come to mind when thinking about hybrid powertrains, but it simply doesn't have the capacity to build any more trucks. The San Antonio plant is at full capacity building the Tundra and Tacoma. Without a significant investment in capacity there, Toyota is limited. Toyota executives have been reluctant to pull the trigger because the economic collapse hit the company hard and plant building costs went well over budget.
What about Ford and Ram? Ford has been slowly gaining success with its hybrid offerings, but it's promoting the EcoBoost engine for improved fuel economy in the pickup segment. It is hard to see Ford offering a different powertrain since it would be akin to admitting the EcoBoost isn't the answer.
Although Ram experimented with hybrid powertrains several years ago, Ram doesn't have access to a hybrid powertrain like the other truckmakers. Fiat does not have anything strong enough, and purchasing a high-tech drivetrain is too expensive.
What about Via Motors?
If you are an astute follower of pickup truck news, you may be wondering how Via (pronounced VeeYaa) Motors fits into this discussion. Via has pioneered a viable electric hybrid powertrain for GM trucks, SUVs and vans; it purchases GM vehicles, installs extended-range plug-in electric powertrains and then sells the trucks under its own brand name. Its electric powertrain offers fleet customers a unique product.
"An owner normally spends $400 on a truck payment and then another $400 on fuel and maintenance, said David West, Via Motors spokesperson. "All we have done is taken away that second $400 a month and put it into the payment. The economics are great, but it is just a bit hard to swallow. It seems hard since you are putting that extra $400 a month into your truck payment and electric bill."
How much electricity do you need? West says Via bases its numbers on one charge a night and it works out to $2 a day to drive the truck. How is that possible? This is due to driving on electricity only most of the time. He said last year he drove his truck 50,000 miles on 28 gallons of gasoline. This sure makes electric seem like the way to go.
"The truck is the perfect place to start with electrification in the workforce," West said. "The truck is a vehicle you can't do without. You can't downsize it. You have to change fuels. Once you get to electric or a hybrid backup, even though the initial cost is higher, you save a ton of money over gas engines long term."
While Via Motors has a good business case with total cost of ownership and driving costs, it relies on original-equipment truckmakers for its base vehicle. While this allows Via to keep research and development costs down - it doesn't have to build its own trucks - it also limits how innovative the company can be.
For example, the best way to improve fuel economy is to drop the weight. And the current best strategy to drop weight is to use aluminum like in the new Ford F-150. Via Motors has to wait until GM goes aluminum before it can pass this benefit to its customers.
This business model limits what Via can do and leaves it somewhat exposed; if customer demand grows quickly for the Via Motors' trucks, other manufacturers could simply offer their own system.
Speaking of customers, West said Via is continuing to build a larger fleet business before it offers its vehicles to average consumers. However, when it does, it will be an interesting option for many truck buyers.
As for the other major manufacturers, consumer demand is what will push them into offering hybrid pickup trucks. As consumers demand fuel-efficient engines with good towing capacities, the business case for a hybrid full-size truck will get better.