November 6, 2014 Allison Transmission, Inc. 1

Allison Transmission’s Responses to EPA’s Hybrid Questions

Do you think that operating and maintenance costs for these hybrids will remain at the 

current level for new vehicles built after 2021, or is there an expectation the costs faced by 

owners of future vehicles will be less?

Operating and Maintenance Costs

This is not a simple question to answer because there are many external influences that 

surround hybrids for commercial vehicles. To start with the transit bus market, since 2003

when Allison introduced the first hybrid for transit buses, new vehicle purchases have had 

supplemental government and incentive funding that generally offsets the over cost of the 

hybrid system. The market for transit buses in the US is about 4000 units/year with about 14%

being hybrid, and split between two manufacturers. At this volume level, the lower costs 

normally associated with economies of scale due to volume, have not been realized. Many 

Class 8 vocational trucks that are similar in torque and power to a transit bus, do not have a 

duty cycle that is hybrid-relevant. Also, trucks do not have space for hybrid components in the 

size and shape that fit well in a bus. So, between limitations of duty cycle and space claim with 

no federal funding, there has been no volume growth in trucks through the use of a common 

hybrid system. 

When service parts and repairs are needed, they tend to be very expensive due to the 

component complexity and low volume. Anecdotally, fleets have reported that hybrid vehicles 

tend to have lower total maintenance and repair costs than vehicles with conventional 

powertrains due to less work done by the engine and brakes. Allison has no data to quantify 

this report, but it sounds rational. As an example, some properties have reported brake life of 

170,000 miles with Allison Hybrids, as compared to 55,000 miles with a standard diesel or CNGequipped bus. Some 60-foot articulated hybrids deployed in 2004 were still operating in 2011 

with their original brakes at 250,000 miles. To know whether few, high cost repairs offset other 

maintenance costs, will depend on the durability of the product, the operational profile of a 

specific fleet, and that fleet’s maintenance practices. The fleet re-purchases that we have seen 

since 2003 would lead us to believe that the value is there when looking at total life cycle cost 

(including acquisition, maintenance, fuel, etc.), when incentives are in place for the initial 

purchases.

Looking out past 2021, hybrid technology is a good solution for some vocational vehicles that 

operate in a moderate to high kinetic intensity drive cycle. Hybrids are now competing with 

improved traditional, diesel powertrains and natural gas as an alternative. It is unknown how 

the hybrid/natural gas trade-off will evolve over the next few years. However, in the absence 

of very stringent emissions and GHG regulations, and with fuel prices remaining low and 

alternative fuels like CNG gaining momentum and infrastructure availability, hybrid adoption 

will not grow quickly. Unless hybrid adoption shows signs of growth potential, manufacturers 

will limit investment in hybrid technology. Limited investment will not grow the volume which 
November 6, 2014 Allison Transmission, Inc. 2

is needed to have a break-through in cost. So, to answer the question, on a relative scale, 

operating and maintenance costs would be expected to be about the same as today’s levels.

Do you think battery replacement is an item that should be built into EPA’s expected cost of a 

hybrid system? If so, what would be a fair way to classify that cost – would it be included in 

the up-front costs, or considered O&M, or something else?

Battery Replacement

A lot of work is going on surrounding battery chemistry and progress is being made. Allison 

expects that batteries will continue to advance. Gains are being made in performance, 

capacity, energy and power density. With those advancements being relatively immature, we 

would expect that battery replacement would be required during the life of a hybrid vehicle. 

The timing of a battery replacement will be drive cycle and mileage dependent as the battery 

life is primarily determined by operating temperature, state of charge fluctuations, and battery 

chemistry. We would categorize a replacement battery as an operating and maintenance cost. 

We also want to fairly characterize the expected state of the technology that will be ready for 

deployment 7-10 years from now. Any help that your team can offer us in this area would be 

very much appreciated.

State of Technology in 7-10 Years

Relative to the state of technology and how that relates to reliability and durability, most 

commercial vehicle manufacturers do not release and produce vehicles with known immature 

technology. Commercial vehicles have to be reliable so the fleets can get their work done. 

Money is not available for fleets to have many spare vehicles on-hand to use when a vehicle 

breaks down. Most fleets want to try new capabilities on a limited number of vehicles before 

full adoption so they can find out how it impacts their total experience from driver training to 

fuel economy, down-time, etc. Some “early adopters” will tolerate more operational issues;

however, most fleets will not unless there is some other factor that influences their purchase 

decision. Manufacturers strive to produce products that will last for the life of the vehicle, but 

some parts do wear out and have to be replaced over time. This is true for any vehicle, 

whether it is light duty or heavy duty. With the introduction of a complex system such as a 

hybrid, years are required for fleets and manufacturers to obtain the experience to know what 

to expect and plan for as normal operating and maintenance costs of low volume components. 

As described earlier, a repair could be very costly when it happens, but fleets and 

manufacturers take steps to minimize part failures through encouragement of preventive 

maintenance practices. There are also special service kits and repair procedures that are 

developed when a particular component is seen to have high cost and/or frequent failures. For 

a high-power system like a hybrid, personnel safety during maintenance and repairs is the 

foremost consideration. Based on all the complexities of vocational vehicles, Allison believes 
November 6, 2014 Allison Transmission, Inc. 3

that our hybrid system falls in line with the norms for other major vehicle components. Allison 

is not equipped with data to address the fleet experience of other manufacturers’ systems.

Looking at the evolution of technology, Allison believes that hybrids will remain to be a viable 

technology in commercial vehicles. The interest in plug-in hybrids is expected to grow as a step 

to ZEV. For most commercial vehicle fleets, range anxiety is a significant limitation to ZEV. The 

infrastructure to support commercial vehicle charging is in its infancy. In addition to the cost 

challenges for the vehicles, cost challenges also exist for the infrastructure to support large, 

commercial vehicle fleets. Significant advancements in fuel cells are needed before they will be 

adopted. ZEV adoption in commercial vehicles is expected to lag that of passenger cars. 

Allison does not believe that the medium and heavy duty fleet should have stringencies 

established that require adoption of hybrids in the 7-10 year horizon. Transit buses have shown 

that the hybrids provide value based on a transit bus duty cycle. But, this value is only 

recognized with incentives in place to offset the overcost. Hybrids have not been adopted in 

heavy-duty trucks and we are not aware of any electric hybrids offered as original equipment in 

Classes 6-8. Hino has a Class 5 hybrid truck introduced in 2013 with only about 500 sold, as 

mentioned at the September HTUF meeting, even with California incentives of $18,000 -

$23,000 for a truck priced around $71,000. (http://hinohybrids.com) For volume production in 

the 2021 time frame, Allison believes that neither fleets nor manufacturers have the business 

case and low cost technologies that will support a widespread hybrid fleet.