Justin Ashton

Justin Ashton

US-based XL Hybrids is a developer of hybrid-electric powertrain technology for commercial vans and pickup trucks. In this interview, Matthew Beecham talked with the company's VP of business development and co-founder, Justin Ashton about what makes their technology different and where we can see it.

The automotive market is flooded with hybrid electric powertrains. What's different about yours?

Correct, but there are many types of hybrid powertrains and price points and the combination of the following factors really differentiates our products in the market.

Our technology was designed specifically for the commercial truck market, which to date has lacked a viable, durable hybrid solution, not small consumer vehicles.

It was designed from the beginning to be an aftermarket product, meaning it could be installed on new or in-service vehicles and rapidly adapted for a wide variety of truck and van models, eventually including global vehicle models.

XL Hybrids' business model is to sell the hybrid powertrain directly to end users (companies with large fleets and fuel bills) who feel the pain of volatile and rising fuel costs.

We have designed the technology and established the industry partnerships to keep the OEM vehicle warranty in-place. This is not a trivial challenge.

Finally, our hybrid powertrain was designed from the ground-up to offer a compelling return on investment for fleet customers. This means we made technical design decisions that allowed us to reduce fuel consumption by more than 20 percent but still allow us to price the technology to achieve a three-year payback, a key milestone for fleet buyers.

On which vehicles can we see your electric powertrain?

We have already released the hybrid powertrain for North American light duty GM Express and Ford E-Series vans and announced a shuttle bus hybrid option for cutaway versions of GM and Ford vans, such as you might find on small school buses and airport shuttles. We also anticipate releasing a version for Class 4 box trucks as well as walk-in vans like you might see in package delivery fleets.

Could you tell us more about your partnership with FedEx?

FedEx is one of our customers and it is converting conventionally powered panel vans with our hybrid powertrain to become more fuel-efficient. Clearly, FedEx is a leader in evaluating and deploying clean transportation technologies and we are honoured to have it buying our hybrid powertrains.

You have recently raised US$4 million Series B round. How will you invest it?

The latest investment funds engineering work, which will make our technology compatible with more vehicle models and it also supports rapid sales growth in North America.

With such a dependency on low carbon vehicle technology, does it concern you that EV sales are sluggish in some markets?

No. I am not surprised that full EVs are not meeting some analysts' projections. The major cost driver of electrified vehicle technology is the battery packs, and EVs require very large battery packs. Battery prices have not fallen as fast as many analysts originally thought. However, our assumption four years ago was that batteries would remain expensive for a decade and that HEVs were already cost effective because HEVs typically require about one-thirtieth to 1-fiftieth the battery energy as commercial EVs.

Finally, in the commercial vehicle segment, EVs face additional challenges compared to the consumer segment because the vehicles are driven many more miles per day and require long range in a heavier vehicle. Commercial-sized EVs are still quite expensive with little to no payback without large government subsidies (which have mostly disappeared in the USA).

What are your thoughts on how fast the hybrid and electric commercial vehicle market could grow in North America?

We are obviously quite bullish about the growth potential of commercial HEVs. Our technology is proven and the ROI is compelling. Furthermore, all the competitive options - such as compressed natural gas, propane autogas and even EVs - require infrastructure such as new fuelling and charging stations. The cost-payback frontier is the key metric for businesses so EVs will be a tough sell until costs drop or oil prices rise even further. Finally, I do think that EVs will have a place in the commercial vehicle market, especially beyond 2020 as battery prices fall with manufacturing scale coming from the demand in consumer segment.

As we understand it, the Chinese government is making a strong push to full electrics. What do you see happening there? And what are your ambitions to expand in to markets further afield?

China is a different market than anywhere else in the world. The government can change or direct policy on a massive scale very quickly. This will likely speed the deployment of EVs beyond what will happen in the USA and Europe. The primary push will come with mandates and subsidies (or taxes on conventional options) that make EVs very attractive. However, we still see the majority of commercial vehicles being diesel or gasoline, even in China, for many years. XL Hybrids has plans to expand availability of the hybrid powertrain to other markets on select global commercial vehicle models. However, we have a large untapped market in the USA to grow into first.

What's the next stage for your electric powertrain?

The remainder of this interview is available on just-auto's QUBE research service

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