Preserving the Environment

How Does One Man Reduce U.S. Dependency on Oil? He Starts with Trucks and Vans

March 13, 2015
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How Does One Man Reduce U.S. Dependency on Oil? He Starts with Trucks and Vans
XL Hybrids converts commercial fleets to hybrid vehicles by installing hybrid electric power trains. Courtesy XL Hybrids
Some of America's biggest companies think this is a brilliant idea.

When Clay Siegert is stuck in traffic behind a box truck, he doesn’t groan at the jumbo-sized gas-guzzler: He sees it as an opportunity.

As vice-president and co-founder of XL Hybrids, a Massachusetts-based company that converts commercial fleets to hybrid vehicles, Siegert is out to prove that the business of cargo transport doesn’t have to be a dirty one. XL Hybrids retrofits vans, minibuses and trucks by installing hybrid electric powertrains, so that every time a driver hits the brakes, a bit of kinetic energy is converted into valuable electricity. It’s a winning formula: The vehicles use 25 percent less gasoline, lowering carbon dioxide emissions while also reducing their company’s bottom line.

“When I see a truck going down the road with hybrid technology, I see less emissions, less oil being imported into the country,” Siegert says. “It’s more than just a truck or a van that drives somewhere. It’s those trucks that are going to drive hundreds of miles, maybe just that day. That adds up.”

Siegert spent more than a decade in various positions — at a firm trading energy commodities on the financial markets, a deregulated energy supplier offering a green alternatives to buying from local utilities and a trivia game manufacturer — before returning to school. While earning a master’s degree in supply chain management from Massachusetts Institute of Technology (MIT), Siegert was introduced to Tod Hynes, a lecturer at MIT’s Sloan School of Management, who’d developed several wind energy projects. The pair hit it off and decided to collaborate on a new venture, though at the time, they weren’t exactly sure what.

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“Tod was looking for what was next in his career, and we both had an interest in clean technology and clean energy,” Siegert recalls. “Just looking at all the different industries, we kept thinking about all the millions of vehicles on the roads. We crystallized the idea that if you come up with a fuel-efficient technology that’s cost-effective, you could have a big impact on the amount of petroleum and gasoline used in North America and, eventually, globally.”

Because the big automakers (Ford, General Motors, Chrysler) already had huge research and development departments with decades of experience improving fuel efficiency, consumer cars were out of the question. Commercial fleets, on the other hand, were a largely untapped market.

XL Hybrids inked their first major deal with Coca-Cola, the world’s largest beverage company. Though Siegert was ecstatic a big brand signed on, he was also nervous about translating an idea that looked good “on whiteboards, spreadsheets and technical designs” into a reality. “Now you’ve gotta go out and deliver the results,” he thought. Luckily, the company did. Retrofits of 175 Coca-Cola vans hit the roads last year, cutting fuel usage by 20 percent, saving 6,000 metric tons of carbon dioxide and at least $15,000 over each vehicle’s 10-year lifespan.

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Coke is buying more, including 70 this year. XL Hybrids has since brought on PepsiCo, FedEx and the City of Boston as customers. Last October, all the vehicles it had retrofitted reached a collective 4 million miles in service. Already, that means the company saved 800 barrels of oil and over 350 metric tons of carbon dioxide exhaust.

Today, Siegert is tasked with brokering those sales and overseeing daily production. In addition to the official titles printed on his business card, his colleagues know him to be a “strategic planner,” a “supply chain optimizer” and a “sales accelerator.” Above all, he prizes efficiency and affordability. That’s why XL Hybrids skips adding any fancy frills during its retrofits; the company’s technology is available for under $10,000 without government subsidies — a first. “We remove costs wherever we can,” he says. “One of the core tenets of our business, for whatever product [Tod and I] came up with, was that we wanted it to be cost-effective and have a good payback.”

While that sounds like pretty standard business advice, it’s missing from a large swath of the clean energy sector, where customers are expected to pay a premium to get something green. At XL Hybrids, Siegert wants to prove that sustainability and profit can be two sides of the same coin. He’s splicing corporate interests and ecological concerns, in a word, into a hybrid. After all, when it comes to miles per gallon, what’s good for the environment is also good for investors.
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