Though petrol and diesel have long been the most popular motor fuels worldwide, alternatives have been available for many years. Convenience, taxation or distribution shortcomings have often restricted their use, but times are changing, and new, advanced hybrid and electric vehicles are now available. Today's choice of alternatively fuelled vehicles is wide and growing – but there are still some key concerns, amongst them depreciation, operating costs, practicality, emissions performance and fuel consumption.

The familiar alternatives

Liquid Petroleum Gas (LPG) is a long established alternative fuel, though suitably equipped new vehicles remain less common than aftermarket "dual-fuel" conversions of petrol-engined vehicles. A separate additional LPG tank is added, with the original petrol tank remaining. Easy switching between them allows much increased vehicle range, and CO2 emissions are typically 15-20% lower, with other emissions much reduced – especially compared to diesel. Aftermarket conversions are available for new and existing vehicles, priced from €1,500 upwards, though fuel costs less in most European countries. In January, the highest LPG price on the website www.fuel-prices-europe.info was €1.203 per litre in Denmark, where petrol was €1.687, and diesel €1.542. LPG consumption is slightly higher than petrol, offsetting the lower price, and conversion or purchase costs must also be recovered against fuel prices within planned vehicle lifetimes. Easy fuelling access is vital: the same website indicates over 6,000 stations in Turkey and Poland, and 5,900 in Germany. Italy, the Netherlands and France have many stations, but Sweden has just 16, Denmark 34, and Spain 40.

The Spanish-based Natural Gas Vehicle Association (NGVA) estimates that some two million vehicles worldwide were using compressed natural gas (CNG) in 2003, of which 500,000 were in Europe. By 2011 there were 13m CNG powered vehicles, with 1.4m in Europe. The Association's latest data, for June 2013, ranks Italy as Europe’s top CNG market, with 846,000 suitably-equipped vehicles, mostly cars and light vans, serviced by over 900 public refuelling points, and 47 privately owned stations. Germany had 96,000 CNG- powered vehicles, with 844 public and 71 private stations. Russia, Switzerland, France, Sweden, Bulgaria, the Netherlands and Austria each had over 100 outlets. Some European countries have few public stations, amongst them Denmark, Ireland and the United Kingdom.

Since CNG is a gas, pricing comparisons with conventional fuels are difficult, but an extensive NGVA comparative study in December 2011 showed an EU average CNG price of €0.78 per cubic metre. Related to actual energy purchased, this was 54% of the equivalent average petrol price, 53% that of diesel, and 63% that of LPG. Private fuelling facilities can be installed for better fuel pricing where large fleets operate from central bases.

CNG vehicles require an extra high-pressure tank, taking much more space than the LPG equivalent, ensuring popularity in goods vehicle fleets where large tanks are easily fitted. The fuel is largely comprised of methane gas, and contains less energy than LPG petrol or diesel, so consumption is noticeably higher, but dual-fuel systems are usual, and usefully extend operating range. CO2 emissions are 20% lower than petrol, with zero particulates, reduced sulphur and much lower nitrogen oxide levels than diesel. Bio-methane is a relative of CNG, and widely used in Sweden. It’s produced from renewable sources, and as a sustainable fuel is gaining increased acceptance worldwide.

Electromobility gathers pace

Lengthy recharge times and 150km maximum range are usually seen as principal drawbacks of all-electric vehicles (EVs).

According to Nissan, in Europe fast charging point numbers have grown from just 16 in 2010 to around 1,000 today, aiding longer distance driving – though EV’s naturally remain particularly suited to intensive urban use. Negligible emissions and very low running costs are notable advantages, but a recent CAP consulting study found steep depreciation and particularly low residual values in countries with generous sales subsidies.

Mark Norman of CAP Consulting says: 'The Nissan Leaf is approaching three years old, and originally cost around €34,000 in some subsidised markets. Today, it retains just 23% of that value, double the depreciation of conventional cars – with direct correlation between stronger values in Germany and Italy, which lack subsidies, and weaker values in France and the UK.'

Led by Scandinavia, several countries prefer local benefits and incentives over initial subsidies, but for fleet operators, limited range, high purchase prices and very rapid depreciation are likely to be the overriding factors for some time to come.

Residual values vary by market.

In European markets with sufficient demand, Opel, Mercedes-Benz, Audi, Seat, Volkswagen and Fiat are amongst several major manufacturers offering new CNG-adapted cars and light vans, with most also providing LPG alternatives. With both fuels, servicing, insurance, new vehicle warranty and possible usage restrictions need consideration, but depreciation and vehicle disposal values are key aspects.

Here, Mark Norman of CAP Consulting reports LPG-equipped vehicle depreciation higher than similar conventionally powered cars, with residual values perhaps 5% lower over three years. 'The quality of the conversion is important,' he says. 'In many countries LPG is usually seen as an aftermarket accessory, though new car LPG options are growing. Sometimes, whatever the original cost, three year old dual-fuel cars achieve only €500 to €1,000 over equivalent petrol cars.' The CNG situation is quite similar, though numbers of new original-equipment cars are fast increasing, and residuals are highest in countries with a developed market like Italy. Some industry observers predict that success for the latest Audi A3 g-tron in Europe could stimulate CNG vehicle sales.

In general, now-familiar cars with petrol or diesel hybrid drivetrains return competitive residual values resulting from familiarity, well-known brands, wide public acceptance and no unusual fuelling arrangements. ‘Plug-in’ hybrids are a further development of such cars, providing extended zero-emission range useful in low-emission zones. Both types offer reduced emissions and potential for improved fuel economy over conventional cars.

So-called "range-extender" hybrids are still rare, with the Opel Ampera offering up to 40km electric-only capability, and including a small petrol engine for battery charging – removing the "range anxiety" associated with electric-only vehicles. Analysts at German-based bf Forecasts believe this sector will grow strongly in coming years.

US perspective

The US Department of Energy’s (DoE) latest figures (for 2010) show almost 950,000 alternative-fuelled vehicles on US roads, though gasoline remains preferred for all but the largest vehicles. LPG is long established, and declining but still quite widely used. CNG is also established, and the "fracking" boom has brought rapidly falling prices.

With gasoline around $3.50 per US gallon, equivalent CNG prices are now around $1.20. This financial advantage is driving demand amongst commercial fleets, with Ford, Chrysler and GM offering CNG-fuelled commercial vehicles – though aftermarket conversion costs can run beyond $5,000. Rapid growth in CNG vehicle numbers is expected from the DoE 2010 figure of 115,000, though limited fuelling facilities are a constraint. The US has around 170,000 gas stations – but DoE figures indicate just 660 public CNG outlets. One dual-fuel passenger car is currently available, the Honda Civic Natural Gas, to be joined in 2015 by a bi-fuel Chevrolet Impala, also to be sold in Canada.

The pure electric vehicle market is small, but grew from 8,200 vehicles in 2010 to 34,000 in 2012 according to the DoE – helped by over 7,000 charging points across the US. Tesla, Fiat and Chevrolet are amongst those listing all-electric passenger cars. Petrol-electric hybrids are becoming popular, with 38 car models on sale in 2013, led by vehicles from Mercedes-Benz, Buick, Lexus, Toyota, Hyundai and others. A handful of hydrogen-powered cars remain from successful trials begun in 2003: the DoE anticipates commercially available examples could follow in 2015.

Blue skies, palm trees waving in a gentle breeze, the shining sea lapping gently against beautiful beaches… the US state of Hawaii can lay claim to being a paradise on earth, at least so far as its tourism authority is concerned, and governor Neil Abercrombie is determined to keep it that way.

He is a keen supporter of electric vehicles and was happy to endorse rental fleet Enterprise’s decision to start offering battery-powered cars to customers arriving at Honolulu International Airport and to set up a charging station there.

‘Such vehicles are an essential part of Hawaii’s transition to a clean energy economy,’ he states. The aim is for 70% of the state’s energy to come from clean sources by 2030.

‘We plan to expand the locations that offer electric vehicles to many of our 29 neighbourhood, resort, and airport branch locations in order to meet the growing needs of renters,’ said Paul Kopel, vice president and general manager of operations for Enterprise Holdings in Hawaii.

The increased use of electric cars is being supported by the state of Hawaii Electric Vehicle Ready Grant Program and the Enterprise charging locations form part of a network deployed by Better Place Hawaii under the scheme’s auspices. In another initiative, the Hawaii State Energy Office has just released EV Stations Hawaii, an app that plots the locations of publicly available charging stations.

Government support of electric vehicles – sometimes through grants that bridge the gap between the premium price of a battery-powered car and its petrol or diesel equivalent – is viewed as vital in many countries if their use is to be encouraged. That is particularly the case given that they face an uphill battle in some markets according to KPMG’s Global Automotive Executive Survey 2013.

‘Just one in 10 of all survey participants think battery electrified vehicles will be the next big thing,’ the survey observes. Despite the availability of subsidies, buyers remain wary of making the commitment although attitudes vary strongly from one country to another.

While Russian respondents were optimistic about the technology’s potential, Chinese respondents were pessimistic, even though it is strongly supported in the country’s Five Year Plan.

To overcome these reservations vehicle manufacturers need to redouble their efforts to cut the cost of batteries and the drivetrain, so says Oliver Hazimeh, automotive cleantech transportation leader at PwC.

‘Simply passing high initial development costs on to the customer is not a long-term option and it is not viable to rely on long-term government incentives either,’ he observed: what government gives, government can also take away. ‘Auto companies need to deploy smart vehicle and technology platforms and global partnerships to achieve economies of scale.’

Range limitations between recharges remain a key concern, but one that fleets can address by deploying electric vehicles on short-range urban work rather than attempting to use them on trips that push them to the edge of their capabilities.

Amsterdam, Netherlands-based taxi fleet Taxi-E runs 13 zero-emission Nissan LEAF cabs in and around the city and Ruud Zandvliet, one of the executives behind the company, says that they are ideal for this sort of application.

Because they are never too far away from a charging point they can be quick-charged two or three times daily so that they are always available. That addresses another concern that potential users have: the worry that their vehicle will have to be plugged into a power point for hour after wearisome hour before it can be used again.

‘There are some 3,000 taxis in Amsterdam so there is obviously plenty of scope to reduce emissions even further if operators are prepared to switch to electric,’ Zandvliet says.

Turning to Switzerland, 10 Nissan LEAF cabs are scheduled to go into service in Zurich later this year. Underlining the fact that the proper provision of infrastructure is vitally important if electric vehicles are to be a success, they are being supported by a network of fast-chargers as part of plans by the city fathers to ensure that 15% of the cabs on Zurich’s streets are electric by 2015.

The chargers are capable of replenishing a battery to 80% of its capacity in just 30 minutes: but with many customers arriving with batteries with a reasonable amount of charge left in them, the average stay is just 15 minutes.

Electric cars do of course have the advantage of low running costs once they have been acquired. In many markets the cost of the power they use is modest, tax concessions can be claimed for them, fewer moving parts means low maintenance bills and they can gain access to city centres without the owners having to face congestion charges.

How long the batteries they employ will last before requiring replacement – and how much those replacements will cost – remains a concern however.

It has prompted several manufacturers to offer batteries under separate lease agreements, which in some cases has resulted in clashes with residual value guides. They contend that they cannot project a residual value for a vehicle whose power source may be under separate ownership and such a stance naturally affects contract hire rates.

The limitations of pure battery vehicles and the continued impact of those limitations on their appeal mean that respondents to the KPMG survey referred to earlier placed more faith in both plug-in and non-plug-in hybrids and in battery electric cars with range extenders.

As if to endorse this faith, last year saw Europcar make 30 range-extended Opel Amperas available for hire from outlets in Amsterdam, Brussels in Belgium, and Frankfurt in Germany. ‘Ampera has a range of more than 500 kilometres and combines all of the capabilities our customers expect from a car for everyday all-round use,’ said Opel e-mobility launch director, Enno Fuchs.

‘Japan has already taken to hybrids in a big way,’ observes the KPMG study. ‘In May 2012 alone a fifth of all vehicles registered were hybrids although that figure excludes minicars.

‘Consequently there is little expectation among Japanese auto executives that battery-powered cars will be in high demand, especially given the worries over electricity supplies in the wake of the Fukushima nuclear disaster.’

That underlines a perennial difficulty with battery power. While the streets of a country’s capital may be made cleaner and greener as a consequence of an absence of exhaust emissions, the low-grade brown coal that fuels the power station 200 miles away that produces the power the batteries need, may be causing widespread air pollution and be a contributory cause to periodic downpours of acid rain that destroy trees and rivers.

One of the most interesting aspects of the KPMG study is the faith so many respondents have in the potential of fuel cells. While only 17% of respondents felt that vehicles powered by them would eventually take the lead – a lower percentage than was recorded when a similar study was conducted in 2012 – in China they were viewed as the best bet by 44% of respondents.

‘As fuel cell technology is also part of China’s Five Year Plan there is no doubt that both BAIC and SAIC are investing in the production of fuel cell cars,’ says the study. ‘SAIC even plans to mass-produce its fuel cell model in 2015.’

While cynics often observe that the widespread introduction of fuel cells is 20 years away and was 20 years away 20 years ago – in other words, it is always just over the horizon – General Motors and Honda aim to shrink that time scale. They have announced a joint-venture agreement to co-develop next-generation fuel cell systems and hydrogen storage technologies with 2020 the target date. Both companies have plenty of fuel cell experience.

Launched in 2007, GM’s Project Driveway programme has accumulated almost 3m miles of real-world driving with a fleet of 119 hydrogen-powered vehicles. Honda began offering the FCX on a lease basis as long ago as 2002 and has deployed 85 in the USA and Japan, including its successor the FCX Clarity.

GM and Honda point out that fuel cell vehicles can operate on renewable energy from sources such as wind and biomass, the only emission they produce is water vapour and they can offer a range of up to 400 miles.

The appeal of gaseous fuels varies hugely from market to market and is significantly influenced by tax and by availability, with units dispensing compressed natural gas (CNG) or liquefied petroleum gas (LPG) a rare site at publicly accessible fuel stations in some countries.

That need not be a drawback, however, so far as those commercial vehicle operators whose vans and trucks operate locally and always return to the same depot at night are concerned.

One company that has embraced CNG with alacrity is TNT Express Italy. Last year it placed an order for 115 CNG-powered Iveco Daily vans that are being used to deliver packages and parcels in Rome and elsewhere in central Italy.

In Italy switching from diesel to CNG means a cut in fuel costs of around 40% according to Iveco and a reduction in CO2 output of from 5% to 8%: a fall of 370 tonnes annually so far as TNT Express Italy is concerned.

‘It is the best short and medium-term solution for the reduction of harmful emissions and an effective alternative so far as the high costs of fuel and transport are concerned,’ commented chief executive officer, Uffe Ekstedt. 

Lead-carbon batteries will be the "next big thing" so far as electric vehicle technology is concerned if the USA’s Advanced Lead Acid Battery Consortium (ALABC) has its way.

Along with the US Department of Energy it has been involved in a project managed by Ecotality North America to assess the durability of lead-carbon batteries in the high-rate partial state-of-charge operation of a hybrid vehicle. It did so by running a Honda Civic HEV retrofitted with lead-carbon UltraBattery modules sourced from East Penn Manufacturing on courier work in and around Phoenix Arizona.

The Honda covered over 160,000kms in just under two years with no significant loss in battery capacity, according to ALABC. In terms of energy usage it achieved a comparable level of performance to that of a hybrid Civic employing nickel-metal-hydride batteries claims the organisation but at significantly lower cost.

The UltraBattery combines a traditional lead-acid battery with a carbon-enhanced supercapacitor in a single component.