Meet the Truck Smoking the New Ford F-150 in Efficiency Gains

Ford Motor Company introduced an all-new aluminum design for the best-selling truck series in America in January that will boost fuel economy by slashing curb weight. Too bad Cummins and Peterbilt built a truck that makes the F-150's efficiency gains look like child's play.

Feb 23, 2014 at 12:50PM

Ford (NYSE:F) stole the headlines at The 2014 North American International Auto Show in January with the public debut of its new aluminum body F-150. The 2015 lineup will drop 500 to 700 pounds in curb weight and, when coupled with a variety of engine options, could save drivers a substantial amount in fuel costs compared with previous models. Although investors and gearheads won't know the exact efficiency ratings until Ford provides updates, I took a stab at estimating the fuel economy for each new model.

The results were impressive, sure, but they don't come close to matching the 20% increase in engine efficiency and 70% increase in freight efficiency made since 2010 of a new truck built and tested by Cummins (NYSE:CMI) and Peterbilt. Oh, yeah -- the new truck also sports an over 84% increase in fuel economy compared with other trucks in its class. Are you ready for it?


Hi, my name is SuperTruck. Source: Sarah Gerrity / Department of Energy.

OK, so the SuperTruck won't actually compete with the Ford F-150, but it's certainly more important to America's energy future than Ford's innovation. That's not an attempt to marginalize the new F-150 -- it's just difficult to say otherwise after analyzing the numbers.

SuperTruck = SuperSavings
The new Class 8 tractor-trailer can get a whopping 10.7 mpg in real-world driving conditions. That may seem laughably inefficient, but it marks quite an improvement over the average Class 8 fuel economy of just 5.8 mpg. It was built as part of the Department of Energy's SuperTruck initiative, which aims to create tractor-trailers that are 50% more efficient than current models. For those of you keeping score at home, Cummins and Peterbilt have already beaten that watermark.

No wonder the SuperTruck was in attendance when President Obama unveiled the new fuel economy guidelines for heavy-duty vehicles last week -- part of the across-the-board improvements he's made in efficiency standards since taking office. Better yet, rather than establishing a one-size-fits-all threshold, the heavy-duty category is broken down into three sub-categories. The next-generation SuperTruck resides in the top category.


Why make an effort to improve the efficiency of the heavy-duty vehicles traversing American highways, especially Class 8 vehicles, which account for just 4% of the nation's total vehicle fleet? Well, it's all pretty simple. Consider that Class 8 vehicles transport nearly 80% of the country's goods and consume nearly 20% of the country's fuel. Do the words "ridiculously disproportionate" come to mind?

Replacing America's entire Class 8 fleet with SuperTrucks could reduce national fuel consumption by 10%, equivalent to saving 300 million barrels of oil, and $30 billion per year based on current diesel prices (also equivalent to one and a half WhatsApps in annual fuel costs). To further put those savings in perspective, consider the following. The first wave of fuel economy standards rolled out in 2011 for medium- and heavy-duty vehicles covered model years 2014 to 2018. According to the White House:

Over the lifetimes of the vehicles covered, trucks and buses will reduce oil consumption by a projected 530 million barrels and greenhouse gas pollution by approximately 270 million metric tons, saving vehicle owners and operators an estimated $50 billion in fuel costs.

So, rolling out an entire fleet of SuperTrucks could save more money in two years than the entire fleet of medium- and heavy-duty vehicles spanning a five-year model period could save over their lifetime of operation. Please check your pulse if that isn't one of the most amazing vehicle facts you've ever heard.

What does it all mean for Cummins and Peterbilt? Big things, perhaps. Because it represents such an amazing improvement over incumbent technology, truck operators may not have much of a choice when purchasing new vehicles. When you consider that one SuperTruck could save an operator $20,000 in annual fuel costs, the rationale for purchasing one becomes clear.

Foolish bottom line
New F-150 models mark a major improvement in consumer vehicle efficiency -- and effectively squash any concerns about meeting the new aggressive Corporate Average Fuel Economy standards. But while shedding up to 700 pounds in weight is impressive, the overall fuel savings and efficiency gains made by the new SuperTruck from Cummins and Peterbilt will have a greater impact on the nation's fuel consumption. Nonetheless, both next-generation vehicles will be a critical piece of America's energy future -- it's just difficult to beat the SuperTruck. 

You can't buy a SuperTruck, but you can still find SuperSavings
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Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolioCAPS pageprevious writing for The Motley Fool, or his work for the SynBioBeta to keep up with developments in the synthetic biology industry.

The Motley Fool recommends and owns shares of Cummins and Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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