Attention Please!

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Logistics as a Percent of GDP...
Source U.S. Department of Commerce
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The Bridge to 2007
2007
2002
Lube Oil
Vehicle
Engine
Fuel
Aftertreatment
All Systems must be in-place to be a success
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Total Incremental Cost Estimates for 2.5 g/bhp-hr
NoxNMHC Engine / Vehicle vs. Current
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Cost Effectiveness of Environmental Benefit From
2.5g/bhp-hr NOxNMHC Engines
October 2002 Implementation
16,000
14,000
January 2004 Implementation
12,000
10,000
Cost (/ton in 2001 dollars)
8,000
6,000
4,000
2,000
0
Tier 2 Off-Auto Highway
1997 EPA
2000 EPA
2002 EPA
2002 Industry
2002 Industry
Estimate
Estimate
Estimate
Estimate
Estimate
(Source A.I.R. (Air Improvement Resources)
Analysis
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Total Cost of 02 and 07 Engines
2007
2002
16,000
4,500
Purchase price
5,500 6,000 ______ 11,000
7,200 9,000 5,100 21,300
Fuel MPG Maintenance Other (Fuel CPG) Total
Operating
5,000
Residual value reduction
4,000
42,300
18,500
Total Cost
35,000
15,000
NPV (6 years _at_ 8)
Arbitrary timeframes coupled with significant
technology changes have pushed the burden onto
the motor carrier industry
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Conclusion

• Significant technical challenges.
• Potential significant cost impacts.
• Fuel / Vehicle / Engine system integration.
• Market Impacts
• Field evaluations critical.
• Purchase incentive required.