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2011 Alternative Fuels OfferingsTerri Zacha Mann

Manager-SW/SE RegionsHybrid/CNG/Alt Fuels/Grants

Terri.zacha.mann@navistar.com

6/6/2011

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Natural Gas

• Why Natural Gas• Why it Makes Sense Now• Delivering Value to Our Customers

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Why Natural Gas

• Reduce our Dependence on Foreign Oil

• Available Supply 100+ Years• Distribution Beginning to Be

Solved– 1100+ Fueling Stations– 50% Open to Public– http://www.afdc.energy.gov/afdc/fuels/natural_gas_location

s.html• Environmentally Sound

– Cleanest Burning Fossil FuelOur Customers!!

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What were our options….

• Do Nothing

• 3+ year Engineering/development

• Collaboration-using what others have built:

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Our Partner

• Emissions Solutions Inc– McKinney, Texas– Dedicated natural gas engines– Patented technologies– Phoenix 7.6L natural gas engine

• DT466 Configuration– 2010 EPA/CARB Certified

• Turbocharged• Maintenance Free passive 3-way

Catalyst Converter• No EGR• www.emissionsolutioninc.com

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Our Initial Offering

Medium Duty• Collaborate with ESI

– Utilize 7.6L Phoenix engine (DT-466)– 2010 Emission Compliant– 2004 Base Engine– Garland TSC interface

• Natural gas engine prep• Tank installation• Production line sequenced

– Garland Assembly Plant production– WorkStar Chassis available now– DuraStar Chassis May/June 2011

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Our Initial Offering

• Emissions Solutions Inc– Features Stoichiometric air/fuel

technology• Dedicated spark ignited• Computerized control management• ECU Diagnostic capabilities

– Wide range of HP’s• 210, 225, 255, 285, and 300• 30 or 60 DGE tanks behind the cab or

along the frame rails– Maintenance Intervals

• Oil/Filter: 20K or 1K Hours• Spark Plug: 50K or 2K Hours

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MY2010 Phoenix NG 7.6LESI0326 Performance Curves

300 hp

@

860 lb-ft

215 hp

@

550 lb-ft

215 hp

@

600 lb-ft

300 hp

@

900 lb-ft

MY2009 MaxxForce DT®DT Performance Curves

215 hp

@

550 lb-ft

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Current Offering

WorkStar Models Offered From the Factory

Available Now Model Code Model Description

SA515 7300 SFA 4X2

SA615 7300 SBA 4X2

SA525 7400 SFA 4X2

SA625 7400 SBA 4X2

SF525 7400 SFA 6X4

SF625 7400 SBA 6X4

Future ModelsModel Code Model Description

SA025 7300 SBA 4X2 SL

SA035 7400 SBA 4X2 SL

SF035 7400 SBA 6X4 SL

DuraStar Availability May/June 2011

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Manufacturing Process

Manufacturing ProcessGarland Manufacturing Facility & Garland TSC

The manufacturing process will initially be completed in two steps

Step 1:

Many of the components will be installed on the line including the engine, exhaust, steps, and other parts to accommodate the interface with ESI components.

Step 2:

The diesel powered truck will be driven to TSC where the natural gas interface will be done. All CNG Powered Trucks will be shipped from the plant with 2010 EPA/CARB certification.

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Future Offerings

• MaxxForce 10 CNG 350HP/1200 lbs-ft (in development)

• MaxxForce 7 CNG-development slotted for summer 2011

• Maxxforce 13-development slotted for late 2011/early 2012

• Expanded Chassis Options

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ESI Project Examples

MaxxForce DT (Model 326) New Truck

•City of Dallas, TX (24 new refuse and dump trucks)•City of Kansas City, MO (19 new water & sewer trucks)•Los Angeles County, CA (2 new sewer trucks)•Enbridge Gas Distribution, Ontario, Canada (3 new dump trucks)

DT-466E (Model 308 & 313) Repowers

•Tulsa, OK Public Schools (140 repowers, MY 2002-07)•Anheuser-Busch, Hunts Point, NY (22 repowers, MY 2003-07)•Monterey/Tulare, CA (3 dump truck repowers, MY1997-2002)

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Engine Warranty

Engine WarrantyESI is responsible for all engine warranty

This will be seamless to the customer. The dealership will handle service and will bill ESI directly.

Base Warranty2 Years/4,000 Hours/ 100,000 miles

(Full Parts & Labor)

Engine Emissions Warranty4,000 Hours or 100,000 miles

Extended Warranty Available

Labor Shop RatesSame as Navistar Warranty Hourly Rates

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Natural Gas Legislation

Middle Class Tax Relief Act HR 4853 (passed Dec 17, 2010)The Middle Class Tax Relief Act of 2010 was signed into law in December, and contains provisions representing significant continued investments in alternate fuels. Included in this legislation are:

Credit for Alternative fuel Vehicle Refueling Property (IRC, 30C): The bill also extends through 2011 the investment tax credit for refueling infrastructure that supports alternative fuels like ethanol, hydrogen, biodiesel and natural gas. It covers 30% of the cost of retrofitting an existing or building a new refueling station, or $30K whichever is less. For infrastructure built in 2009 or 2010, credit is 50% up to $50K.Alternative Fuel Tax Credit (Pub. L. No. 109-59, § 11113) The .$50/gallon tax credit for alternate fuels, such as natural gas and propane, was renewed and made retroactive to January 1, 2010. (This tax credit is for the seller of the alternative fuel, but in the case of a tax exempt entity, if they own their own fueling infrastructure, they may be eligible to receive these funds in the form of a rebate.)

Not Included in this legislation:

Alternative Fuel Motor Vehicle Credit (IRC 30B(e)): Unfortunately these tax credits, up to $32K for alternative fuel vehicle purchases and conversions, which expired Dec 31st 2010, were not included in the legislation.

But this is not the end of the story. Several other Bills before the 111th Congress, which included extending and increasing the Federal Tax credits for Natural Gas Vehicles can be reintroduced to the 112th Congress.

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Petroleum Displacement

Making America less dependent on foreign oil is a national priority. President Obama, in accepting his party’s nomination, established his own clear

goals:

“For the sake of our economy, our security and the future of our planet, I will set a clear goal as president: in 10 years, we will finally end our dependence on oil from the Middle East”.

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More information….

• Bills to watch:

• New Alternative Transportation to Give Americans Solutions Act. (NAT GAS ACT) HR 1835/S 1408 (bipartisan support, vote possible before summer break)

• Natural Gas and Electric Vehicles Act. S 3815• Fueling America Act S1350• American Power Act

• For more information on this and other legislation regarding Natural Gas, see the NGVAmerica website: http://www.ngvc.org/incentives/federalTax.html

• For funding opportunities in your area you can also visit the MRC:• http://navistar.saepio.com/ams/viewProductOverviewAction.do?pID=16903&cID=2850• For the latest information on funding, alt fuel station locations, regulations, etc,

specific to your state, check out the Alternative Fuel Data Center website: http://www.afdc.energy.gov/afdc/laws/

6/6/2011