NGVAmerica / Clean Vehicle Education Foundation The North American NGV Market Snapshot of Market Metrics, Recent Trends, Future Outlook NGVAmerica / Clean Vehicle Education Foundation

Crude oil price drops 50+% in 6 months Peaked in June ‘14 @ $101 (WTI)/ $111 (Brent); “Bottomed out” in late Jan 2015 @ ~$45/bbl Supply outpacing demand = glut Economic stagnation in Europe, China growth < expected US oil production > than projected OPEC unable/unwilling to curtail output 65% of total output is outside of OPEC control

2014 US avg gasoline retail price peaked at ~$3 2014 US avg gasoline retail price peaked at ~$3.70 (April); dropped to $2.04 (1/26/15) and up since; EIA STEO projects 2015 avg. of $2.33 and 2016 avg. of $2.73 2014 US avg. diesel retail prices peaked at $4.02 in March; dropped to $2.83 and are expected to stay there much of 2015; 2016 avg. is projected at $3.24.

2014 oil consumption: 92MM bbl/day Projected increase of 1 million bbl/day in 2015 and again in 2016. Current US production is 9.2MM bbl/day and could rise but current pricing is pressuring US producers; rig counts are down (the intended consequence?).

Current pricing is not sustainable for many oil producing nations. Budgetary curtailments and austerity measures could lead to unrest in already unstable countries/regions.

Think Long Term Oil has tanked before… but always returns to “normal Think Long Term Oil has tanked before… but always returns to “normal.” Fleets are relatively long-term asset (5-10 yrs). What does the future hold? US EIA projects inventory surpluses to slow by 4Q 2015; WTI crude to rise to ~$64/bbl for 2015 average of $55/bbl and 2016 average of $71/bbl (Brent ~$3-4 higher) Supply disruptions could change this forecast QUICKLY!

Natural gas production has risen and prices have dropped fairly significantly in past year. 2014 Production: 77Bcf/d (projected to increase in ’15 and ’16) 2014 avg: $4.39/MMBtu Currently: $2.60-2.80/MMBtu ($.35/GGE gas commodity cost) 2015 projected avg: $3.05/MMBtu US DOE EIA Short Term Energy Outlook (STEO) – February 2015

Even at today’s oil price, natural gas still enjoys ~3:1 advantage/MMBtu. “Equivalent Barrel” price of natural gas is ~$17-18 While fuel savings are temporarily diminished, they are still significant.

The Continued Compelling Case for NGVs Abundant domestic supplies of natural gas Relatively predictable, stable natural gas pricing (less volatility, less uncertainty) Significant savings over both diesel and gasoline Solid, reliable performance Growing infrastructure

Snapshot of US NGV Market Today Existing NGV inventory: ~153K (as of December 31 2014) ~39,500 HDVs 11,300 buses 5,700 school bus 8,800+ refuse 8,700 ports/regional haul 5,000 muni/F&B/Misc local ~87,000 LDVs (fleet and consumer) Cars/SUVs, p.u. trucks/vans ~25,800 MDVs 9,650 gov’t 3,200 pkg del., textiles, bakery 3,500 airport/university/ community shuttle 9,550 utilities, comm. services, household goods, const., misc Annual vehicular natural gas use: 500+ million GGEs 1539 CNG stations; 105 LNG Stations (+55 more ready to open)

Multiple Stakeholders Are Engaging NGV Fueling Infrastructure Development Local gas distribution cos. (LDCs) Natural gas retail fuel sellers Gas exploration & production cos. Leasing companies Customers “Traditional” fuel retailers C-Stores Truck Stops Grocery/Warehouse stores

Recent Vehicle Inventory Trends 2012: ~17,450 “new” NGVs hit the road ~10.7K LDVs (Class 1-2b – OEMs and SVMs) ~1.3K MDVs (Class 3-6 – all SVM retrofits) ~5.5K HDVs (Class 7-8 – OEMs and SVMs) Attrition estimate: 7-9,000 vehicles Transit buses deployed in 1998-2001 (FTA: 12 yr life/500K miles) Earliest refuse trucks likely scrapped after “2nd-3rd life” (1st WM units) Large inventory of old LDVs (“EPACT vehicles,” early OEM models)

Recent Vehicle Inventory Trends 2013: 19,200+ “new” NGVs hit the road* 10,150 LDVs (Class 1-2b) ~5700 OEM vehicles (Honda, Chrysler and GM) ~4450 SVM conversions/retrofits ~2,175 MDVs (Class 3-6 – all SVM retrofits) Mix of shuttles, cab-chassis “utility” vehicles, step vans, COEs ~6,700 HDVs (Class 7-8) Moderate/good growth in CWI 8.9L sales for refuse, transit; good but limited fit for hauling apps; some migration to 11.9L CWI 11.9L enters mid-year @ limited production; 3rd-4thQ market roll- out is solid. Westport 15L ISXG HPDI exited in 11/2013 Projected “boom” in dual fuel systems doesn’t materialize Attrition estimate: 7,500 vehicles * Net increase = ~12,100

Recent Vehicle Inventory Trends 2014: ~18,000 “new” NGVs hit the road* 6,650 LDVs (Class 1-2b) E&P sector orders off dramatically; Utility orders down compared with 2012-13 Gasoline-Natural Gas pricing = inverse economics ~2,700 MDVs (Class 3-6 – all SVM retrofits) 20+% growth; shuttles, cab-chassis “utility” vehicles, step vans, COEs ~8,700 HDVs (Class 7-8) Continued growth of 8.9L sales; refuse, several large transits 1st full year of 11.9L; sales < projected (mfg backlogs, long delivery times, and NG premium in a “hot” trucking market; plus impact of oil $) Good growth in dual fuel systems sales; still relatively low #s Attrition estimate: 7 ,000 vehicles * Net increase = ~11,000

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