FedEx Express Introduces Hybrid Electric Truck

FedEx Express, a subsidiary of FedEx Corp. (NYSE: FDX), in concert with Environmental Defense and Eaton Corporation (NYSE: ETN), introduced a low-emission, hybrid electric powered delivery vehicle that could become a standard medium-duty delivery truck for the FedEx Express fleet. The FedEx OptiFleet E700 hybrid electric vehicle will decrease particulate emissions by 90 percent, reduce smog-causing emissions by 75 percent and increase fuel efficiency by 50 percent.

"FedEx Express is proud to be the first company to make a long-term market commitment to develop and utilize hybrid electric delivery trucks,"said David J. Bronczek, president, FedEx Express. "This hybrid electric truck demonstrates that technology is available now to begin to achieve environmental goals and meet our operational requirements. The environmental and business gains of this project signal a revolution in truck technology and set a new standard for the industry."

"With this project, FedEx enhances its role as an environmental leader in the business community,"said Fred Krupp, president, Environmental Defense. "Working together with Environmental Defense, FedEx has developed a truck that will deliver cleaner and healthier air, reduce oil dependency, and reduce climate change impacts. Environmental Defense now challenges other companies to step up to the plate and meet the green standard set by FedEx."

Eaton Corporation was the company selected to produce the hybrid electric powertrain for FedEx Express. FedEx Express has agreed to purchase 20 hybrid electric diesel delivery trucks using Eaton's innovative hybrid electric technology. Later this year and into early 2004, these 20 vehicles will begin operation in four yet-to-be-named U.S. cities. These hybrid electric vehicles will endure real-world FedEx operating conditions to verify and prove their viability in commercial applications.

As the trucks succeed in meeting project goals, FedEx OptiFleet E700 hybrid electric trucks will be placed in the company's pick up and delivery fleet as early as Fall 2004. FedEx Express expects to purchase hybrid electric vehicles on the company's normal purchasing schedule for routes in the U.S. and Canada, where medium-sized delivery trucks are used. This program has the potential to replace the company's 30,000 medium duty trucks over the next 10 years.

"Eaton is pleased to make this innovative, environmentally advanced technology available to FedEx Express and Environmental Defense for this ground-breaking project,"said Jim Sweetnam, senior vice president and group executive, Eaton Corporation, Truck Group. "We are proud of the achievements to date, and we look forward to working with our colleagues to prove out the economic and environmental benefits of this technology. Our team will continue to work closely with FedEx Express and Environmental Defense as we take this innovative project to the next level. With expanded industry use and needed government support through tax incentives in this stage of commercial development and necessary industry adoption, we believe this technology can be brought rapidly to market."

Power of Innovation Produces New Vehicle

The unveiling of the hybrid electric truck comes in the third year of a four-year project between FedEx Express and Environmental Defense to create a delivery truck that will dramatically decrease emissions and fuel use. While the two organizations began working together in 2000, manufacturers were invited in 2001 to submit proposals to design and develop an environmentally progressive commercial delivery vehicle. Through a competitive process, Eaton Corporation was selected from more than 20 manufacturers who expressed interest. Since the beginning of the project, progress toward goals has been assessed against the 1999 FedEx Express W700 standard delivery vehicle, which represents the most common model in the FedEx Express fleet.

Eaton's Innovative Technology Produces Hybrid Electric Powertrain

Eaton's hybrid-electric powertrain effectively combines a diesel engine and electric motor to drive the vehicle. A computer determines the most efficient combination, depending on current operating conditions and driver demand. A four-cylinder engine replaces the six-cylinder version currently used in the FedEx Express W700 delivery vehicle. The engine size is reduced because of the added power provided by the electric motor. A particulate trap has been added to the truck to further reduce emissions.

Lithium-ion batteries capture and store energy during the "regenerative braking" phase of the vehicle's operation, providing a source of stored electric power for the motor during future acceleration. Therefore, all electrical charging of the battery is provided by the hybrid electric powertrain, and no external electrical infrastructure, such as a power cord or electrical outlet, is needed. This balance between conventional and electric technology is an innovative method to improve environmental performance and decrease fuel use while eliminating the need for high electrical-demand infrastructure costs. The hybrid electric trucks operating characteristics will remain virtually unchanged from that of a conventionally powered FedEx Express vehicle.

Eaton's hybrid electric power train has been placed in the standard white FedEx Express W700 delivery truck, which utilizes a Freightliner chassis. The hybrid electric delivery vehicle will be differentiated from the standard FedEx Express delivery vehicle only by an OptiFleet brand decal on the sides and rear of the vehicle. The hybrid electric E700 has a gross vehicle weight of approximately 16,000 lbs. and a cargo capacity of approximately 670 cubic feet.

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