To hit 2030 climate targets, we in Europe need to cut 64% of transport emissions, according to EY analysis. That’s a really, really big amount. Convincing private drivers to go electric is a good start, but to fully decarbonize; we need commercial electrification too. This article cooks the business case for ‘going electric’, and its inherent challenges.
A fleeting trend?
Fleet is a word with many meanings. (In my head, it triggers an enjoyable sight of starships gliding through space.) But many services can operate fleets, and many fleets can be electrified. These include public buses, company cars, rental cars, ride-hailing or car-sharing vehicles like Uber or Zipcar, traditional rental cars, light to heavy trucks, and even driverless commercial cars.
But while the potential is wide, only commercial fleets with tight, predictable routes like buses, inner-city delivery, and postal vehicles are currently electrifying. My favorite among them is the electric milk float, which, as laughably antiquated as they may seem, have run on batteries since the 1940s!
On the right side of electrification
Like automation, electrification is a tectonic market force. Two thirds of all road vehicles will be electric by 2050—a result of technological progress, falling material costs, and lavish funding. At the same time, fossil fuel industries suffer systemic discrimination, such as in the UK, where sales of new ICE cars are banned after 2030. This trend will only continue. So going green isn’t just an ecological decision; it also future-proofs the business.
Most carmakers are jostling for a piece of this new pie — or at the very least to not fall behind. So while EVs may have captured public attention with high-end, futuristic designs (ahem, Tesla), the market today is popping with hundreds of models for every use case and price point. For businesses, this means greater options for electrification.
It’s also great PR. Going electric is a physical commitment to the climate, and shows real social responsibility. It’s getting harder to justify an entire fleet of gas-burning vehicles, especially as the public grows more environmental. So electrifying is a big gesture, which can help to recalibrate brand values and even conjure a competitive advantage.
But electrification is dependent on charging infrastructure. Five years ago, a boardroom suggestion to electrify the entire fleet would have raised eyebrows. And understandably, too—there weren’t many charging solutions back then, and e-mobility culture was thinner. Today, however, charge stations amply decorate the roads of many countries and US states, and in places like the UK, even outnumber gas stations!
And where charging is patchy, one rising solution for commercial fleets is to create their own infrastructure. ‘Depot charging’ means letting vehicles slowly refuel overnight at low-power (thus cost-effective) chargers in the depot. This lessens the need for external fueling, and dodges the costs of faster, ‘opportunity charging’.
We’ve discussed how EVs’ cheaper fueling and reduced maintenance saves money for private owners. On a commercial scale, these benefits multiply according to the size of the fleet, meaning companies can expect dramatic savings on TCO. Dutch experts LeasePlan calculate fuel and maintenance as 26% and 10% of gas fleet costs, respectively. Both of these can be hammered by switching to electric vehicles.
On top of this, many governments offer juicy incentives to grease electrification. In the UK, grants cover up to £4,500 ($6,234) of an EV’s cost, and up to £500 ($693) of charge point installation. Similar packages exist in other countries, many of which also offer tax breaks to electrified businesses.
Finally, electric fleets can save on traffic zoning. In London, for example, EVs are considered low-emission vehicles, and thus exempt from the capital’s hefty congestion charge. And across many states and provinces in North America, EVs are allowed to use HOV (carpool) lanes, even if driving solo!
Not a straight road
Switching to e-mobility, even today, still presents challenges. Many of these are the sharp edges of benefits listed earlier. For example, while ownership savings from EVs multiply, so does the higher purchase price—which, depending on the fleet size, can create a formidable investment hurdle. And because of ever-changing rules, fleet managers must keep abreast of new schemes, tax incentives, and rebates that will directly concern them as an electric business. While this may suit younger and globally-tilted companies, it may also alienate those with stiffer, older or more local leadership.
Other challenges reflect general problems in the EV industry. Electric fleets will be subject to battery range and all of its associated variables (weather, temperature, road conditions, etc.) Charging, while coming a long way, may still be uneven or unintegrated between countries and states. This is critical: A Ceres/CTA report stressed the importance of predictable and minimal charge times, stating reliability as the deciding factor on making the switch. Fleet managers must also adjust to broader challenges with electric fueling; dealing with power outages, or working with property owners to build charging infrastructure for their vehicles.
Routing: a guiding hand
Chargetrip plays a proud ancillary role in fleet electrification. Our accurate EV routing defeats three old enemies: range/charge anxiety, unpredictability and unreliability. In the metrical maelstrom that is logistics, we keep business operations lubed and predictable.
We also amplify the cost benefits of EVs, by displaying where energy prices are lowest. Our internal analysis shows this chops fuel costs by 30–40%. And using charge station data isn’t just good for companies, but overall charge infrastructure too: Chargetrip distributes traffic to prevent grid overloading. We’re happy to do our bit. It’s nice to be part of a wider industry trend, especially when that trend is fighting for greener streets.