In a seeming mindset tipping point on the future of electrification, electric vehicle (EV) sales have soared globally. From 2019 to 2021 the sales numbers quadrupled. Worldwide, a 75% increase in 2022 over 2021 shows EV transition is going strong.
Benefits of electric vehicles
In the long run, electric vehicles will have a lower total cost of ownership (TCO). But the initial purchase costs still outweigh the attraction for buyers compared to cheaper internal combustion engine cars (ICEs). While the EV purchase price can be significantly higher, the actual individual cost comparisons (aside from batteries) are rather surprising.
What makes EVs more expensive?
- Batteries are the main driver for higher costs in EVs.
- EV depreciation & interest rates are higher than ICEs due to a higher purchase price.
- Tires must be replaced more often with EVs due to more weight and torque which accelerates wear & tear.
What are the TCO advantages of EVs?
- EV maintenance is less frequent and cheaper as there are fewer moving parts.
- Electrical power is cheaper (upt to 50%) than gasoline.
- Taxes for EVs can be lower than ICEs due to government incentives.
- Many countries offer subsidies for EV purchases.
So, in the long run scenario, an electric vehicle that has a longer lease-life and racks up a lot of mileage continues to make TCO more attractive than an ICE vehicle.
And this is especially important for commercial fleets.
Companies running transport fleets (e.g. last-mile delivery) need to maintain uninterrupted business operations and utilize their vehicle assets to the maximum. They also want to make any structural changes as cost effective as possible. Simply purchasing electric vehicles & chargers and putting them on routes without a strategy will disrupt all of the above.
Fleet electrification should happen in increments. That means any fleet will be running mixed EV & ICE fleets for a while. During that time, a company learns how to run & charge EVs without hurting operations. It also allows for planned purchasing in line with current vehicle-life durations or leasing contracts.
To know which vehicles to electrify when, analysis of current fleet vehicles, routes, ranges, standing times and electrical infrastructure is paramount.
Most transport fleets are depot-based. So which depot will it be? What is its electrical grid capacity and energy output? Is the company running last-mile or mid-mile delivery? If so, what kind of ranges are they covering, in how many shifts? Is operational vehicle & routing data available, like telematics? If not, do they have historical data?
And again, how much and how cost-effective is the total cost of ownership (TCO)?
No wonder that many fleet managers are unwilling to take on such complexity.
Vehicle & Infrastructure Selection
There is no doubt that most companies are entering completely new territory when they plan their e-fleet transition. Many start by formulating an e-car policy to set out the general goals and framework for such a change. Doing so helps clarify which EV models can be chosen, charging costs and locations, or what happens if an employee resigns. Within such a framework, requirements planning can begin, balancing tasks and solutions.
The key questions to be answered here
- What are the tasks of the e-fleet?
- Which ranges are necessary?
- Which delivery times should be realized?
These requirements are compared to the existing options:
- Configuration options of EVs available on the market.
- Total Cost of Ownership (TCO) estimates, including tax aspects and subsidies.
Involving internal and external stakeholders — like logistics, facility management, purchasing, drivers, etc. — at an early stage, is sound advice.
Setting up the corresponding charging infrastructure is equally essential. Five key areas are important here:
- How many charging points does the company need and what performance do they have to offer?
- What should load management look like?
- What are the costs for installing and operating these charging points?
- Should there be charging points for employees at home (charging@home)?
- How is charging outside the company billed?
Again, early-stage stakeholder involvement (like electricity providers, hardware vendors, installation experts) is advisable.
Pillars of Fleet Transition
Whatever the case, the nature and complexity of these tasks makes careful planning of fleet transition more than advisable. The proverbial “jump into the deep end” is a risk better not taken. Therefore, the pillars of fleet transition are fleet analysis, infrastructure analysis & guidance.
The fleet analysis considers a fleet’s electrification potential based on historical data and telematics data. With a software, users collect relevant data on the current vehicles and create an analysis of the electrification potential of a fleet. Based on this analysis, fleet operators can identify carbon dioxide (CO2) reduction potential and receive recommendations for suitable EV replacements that best meet their specific requirements.
The infrastructure analysis is the basis for an optimal e-fleet charging infrastructure. It considers the necessary number of charging stations and their optimal locations, suitable manufacturers and models and finally the charging and load management — including a feasibility check with an electrician. It also takes the integration of charging options for employees at home and public charging options into account. The specific charging management is then carried out with a dedicated Charge Management software. It should be optimized for business continuity and costs, and charging schedules need to be integrated into day-to-day operations.
The third conceptual pillar is guidance on the electrification journey. This allows for specific tailor-made solutions for a fleet’s individual needs and requirements. It also includes basic e-mobility training to make relevant knowledge available to all internal stakeholders. Other topics include educating on subsidies and tax breaks.
Overall, a strategic electrification plan is a smart, sustainable and worthwhile (but not trivial) undertaking. Early planning, the availability of all relevant information and a realistic view of budgeting and costs are crucial.