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Commercial fleet operating companies lead the electrification movement, pushing for innovative electric vehicle technology and solutions across geographic markets that passenger vehicles have yet to embrace. According to BNEF’s Electric Vehicle Outlook, electric fleet vehicle sales in 2021 will more than double those in 2020, generating substantial investment in battery pack hardware and complementary software like Electra’s EVE-Ai™ Controls and Fleet Analytics. What is it about fleet companies and the current market landscape that drives this trend in the EV industry? Here are the top three reasons why commercial fleets, rather than personal vehicles, are electrifying fastest.
1. Climate Policy Alignment
Over the past decade, governments around the world have begun to implement stricter emissions regulations in an effort to curb Climate Change. Many of these actions are targeted at the businesses that operate commercial fleets, which accounted for 50% of U.S. transportation emissions in 2019. This year, President Biden’s 2021 “Buy American” executive order promises to replace the federal government’s fleet of roughly 650,000 vehicles with EVs assembled in the United States. Similarly, state and city officials are prioritizing emissions guidelines and mandates. California Governor Gavin Newsome issued Executive Order N-79-20 in September 2020, mandating 100% of in-state sales of new passenger vehicles be zero-emissions by 2035, and all operations of medium- and heavy-duty vehicles be 100% zero emissions by 2045. Mandates and guidelines such as these are catalysts to the fleet electrification movement.
That being said, going electric is not an overnight project, but rather a coordinated effort in which an operator must strategically select top performing vehicles, charging infrastructure, and management software. Innovative fleet operators see today's optional electrification trend as a future requirement, and are looking to remain ahead of the policy curve. As an added benefit, fleet operators are simultaneously improving their brand’s appearance by employing a sustainable brand strategy to appease an increasingly sustainable public.
2. Long-term financial savings
Fleets who electrify early will reap future savings. According to Automotive World, “EV first movers have already experienced savings of between 20% and 25% over traditional internal combustion engine (ICE) vehicles.” The cost to fuel a plug-in EV is significantly lower than the cost of gasoline or diesel, especially in a well managed fleet that employs a charging strategy based on daily energy costs. What’s more is EVs require less maintenance than gas-powered engines thanks to fewer liquids (like engine oil), fewer moving parts, and regenerative braking. In 2019, New York City’s Department of Citywide Administrative Services (DCAS) studied three sedan models (one BEV, one hybrid, and one gas) to understand operative savings. To compare, the all-electric Nissan Leaf’s total cost of operation (TCO) was $3,620.8 while the gas-powered Ford Fusion’s TCO was $4,592.3. For large electric vehicle fleets, these savings multiply and can be reallocated to other company goals.
3. Increased number of electric vehicle models and solutions
Leading OEMs are manufacturing and introducing new models of medium- to heavy-duty EVs each month. In spring 2021, Ford’s all electric F-150 entered the market with high expectations and GMC introduced an electric Hummer. Daimler, Volvo, Mitsubishi and Tesla are manufacturing vehicles ranging from Class 4 to Class 8 trucks. In addition to trucks, BYD and Lion Electric are manufacturing electric buses. Bloomberg NEF predicts that over 67% of the global bus fleet will be electric by 2040. With OEMs adding to their EV inventory and each model possessing their own trademarked attributes — Tesla’s semi boasts a range of 500 miles on a single charge—it’s no surprise demand is skyrocketing.
Addressing Challenges to Fleet Electrification
Despite an encouraging electric fleet market, fleet operators and passenger vehicle OEMs alike continue to face obstacles to electrification. For most heavy-duty truck operators, range remains the largest concern. While a big rig can have two 150-gallon tanks that provide a maximum range of 1,500 miles, the leading EV trucks can only drive a mere 600 miles per full charge. Factor in the lack of adequate charging infrastructure and required charging time (a couple hours for a full charge) and the comparison between ICEs and EVs becomes complicated.
Using the cutting edge Adaptive Cell Model based on advanced AI and ML methods, Electra’s EVE-Ai™ Adaptive Controls and EVE-Ai™ Fleet Analytics help fleet managers monitor and enhance their fleets’ battery pack performance. Collected data informs the continuously updating Adaptive Cell Model, thereby adapting EVE-Ai controls to the fleet’s unique characteristics for decisions that prioritize battery pack health. Our Predictive Analytics tool notifies fleet managers of forthcoming battery failure, protecting both the vehicle and driver from roadside breakdowns. EVE-Ai technology facilitates safe fast charging; real-time state of health (SOH), state of charge (SOC), and performance analytics; and accurate failure predictions. As a result, Electra’s software helps fleets minimize environmental impact, maximize ROI, and improve driver safety.
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