What is Fleet Electrification?
In order to understand fleet electrification, let’s first take a look at electrification in general: Electrification is the process of replacing technologies that use fossil fuels (such as oil, coal and natural gas) with those that use electricity as an energy source. If zero-carbon, renewable resources are used to generate electricity, electrification can significantly reduce carbon dioxide emissions from the transportation, building and industrial sectors, which make up 65% of all US greenhouse gas (GHG) emissions. GHG emissions from transportation account for about 29% of total US GHG emissions.
Today, we are in the midst of a revolution to reduce emissions and mitigate the impact of climate change. Electrification of transportation is fueling the mobility and energy revolution, creating a booming market and an exciting future through innovation. In Q2 2022, EV sales accounted for 5.6% of the total market, an increase from 5.3% in Q1 and a record high. There are now almost 20 million passenger EVs on the road and more than 1.3 million commercial EVs, including buses, delivery vans and trucks. Some 699,708 new passenger plug-in electric cars were registered in May 2022, which is 55% more than a year ago. Analysts predict that about half of the cars on the road will be electric by 2050. Major car manufacturers such as BMW, Daimler and Honda anticipate EVs will make up between 50% to 100% of their sales in upcoming years.
How is Fleet Electrification Driving the Revolution?
Fleets are the lifeblood of the transportation industry. Fleet vehicles move everything from the food we eat to the clothes we wear. Whether it is light-duty delivery vehicles or heavy-duty trucks hauling large loads cross-country, fleet vehicles are essential to everyday life.
Fleet electrification is defined as the transition of fleet vehicles from internal combustion engines (ICE) to zero-emission electric vehicles (EV). Fleets can be comprised of passenger vehicles used as company cars, road transportation vehicles like buses, as well as delivery vans and heavy-duty trucks.
Fleet electrification is a critical element of the transition from ICE to EV vehicles. 15 million EVs are expected to be part of corporate fleets in the US by 2040. Fleets from ICE vehicles are responsible for close to 25% of total GHG emissions, so turning them into zero-emission vehicles will help meet national GHG goals. In Europe, more than 63 million fleet vehicles account for over 20% of all vehicles. This is more than 40% of total vehicle kilometers and half of total emissions from road transport.
According to the American Health Association’s March 2022 report “Zeroing in on Healthy Air,” the electrification of transportation would save about $72 billion in health-related benefits and avoid more than 6,000 premature deaths by 2050.
An unprecedented combination of sustainability goals, cost savings and government regulations make NOW the time for fleets to electrify. Utilities and governments are accelerating this revolution by investing billions of dollars to help fleets electrify and offering incentives such as tax benefits and subsidies.
Electrifying fleets deliver many key business benefits:
- Lower total cost of ownership through reduced maintenance, fuel and operational costs
- Significant environmental impact, by meeting national regulations and ‘green’ policies to reduce our carbon footprint
- Supports corporate commitments to sustainability and environmental responsibility, which will ultimately increase companies’ brand positioning and customer loyalty.
What are the Challenges of Fleet Electrification?
The journey to seamless, efficient fleet electrification presents significant challenges:
1. Need for Business Continuity
To maximize the benefits of fleet electrification, it is essential that electric vehicles are charged and ready on time. Charging must be seamlessly integrated into the vehicle’s journey to avoid business interruptions and maximize fleet utilization.
2. Unstable Charging Environment
A stable charging environment is crucial to avoid disruptions in the charging experience and fleet operations. The availability and stability of EV chargers is critical. Fleet managers need tools to continuously monitor and control the chargers, enabling them to easily identify issues in real-time and be able to respond quickly, or even better, have the system proactively repair the issues automatically.
3. Limited Energy
As the global demand for EV charging grows, there are energy capacity limitations. Fleet managers cannot assume that the power they need will be available where and when they need it.
4. Need to Minimize Energy Costs
In addition to energy availability, the cost of energy depends on the time of day. When demand is high, the energy comes at a higher price. Fleet managers and facility managers need tools that will enable them to optimize energy consumption while minimizing energy costs.
What is The Road to Successful Fleet Electrification?
The drive toward fleet electrification is no longer just a futuristic figment of our fertile imaginations. The EV sector is at the tipping point, and all major stakeholders are on board.
An EV fleet management solution is key to successful fleet electrification. It enables integration of charging into a seamless vehicle journey, provides complete control and a stable charging environment, optimizes energy management and maximizes fleet utilization.
EV fleets that are always charged on time and ready to roll bring confidence and peace of mind to fleet managers and drivers. As EV fleets and charging networks continue to grow rapidly, fleet managers and facility managers can optimize their charging operations and energy management and contribute to an emissions-free transportation future.