By Mike Nakrani, CEO at e-fleet solutions provider VEV
Despite the acceleration in fleet electrification, particularly in bus transport and logistics, it’s still an unknown endeavour for many businesses. As such, there are a number of preconceptions alive and kicking within the industry. Some are due to the understandable lack of knowledge and skills in running electric fleets and some are a result of general negative sentiment about EVs, driven by media reports in the consumer world.
To be clear, switching a fleet from diesel to electric is no mean feat. I believe we are going through an industry transformation much like the digital transformation of 20 to 30 years ago. And this one is also digital; implementing and running an EV fleet is absolutely driven by data insights derived from multiple data points using digital tools.
From power to chargers, routes, schedules, shift patterns, seasonality, weather and more, fleets will be using data inputs to manage fleet operations (there’ll be no more fuel cards and spreadsheets).
So it’s a big change. There are many considerations for fleet operators in the shift, and there are experienced partners that can help them do this.
Preconception 1: “Fleet electrification is too expensive and not cost-effective”
I can say with confidence that this is untrue. TCO (total cost of ownership) is lower for EVs than diesel in many use cases and reducing as technology evolves and vehicle range extends. Here’s how the business case for electric fleets stacks up.
Commercial EVs currently cost anything from 25% to 100% more than the equivalent diesel vehicle. These upfront capex costs need to be calculated as part of a total cost of ownership (TCO) model. EVs require less service and maintenance than diesel and there are other cost savings to be found in how EV fleets are operated. For example, energy costs can be reduced with solar power, battery storage and smart charging scheduling, driver training will extend vehicle range, detailed vehicle/route planning will ensure heavy batteries are not driven around unnecessarily.
EVs typically have a longer capital cycle than combustion-engine vehicles. For example, Kent County Council is electrifying its Fastrack bus rapid transport (BRT) for which the business case is underpinned by a 15-year contract with the bus operator, Go-Ahead. VEV is the lead contractor appointed to build, manage and maintain the specialist pantograph charging infrastructure.
A real-world example from our own data modelling on a 500+ van fleet showed that 47% of the fleet was ready to electrify, with a TCO saving of £2.6m.
Another consideration is the option of ‘electrification-as-a-service’ where the investment is shifted from capex to opex through a managed service over a suitable period of time.
Preconception 2: “Electric vehicles don’t have enough range for our operations”
Our modelling on real-life use cases shows that EVs have more-than-adequate range for many fleets and it’s possible to make operational changes to increase this. Our estimate is that most fleets have a large majority of their vehicles that could make the switch now.
Through a blend of operational adjustments, performance of an EV fleet can be optimised to keep vehicles on the road and costs down. For example, route and charging scheduling and assessing optimum battery capacity and weight for different journey-lengths are important factors. Also driver training – the prevailing statistic being that range can be increased by 20% with proper EV driving.
Like an Olympic cycling team, the performance of an EV fleet can be optimised through multiple marginal gains identified from robust data analysis. This underpins the fact that a digital-first approach to fleet electrification is critical.
Stage one is to make informed decisions about the transition based on basic data from the existing fleet – telematics, power and operations. By analysing data such as from power demand, charging timing, driver behaviour and route planning, realistic implementation plans can be shaped. The goal is to drive efficiency up, manage costs down and go at the right pace to suit the business’ sustainability goals.
For long-distance HGVs, we need to plan for when the technology and infrastructure is available. We are supporting the creation of ‘green corridors’, comprising shared charging hubs developed by commercial organisations for vehicles such as HGVs travelling across the country.
Preconception 3: “Electrification will overload our power supply and increase costs”
Power is a critical factor to be considered in the strategy and planning phase of electrification. It’s true that electrification will massively increase a fleet’s power demand, and you must plan ahead for a grid upgrade, which can involve lead times of up to three years.
What’s also true is that your power demand can be reduced with a robust energy strategy. This will include a micro-grid with solar power, battery storage and smart charging scheduling to reduce demand on the grid and the associated costs. We identify cost savings and reduced energy requirements in our planning and operations optimisation work for fleets.
Onsite solar power generation and battery storage solutions will provide cost-efficient, offgrid energy by harnessing sunlight during the day to deliver power and store the excess. Smart scheduling also involves storing power drawn from the grid at lower-tariff times to reduce costs.
Recent examples of energy analysis we’ve done include a fleet of 25 heavy goods vehicles with an intensive operating schedule. By modelling smart charging and real vehicle energy demand, this fleet’s grid connection requirements could be reduced by a factor of x2.3 which would save £150,000. Another was a fleet of more than 50 vehicles, where we modelled solar power and battery storage that would enable 30 vans to go electric when the grid connection would only support 11, helping the business electrify faster.
Sight-seeing bus company Tootbus recently announced its solar project that will power its existing electric fleet with 100% end-to-end renewable power, providing 65,000kWh of electricity annually or approximately 60,000km (37,280 miles) of travel per year once the full fleet has been converted to electric power. VEV developed this energy strategy and built the solar and charging infrastructure.
My message to fleets is that this is a choice between leading or following. The transition to electric fleets is underway, it is happening, and the question for businesses operating fleets is “when to start?”
As ever, early adopters will have a competitive advantage and become leaders from learning and acquiring the necessary new skills and knowledge to run an EV fleet. Those who are slower to make the shift, risk lagging behind and facing a future supply chain crunch which could wipe out any anticipated lower costs from the delay. Fleets therefore need to plan early to set themselves up for success and steer their own transition profitably.
Scale matters because the economics are more attractive when depots are fully electrified. Done well, you end up with lower power costs, significant pricing benefits, streamlined depots, lower maintenance costs and happier drivers and passengers.