Five Key Considerations for Fleet Electrification
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In the midst of looming regulations like Advanced Clean Fleets that will mandate fleets to implement zero-emission vehicles, fleet owners who have traditionally worried about operational bottom lines are now feeling the pressures and confusion that come with making the transition and may think that simply purchasing zero-emission vehicles for their fleets is progress enough to meet the mandate requirements.
The reality is, however, that many steps come before, during and after vehicle procurement, and that success is dependent on fleet owners doing things differently — and more quickly — than their peers.
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While every customer journey is different, reaching economic and operational parity requires operators to first think through five key considerations even before they place the first purchase order for those shiny new vehicles.
Consideration 1: The market
Before fleet owners even make the decision to embark on electrification, the first key is figuring out the right market that is appropriate in relation to their business priorities: Is your business looking to save money? Does your business have specific ESG goals in mind? Are you trying to do both? Having this focal point will shape the next steps, but firstly, companies must understand if there are regulations that will adversely affect the cost of their current fleet.
Davidson
For example, looming regulations such as the Environmental Protection Agency’s Phase 3 greenhouse gas program are increasing the costs of internal combustion engine vehicles and general compliance costs.
On the other hand, there might be incentives in a given market that allow fleet owners to slash costs — from specific vehicle incentives to low-carbon fuel standards and more — and stacking these different incentives can help fleets come out on top. Take California, for example, which has more than 150 related to alternative fuels and advanced vehicles — there’s a lot to take advantage of but it can be difficult to know where to start.
But it’s more than just financial considerations. Companies must also consider their fleet’s operating environment.
For instance, electric vehicles in geographies with moderate climates — where range isn’t impacted by extreme temperatures — perform the best, but regardless of where a business is located, there’s a critical need to do a 360-degree assessment so economic and operational priorities aren’t compromised.
Consideration 2: The technology
After a fleet owner has nailed their market dynamics, they must sort through conflicting technology options. From software considerations to telematics to charging infrastructure, there are a plethora of technology options available.
Whether delivering a critical service like oxygen to healthcare facilities or products to consumer stores, companies may feel the strain and uncertainty that attempting to integrate new technologies into their current operations can bring.
So, how can fleets manage the risks and complexities of integrating software and hardware without detracting from operational efficiency and core competency? Bearing in mind that procuring EV technology isn’t “one size fits all” — companies will derive different answers based on how they plan on using their vehicles or how they measure success for their business — the answer could change from six months to six years from now.
The wrong technology choices will have an immediate operational impact. Successfully integrating and operating EVs requires a systematic approach — just like how the quality of the sound from a stereo system is defined by the weakest link, one point of failure in an EV fleet’s service technology can derail its ability to execute daily.
Consideration 3: The facility
Full analysis of fleet facilities for EV readiness is also critical in the electrification journey because not every facility is well suited for electric vehicles. For example, if vehicles are parked far away from cost-effective power, then EVs will present more of a challenge at that particular location.
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Depending on a business’s fleet location, the available incentives will also differ. For example, utility companies like PG&E offer broad incentives depending on the type of facility. Or, a company might be operating out of a facility in a location that has more regulations. Certain geographies like Southern California, for example, are dealing with sweeping enforcement initiatives aimed at large warehouses to tackle air quality. Take, for example, the Warehouse Actions and Investments to Reduce Emissions (WAIRE) Program, which includes compliance and reporting requirements for warehouse owners and operators. Depending on the situation, there could be either less or more red tape, so it’s important to have a full grasp of how EV-ready their fleet facility is both from a layout perspective, as well as what incentives and mandates may exist based on their location.
Consideration 4: The route
With the above logistics nailed down, it’s time for fleet owners to think about routing — and ensuring that the team planning vehicle routes understands how to leverage the operational advantages of EVs.
Transitioning 100% of any fleet right away is rarely practical or realistic, and it’s also not always necessary. If a fleet owner has 40 vehicles at its site, for example, they are bound to still need several internal combustion engine vehicles to reach peak operational performance by analyzing the impacts of speed, distance and geography.
That’s why successful companies know they can’t just throw EV keys to their employees and expect them to figure out deployment. They also know operating teams typically aren’t resourced enough to figure out the optimal percentage of vehicles and routes that can be transitioned to electric today versus tomorrow. Failing to plan for the success of the driver experience could create longer-term internal barriers to future deployments.
Consideration 5: The training and continued education
That brings us to a final, key consideration: Education across the board is paramount to building confidence and empowering the next generation of workers across the transportation transition. Integrating EVs requires new mindsets and new approaches, which means education and training are paramount across all functions — from drivers to the CEO.
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And, even more importantly, fleet electrification is not just “one and done” — it’s a continuous feedback loop that needs to be monitored, maintained and optimized.
Many questions need to be asked throughout the training and education, such as, “Why did this driver have a bad experience and how can we change it?” or “Which drivers are the most efficient?” in order for the entire team to get the most out of the electrification era.
Thinking long-term to achieve true success
A systematic process and program are required to achieve true success with EVs, which requires core capabilities that are currently foreign to most fleets. In sum, it comes down to collaboration and finding the right partners to reduce the operational complexities and risks as they embrace the future of fleets. This allows fleets to future-proof their business without losing focus on their core business.
Scott Davidson is CEO of Revolv, a full-service provider of electric commercial fleet deployment, charging and integration.
