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What fleet managers need to know now to anticipate and manage an EV fleet transition

Posted December 2, 2021

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As more fleet managers move to a mixed or hybrid fleet of internal combustion engine (ICE) and electric vehicles (EVs), charging will become an increasingly important business process. With this transition comes the need for fleets of any size to collect, consolidate and analyze data generated by all vehicles across a mixed fleet. Fleet managers of both large and small fleets worldwide are looking to balance the desire to demonstrate their company’s commitment to sustainability, while cost-efficiently managing a high-performance fleet. This article outlines several important actions fleet managers can take to help ensure a successful transition from ICE-only to a mixed fleet with electric vehicles. 

Fleet EV adoption is still in the early stages, but change is coming

While most fleets in the US are in the early stages of introducing EVs, more widespread EV adoption over the next 10-20 years by consumers, businesses, and automakers is being nudged along by regulatory announcements from various agencies around the globe. 

“This is new territory for many fleet managers, but also an incredible opportunity to build on existing practices to incorporate new solutions and operating models,” says Hannah Young, Director of Global Fleet Strategy at WEX. “Fleet managers must navigate a new, sometimes unfamiliar, ecosystem of technology to successfully transition to a mixed fleet. There are technical, cost, operational, and sustainability considerations that may involve new groups of internal stakeholders and different kinds of company goals.”

Fully battery-powered EVs still represent a small portion of overall vehicle purchases in the US today, comprising less than 2% market share of new vehicle sales in 2020. However, both consumer and commercial adoption of EVs is expected to continue to increase quickly in the coming years. “EVs provide many advantages over ICE vehicles,” says Rich Mohr, vice-president of fleet at ChargePoint, a WEX partner and leading electric vehicle (EV) charging network operating in North America and Europe. “They’re often cheaper to fuel and maintain, and can provide a better experience for drivers. More and more OEMs are delivering new EV models across all vehicle classes, making it possible for all types of fleets to transition to electric.”

Payment controls and analytics remain vital for mixed fleets

Today, fleet managers need tools that will allow drivers to charge at available and convenient stations, capture critical data and transaction information for these charges, and manage charging expenses on the same platform they use for fuel.  A fuel card solution and reporting platform that accommodates both types of fueling is key to easing the operational management of these emerging mixed fleets. In an effort to allow fleet managers to reduce their carbon footprint while meeting complex reporting and cost management needs, WEX has recently expanded our partnership with ChargePoint.

Moving forward, the growing popularity and accessibility of EVs is expected to bring change for businesses that use vehicles for daily work, as well as the transport industry overall. These changes will directly impact fleet managers as they gradually electrify their fleets, presenting them with new training, service management, and vehicle reliability challenges. Throughout the transition, core elements of payment controls and in-depth reporting and analytics will remain vital to streamline the administrative burden for fleet and charging expenditures. 

What fleet managers need to transition to EVs in a mixed fleet

In simple terms, fueling is fueling, whether gas, diesel, ethanol, electricity or some other fuel powers the vehicle. However, each of those fuels introduces complexities for tracking and operational planning, as well as total cost management. Drivers also must adapt to different fueling options and vehicle performance.  Mixing fuels in one fleet layers on further considerations.

Our clients across geographic regions and with varied-sized fleets have shared with us their concerns about driver adoption, vehicle selections, and the need for seamless direct integration of fuel and charging data in one system.  Fleet manager priorities include:

  • Integration of payment acceptance across both fuel stations and the various EV charging locations, from public charging stations to non-public locations such as at home, at work, and commercial or fleet depot sites
  • Centralized EV and fuel transaction billing and payment management, with aggregated reporting on fueling and charging activity, and comparable payment controls  
  • Consistent reporting to support compliance initiative tracking, fraud controls, and mitigation tools

“To get the most out of EVs, fleet managers need to have visibility, access, and control over all aspects of fueling, including EV charging,” says Rich of ChargePoint. “There are many ways to deliver these insights across the systems fleet managers already use.”

Three ways fleet managers can prepare now for mixed ICE and EV fleets

Agility and adaptability will serve fleet managers well through the anticipated various stages of transition to widespread EV adoption. 

“Luckily, the capabilities needed to future-proof your fleet for the shift to EV build on existing practices and systems already available,” Hannah says.  “Fleet managers who take advantage of fleet cards, reporting tools, and telematics to improve driver productivity and cost-efficiency of their fleet today are already equipped for what fleets of the future will require.”

Three ways fleet managers can prepare for mixed fleet management:

  1. Support drivers through the transition to hybrid and EV fleets
  2. Strengthen data analysis and reporting 
  3. Understand the variables in mixed fleet fueling costs

Support drivers through the transition to hybrid or EV fleets

Training drivers how to use the technology inside electric vehicles is key to maintaining safety and productivity. Some drivers may resist a change to EVs simply because they’ve never driven one.  Announcing carbon-neutral goals may excite some drivers, but new training is necessary to demystify the safety, regulatory rigor, and operating experience of EVs, especially compared to more familiar ICEs.  For example, EVs are quiet. This can offer a better experience for drivers but also raises safety concerns. Drivers may need to alert nearby pedestrians or bicyclists that the vehicle is there.  EV acceleration may also require new attention. Taking your foot off the accelerator in an ICE allows the vehicle to coast. The same action in an EV may result in a more aggressive slowing due to regenerative braking that helps recharge the vehicle’s battery.

Other vehicle differentiators may need fleet manager attention and require time to adapt. While EVs are likely to present long-term maintenance and lifecycle benefits due to the fewer moving parts in their engines, there may be other challenges related to vehicle care fleet managers need to consider. Not every repair technician will be familiar with these vehicles at the outset, so servicing EVs may require additional training or labor hours while the market adjusts to more mainstream use. EVs also introduce the complexity of battery management and care. Generally, the most expensive component of an EV, battery lifespans, and replacement cycles are a major driver for EV costs and represent opportunities for new types of vehicle use or charging guidance to maximize battery health. The right EV charging solution can optimize charging to promote battery longevity.

Fleet managers will also want to train drivers to understand parameters that are unique to EVs, like the battery payload level during cold or extreme weather, how vehicle dwell times can inform a smart charging strategy, monitoring battery charge levels during longer routes, and understanding how traffic patterns might impact vehicle range potential. These factors can vary widely between vehicle types, from passenger cars to box trucks to over-the-road trucks.

Strengthen data analysis for fleet productivity and efficiency

Data has long been a friend to fleet managers, helping to identify vehicle performance, driver behavior, and route optimization opportunities for greater productivity and cost-effectiveness.  Fleet managers are used to managing fluctuating fuel prices across geographies, as well as directing drivers on how and when to fuel up for the lowest cost. When managing a mixed fleet, battery charging time becomes a new factor in keeping drivers and vehicles on the road. 

“Fueling up” for an EV is not a five to ten-minute action. The time required to charge an EV can range from 20 to 30 minutes at high-powered DC charging stations to up to several hours with lower power AC Level 1 or Level 2 chargers, and can vary by the type and age of technologies in the vehicles and chargers themselves. As a result, fleet managers will need to actively factor dwell time into the schedule and into the total cost of fueling electric vehicles. Charge time data and charging costs will vary by vehicle and charging scenario. That’s why having at-home and in-depot options for charging -- along with a central data dashboard to keep track and anticipate future needs -- makes sense for both large and small fleets. 

Electricity costs can be highly variable, varying by location, rate structure, and even time of day. Electricity price is governed by more than 2,000 utilities across the United States, with another half-dozen or more major providers in each country in Europe. Each utility has its own tariff structure, time of use schedule, demand rate charges, and other practices that affect the cost. The result is that electric charges vary widely based on a lot of factors that fleets will need to better understand.

Fortunately, there is a good model in place for reference: Fuel price management. Fuel prices also vary -- sometimes by a dollar or two a gallon between brands and from one side of the street to the other. Fleet management tools like those from WEX help fleet managers track, report, and use data to encourage driver behavior in ways that optimize costs and ensure greater predictability. The same will happen for EV costs, but the first step is doing some scenario modeling and building a deep understanding of your own fleet operations and needs.

Many fleets are still early in the process of adopting electrification and are piloting and testing solutions and vehicles. Incorporating multiple “fuel sources” will require managing, tracking, and analyzing both fuel and electric consumption, as well as the aggregation of new types of KPIs and data. 

Some of the key requirements and pain points WEX has heard from customers to date include: 

  • The need to integrate and compare reporting and operational KPIs between ICE vehicles and EVs 
  • A desire to manage EVs with existing reporting and maintenance service solutions where possible
  • Maintaining secure, data-rich, and convenient methods of paying for fuel - whether it be diesel, gas, or electricity
  • Helping drivers identify and locate the recommended (or most cost-efficient) charging solutions
  • Maintaining back-office integrations and accounting reporting structures for aggregating expenses and billing

No matter what the mix of vehicles in your fleet, the goal remains: Keep drivers safe and vehicles on the road.

Understand the variables in mixed fleet fueling costs

When is the right time to move to a mixed fleet?  What are the capital expenses, vehicle and battery price implications, and charging vs fueling expenses associated with that change? Do you have the right information to calculate these new expenses?

Developing a comprehensive understanding of the true costs for fueling vehicles in a mixed fleet -- both charging and gas or diesel -- is an essential component to understanding the total cost of ownership analysis for operating a mixed fleet at scale. How you charge a vehicle matters a lot.  

  • The costs between charging overnight at an employee’s home vs. at a public station vs. at your own depot can vary widely. Costs at public stations may vary more widely than individual homes (although not always.) Fleet managers need to understand these various potential cost scenarios. What is the impact on your overall fueling costs if half your fleet is charged at home, and the other half on the road?  What about longer trips, where drivers charge at home only three times a week, and on the road the rest of the time?  An understanding of the different factors and likely behaviors is essential for making these costs more predictable.
  • While stopping for gas and coffee is usually a quick turnaround for drivers, having to pause for longer periods of time or overnight to charge an EV adds a new dimension to fleet management. Charge times may also add new types of costs like dwell time and scheduling gaps. Charging infrastructure and fleet schedules have to be designed to avoid situations where the entire fleet runs out of battery power at the same time, or where there are long queues for drivers to charge. Understanding and capitalizing on regular vehicle dwell times and locations and managing routes and charging infrastructure distribution will become key.

These factors and more mean that EVs present different operational requirements vs. ICE vehicles, and there may be a learning curve before fleet managers feel comfortable adopting EVs at scale. For example, working with facilities and utility vendor partners, retraining drivers, and managing vehicle maintenance are all new operational tasks that come with adding EVs to your fleet. Starting early and starting with pilots to best understand how EVs can work in your fleet is important to set broader-scale adoption of EVs up for success. 

Regulatory requirements boost the pace of EV adoption globally

In the US, President Biden announced a new national target that electric vehicles make up half of all new vehicle sales by 2030. California has taken an even more aggressive approach, mandating that vehicle sales in the state move to all electric by 2035 and announcing a number of incentives for fleet managers to make a switch. 

According to Hannah Goldsmith, the lead advisor in Zero Emission Vehicle Market Development at California Governor's Office of Business and Economic Development (GO-Biz), as reported in ChargedFleet this year, the California green fleet incentives include: 

  • Regulations to ensure electric vehicles are available for fleets 
  • Incentives to make the move to cleaner technologies more feasible 
  • Education/outreach activities to raise fleets’ awareness of the benefits of zero-emission vehicles and how to make the switch. 

The UK has banned the sale of new petrol and diesel vehicles in 2030, with hybrids to follow in 2035.  While some welcome this move, it will impact the automotive manufacturing industry across Europe, as well. 

A European Union plan seeks to mandate a 55% reduction in average new-car emissions by 2030 and a 100% reduction by 2035. AutoWeek reported in July 2021 that new car sales from 2035 onward would effectively be zero-emission under the proposed legislation. 

The good news for fleet managers around the world is that many of these new regulations include incentives. Many mixed fleet service providers, like WEX partner ChargePoint, can provide insights to help you take advantage of the various incentives and grants available to help reduce the costs of adopting EVs and infrastructure. Combined, these incentives could be significant for fleet managers. 

Much of the change to mixed fleets will draw on what fleet managers already know

Fleets are considering and implementing mixed fleet and EV solutions for a variety of reasons, such as supporting sustainability and carbon reduction targets, adopting new and cleaner technologies, and in some instances to lower operating costs  

While the new factors inherent in a mixed fleet strategy may feel additive to the fleet manager’s already full plate, the good news is that it is possible to adapt fleet management practices that most fleets already employ in support of this transition. The shift to a mixed fleet will require the same commitment to a safety-first culture and data-driven decision-making already prevalent in the fleet industry.  Partnerships with trusted providers will help fleet managers stay ahead of trends and develop the next-generation solutions that are right for their specific business needs and growth plans.

WEX provides customers with our trusted fleet industry expertise and a growing array of product and service upgrades to support their unique EV and mixed fleet needs. Learn more about how WEX supports mixed fleets of any mix of ICE and EV vehicles, as well as our complete fleet management solutions.

 

Resources:

ChargePoint

ChargedFleet:

California sets example for helping fleets move toward electric vehicles

Wireless charging could cut EV fleet costs in half

How to educate drivers on electric vehicle safety

AutoCar UK:

EV-ICE ban may have global impact

AutoWeek:

EU plans to phase out internal combustion cars by 2035

Forbes:

How electric vehicles are disrupting fleet management

 

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