As the environmental crisis begins to affect people and societies globally, with more than half of Americans saying that they’d experienced extreme weather over the course of 2021, governments, organizations, businesses, and individuals are shifting slowly towards addressing the problem. In the US, the Biden administration passed the Inflation Reduction Act in August, legislation which contains $370 billion in climate and clean-energy programs. A portion of this funding will go towards electric vehicle (EV) adoption. With states like California taking decisive action toward EV adoption – they have banned the sale of new gas-powered cards by 2035 – we may be shifting toward an all-EV future.
As Transportation Secretary Pete Buttigieg said in a public address earlier this week, “America led the original automotive revolution in the last century, and ... we’re poised to lead in the 21st century with electric vehicles.” Have you considered converting your fleet to EVs? As the tide turns toward electric cars, trucks, plows, tractors, and more, you need to ensure that you are prepared for the challenges of the transition, as well as the growing advantages to EV conversion.
Climate politics has reached an inflection point and EV adoption is one facet of that movement
As Washington Post’s Karla Adam and Reis Thebault report, the electorate started to vote with climate policy in mind and the Green Party answered that call. The 2015 UN Climate Summit in Paris provided a pivotal moment and marks the start of increasing momentum around change. The increase in harsher weather impacts - drought, stronger storm systems, increasingly damaging hurricanes, greater prevalence of wildfires - began to affect communities globally, casting a wider shadow over our sense of what the future might hold.
For fleet managers, a cultural push both externally and within an organization will go a long way toward helping you create a more sustainable power source for your fleet business. Car and Driver Magazine’s Sebastian Blanco reported that in the first quarter of 2022 there was a 60% rise in new electric vehicle registrations in the US.
Many nations are ahead of the US when it comes to EV. In Norway, over 86% of all vehicle sales in March of 2022 were electric. New York Times’s Daisuke Wakabayashi and Claire Fu reported that more than 300 Chinese companies are making EVs, and in Q3 of 2022, a quarter of all new cars purchased in China were all-electric or Hybrid. While currently behind other nations on EV adoption, the US is gaining traction and the incremental pace at which we were moving toward EV will significantly change as the Inflation Reduction Act takes hold. Political and social norms are shifting too. Sustainable practices are increasingly considered an essential aspect of owning and operating a business. Converting to EVs can help modernize your business and keep you ahead of the curve.
Fleet management is on the brink of huge change
Seventy-three percent of fleet operators plan to transition their fleet to electric, hybrid, and hydrogen cell vehicles within five years. A recently published white paper by IHS Markit projects that 25–30% of new car sales will be electric by 2030. The white paper goes on to report that 40–45% will be electric by 2035, and Reuters estimates that by 2050 more than half of the vehicles on U.S. roads could be EVs. Changes to the way we conceptualize mobility are happening worldwide. Your business can join in that change and strategize to make that change happen in the most efficient and advantageous way possible for your fleet.
Fossil fuels are being phased out and electric and hybrid vehicles are being phased in
While the world has run on fossil fuels for years, we all know that this method of powering our world is not sustainable. According to a recent study, fleet managers globally are adopting plans to convert to hybrid and electric vehicles incrementally. For those surveyed, they’ll be starting to transition to EVs in the coming year with an 8-14% initial switch to more sustainable mobility options for their fleets. The move to a more sustainably mobile future is underway.
Light-duty vehicles are already primed for EV, while medium- and heavy-duty fleets are taking up the rear
Fleets made up of predominantly light-duty vehicles can transition to EVs without too much difficulty. Those businesses sporting medium- and heavy-duty vehicles have been waiting in the wings for the technology to catch up, and according to Aarian Marshall’s August 2022 reporting in WIRED, they may not have long to wait. Marshall shares that “Medium- and heavy-duty trucks alone—that is, weighing between 19,500 and 60,000 pounds—account for 7% of the country’s total greenhouse gas emissions annually, according to the US Environmental Protection Agency.” Additionally, with the shift to work-from-home, that number could just continue to get worse as more folks are working out of their homes and ordering everything they need online - which means they’re receiving their goods by mid- and heavy-duty vehicles. Marshall reports that this could mean 36% more delivery vehicles in the world’s largest cities by 2030.
The biggest pain point for companies to introduce medium- and heavy-duty EVs into their fleets is the cost differential. Biden’s infrastructure bill transforms the financial analysis by providing monetary incentives that will reduce the cost of EVs, making the cost of operating EVs and the cost of operating traditional vehicles much more on a par with each other. By incentivizing fleet managers to transition to EVs, legislators hope to “supercharge” the construction of these types of EVs and drive more research and development (R&D) dollars towards building more affordable medium-duty and heavy-duty solutions as a result. The bill is already transforming the industry. Marshall writes, “The Rocky Mountain Institute, a sustainability research organization, estimates that the new law could help urban, regional, and long-haul trucks hit 'price parity' with their diesel counterparts years earlier than planned.”
Workplace and at home charging will provide key opportunities to develop a streamlined system for your business
As you develop your conversion plan to a mixed hybrid/EV fleet or an all-EV fleet, you’ll want to take into account how your fleet will be charged. The options are: leaving vehicles at a homebase such as an office, lot, or company garage to charge every night, setting your drivers up with at-home charging stations, or relying on public charging stations. The two most commonly-used charging options today are workplace and at-home charging stations.
The electricity usage required to power EVs will require a game plan. How will you reimburse your fleet drivers for their at-home use? How is your building constructed and can it handle the additional wattage that a block of depots will require? Do you have a relationship with local energy utilities to have them weigh in on your plan? A lot of these questions will be easier to answer once you partner with a fleet provider who offers charging as part of their plan. Regardless of which method of charging you choose, you will want a fleet provider that offers you an agnostic solution that can provide you data on fueling an ICE fleet, a hybrid fleet, and an EV fleet, and any combination thereof.
A need to build out our public charging infrastructure
Although, workplace and home can serve as a natural base for charging your fleet, EVs will also need to be charged on the road. Eighty-three percent of respondents to a recent study - current EV drivers - reported that they will need to charge on the road some of the time. In that same study respondents stated that filling stations and motorway service areas were the best places to position the build-out of a charging station infrastructure.
In order to meet the demand for accessible charging apparati on the road, US infrastructure will need to change dramatically. One of Biden’s goals with the Inflation Reduction Act is to build out the country’s first-ever national network of 500,000 electric vehicle chargers which will span America’s highways and roads. On Tuesday, September 27, all 50 states received final approval to begin construction on EV charging stations. Biden administration funding will allocate one EV charging station every 50 miles along interstate highways. As these charging stations crop up from Maine to Texas, Alabama to Utah, Alaska to Hawaii, EV fleets will begin to power the country.
EVs have become sleeker, easier on the eye, and more diversified: there’s an EV out there for you
Gone are the days when driving an environmentally friendly vehicle meant you had to throw style out the window. Companies like Ford have created visually appealing EVs like the electric version of the F-150 truck, and GM has electric Hummers that are sure to please car enthusiasts. Among the top EVs listed in US News and World Report for 2022/2023 were BMW’s electric version of the Mini Cooper, the Mercedes-Benz EQS, and the Ford Mustang Mach-E. Also included were some luxury options from makers like Volvo and Cadillac. Major car manufacturers have included EVs in their repertoire for years, which means consumers now have a large array of different aesthetics to choose from.
China has been building their EV infrastructure, doubling their charging depot capacity in just one year, and moving from subsidized EV purchasing to a competitive and dynamic EV market less reliant on government support. Experts anticipate that EV sales will double in China this year to six million vehicles which is more than what the rest of the world is selling combined. Part and parcel of China’s EV success is a manufacturing drive where China’s car manufacturers now offer buyers a range of cost options from as low as $1,587 for a four-seat hatchback EV (the least expensive EV in the US is $27,000) all the way up to luxury choices rivaling those being developed in the US. China will soon be shipping these electric cars for sale overseas. What this will mean in the larger market and for EV usage overall in the US will be an even more diversified and cost-effective set of EV options for your fleet.
You’ll want a fleet provider offering agnostic payment options for EVs, hybrid vehicles and ICE vehicles
EV charging payment methods are currently fragmented in the marketplace. You’ll want to find a traditional fuel card vendor who can offer you one solution as you move to adopt more hybrid and electric vehicles into your fleet. As you build out your fleet with a mixed solution or an all-EV solution, there will be a lot of steps along the way and a good fleet card partner will be able to help you find your way through all those steps toward a better, more sustainable, and more cost-effective fleet for the future.
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New York Times
Car and Driver
Los Angeles Times
The World Economic Forum Report