From the Magazine: Fleet electrification

Anyone managing a fleet of vehicles has probably had the thought of electrification cross their mind.

And it’s a viable idea. Whether it’s a handful of vehicles or dozens, the cost savings on fuel from driving all day long — and if you’re in a major city, fuel wasted sitting in traffic — can be attractive.

Bringing this into the perspective of the automotive aftermarket, many jobbers in Canada may find themselves in a good position to move to electrified delivery vehicles. Whether you’re in a large centre or in rural areas where driving distances can be great, financial savings can be found by dropping the internal combustion engine vehicle for an electric one.

Furthermore, shops that service fleet customers may be having conversations about going electric. If the shop has EV servicing capabilities, these are probably intriguing discussions. Shop owners can play a key role in helping those customers make the move.

But making the switch doesn’t happen by pressing a button. It requires the organization to take on a strategic mindset, like change management, planning and implementation.

But there are key questions to ask. Elizabeth Baker a partner with business advisory firm Deloitte spoke about electrifying fleets at this summer’s EV & Charging Expo in Toronto. She advised anyone looking to electrify to ask where their fleet will see the highest emissions reduction. How should you analyze your fleet and optimize it for a new energy source? There are incentives available — how do you make the most of those?

This is a “process that demands forethought, planning, and careful investment to succeed,” she advised.

Here’s a guide based on what Baker recommended.

Vehicle considerations

Each company has their own unique needs. By analyzing that and usage patterns, leaders can figure out the right EVs and charging infrastructure.

Operational

Current limitations with EVs will require a rethink and redesign of fleet operations, routing and networks. But when thinking about the right vehicle, you will want to think of things beyond just range.

For example, extreme temperatures. Are there areas in your network that would be affected by extreme cold?

Then there’s charging time — identify the roads that are currently electrified and will eventually see the current technology. If you’re in a more rural area or service a wider geographical area or take routes that require higher power, faster charging can be a prioritization.

And there’s payload — what are you carrying, how much of it and how will that impact your range?

Replacement

There are costs and benefits to consider when thinking about replacing versus retrofitting.

“Exchanging ICE vehicles for EVs is the most common approach to fleet electrification today, especially when replacing older vehicles and those with the above average repair maintenance compared to their peers,” Baker said.

Retrofit

Fleets can be retrofitted by replacing the existing powertrain, exhaust system and fuel tank with an electric powertrain and battery pack. This option can enable fleet operators to upcycle existing vehicles rather than prematurely dispose of them. But there could be additional safety checks required to retrofit vehicles.

Infrastructure

Just as consumers are concerned about a lack of infrastructure, fleet managers are as well. “Charging infrastructure is the most complex aspect of the fleet electrification journey,” Baker said.

It will be essential to determine the number of charging stations around you — and not just the ones you need today. Think about your future and growth. Will your facilities or those around you be able to accommodate them?

“So this requires a detailed analysis of your electrical power supply and a structural requirement to support the infrastructure,” Baker said. “Close collaboration with utilities is important given those conversations need to be ongoing over time, as well as consideration, are your older vehicles charging overnight, are they sequentially charging through the day?”

Procurement

You will need charging hardware onsite but that’s only the start of procurement needs. Consideration will need to be given to software that relies on charging speed specs and communication capabilities. There’s also after-sales service and support. Will you own or lease the equipment?

“There are goods and services throughout the procurement chain that need to be thought about and there are options as you go through those chains,” Baker said.

Financial considerations

The total cost of ownership is what’s going to drive the business case for a jobber or anyone to electrify.

“Batteries are the biggest cost for electric vehicles and EVs that require larger batteries to move large payloads or travel longer distances on a single charge cost significantly more than ICE vehicles today,” Baker pointed out.

But if you’re carrying around auto parts that, relatively speaking, don’t weigh very much, the decision might be easier.

“EVs that carry lower payloads are travelled shorter distances, like cargo vans, require smaller batteries and can cost just 15 per cent more than an ICE equivalent,” she said.

And those costs are expected to come down over time with lower energy, maintenance and capital costs.

Operational considerations

Swapping out an internal combustion engine for an EV is not a simple task, Baker warned.

“Change management and workforce training is required for drivers, loaders, maintenance staff — anybody who’s going to be in and around the vehicles and the charging infrastructure. And it’s something not to be taken too lightly,” she said. “There’s often the thought, ‘Well, I’m just replacing an ICE vehicle with an EV.’ But the way that people are working and operating around these vehicles needs to change — there are safety policies and procedures that also need to be updated.”

There are also cybersecurity concerns. Because these vehicles and chargers will be connected to a network, there needs to be controls and standards in place for your organization. It should be embedded into the installation and not treated as an afterthought.

“This is a new potential cyber risk,” Baker said. “And we know many [tech leaders], this is what keeps them up at night. And this is another one that needs to be considered.”

Leveraging the data generated will provide insights that Baker calls “a game changer” as EVs will have more data readily available than before.

“There needs to be a plan around IT and where that data can be stored and how is that data leveraged how are those reports used, needs to be built into that program as well.”

This article appeared in the Fall issue of EV World