How can Automotive Businesses Make a Monumental Shift to Electric Fleet Vehicles?

Saurabh Singh August 3, 2023
electric fleet vehicle transition

The automotive industry is making a significant shift towards electric fleet vehicles as part of its efforts to pave the way for a greener and more sustainable future. Given the increasing global concerns over carbon emissions and environmental impact, businesses in the automotive sector are realizing the urgent need to transition from traditional fuel-based fleets to electric alternatives.

According to the IEA 2023 report, the exponential growth of electric car markets continues, with sales exceeding 10 million in 2022 alone. Over 14% of all new cars sold were electric last year – that’s up from around 9% in 2021 and less than 5% just two years ago. This pattern seems set to continue throughout 2023, with more than 2.3 million electric cars already sold within the first quarter – an impressive increase of about 25% compared to the same period last year.

As we move into the rest of this year, new purchases will likely accelerate. The projections suggest that by the end of this year, sales could reach approximately 14 million, which marks a staggering year-on-year increase of around 35%. Such outstanding performance would mean that electric cars could eventually account for nearly one-fifth (18%) of total car sales across all calendar years going forward into an eco-conscious future.

Join the electric momentum with Appinventiv

As the shift to electric vehicles gains momentum, automotive businesses must prepare for an electric fleet vehicle transition. In this article, we aim to assist automotive businesses in making this remarkable transition by identifying key steps they can take. It will explore crucial factors such as infrastructure planning, technology utilization in managing financial considerations regarding investment and operational costs, employee engagement and training, and optimizing electric fleet transition for automotive businesses. By incorporating these critical factors into their strategy, automotive businesses will establish themselves as leaders in the rapidly-changing transportation landscape while paving the way toward a sustainable future.

What are the Benefits of Shifting to Electric Fleet Vehicles for Automotive Businesses?

When fleet managers embrace electrifying their operations and installing electric vehicle (EV) charging stations, they pave a path toward a brighter, cleaner future. Transitioning to an EV fleet provides numerous benefits of electric fleet vehicles that encourage clean adoption. Here are some of the reasons for making the switch to an EV fleet:

Benefits of Shifting to Electric Fleet Vehicles for Automotive Businesses

Low Costs

Electric vehicle adoption in automotive businesses presents numerous benefits that ultimately lower operational expenses. Specifically, this includes a reduction in the total cost of ownership (TCO) and decreased expenditures on fuel and optimized electricity usage. By diving into these cost-saving opportunities, businesses can maximize their bottom line while playing a role in sustainability efforts.

Reduce TCO (Total Cost of Ownership)

The lowered total cost of ownership (TCO) is one of the primary driving factors behind the increasing electric fleet adoption strategies of electric vehicle fleets. According to McKinsey, EV fleets are predicted to have a 15-25% lower TCO than those utilizing ICE vehicles by 2030. While there may be higher upfront costs, such as purchasing new EVs and installing charging infrastructure, lower operating expenses, government subsidies, and utility rebate programs offset these.

In addition to financial benefits, electric vehicle maintenance costs are significantly lower than those associated with traditional gas-powered vehicles. This is partly due to their increased reliability and data utilization for preventative maintenance purposes. Fleet managers will no longer have to allocate budgets for oil changes or engine fluid replacements once they have adopted an EV fleet. Overall, the estimated cost of maintaining an EV is less than 6 cents per mile compared to light-duty ICE vehicles’ cost of 10.1 cents per mile.

Reduce Fuel Expenses

Replacing ICE fleets with green fleets can provide significant cost savings in the long term since EVs are less expensive to own, maintain, and operate, as well as fuel. This is because electricity is a more economical energy source compared to diesel. Let’s examine some striking statistics:

  • An EV costs about $485 annually to fuel and maintain, while the average ICE vehicle costs roughly $1,177 per year.
  • Diesel prices across the United States have an average of $2.96 per gallon, while electricity prices, on average, cost only $1.29 per gallon of diesel equivalent.
  • Compared to ICE vehicles, EVs are more efficient with energy. The EV drive system only accounts for a 15-20% energy loss, whereas gasoline engines register between 64-75% energy loss.

Fleet managers can also strengthen their budgeting capabilities besides lowering fuel prices since they no longer have to depend on unstable fuel pricing. Cost estimates for fueling can be made more accurately due to the stable nature of electricity prices.

Correct Electricity Use

Cutting-edge electric vehicle charging solutions incorporate managed charging software that assists fleet managers in optimizing their electricity consumption, resulting in even more cost savings. State-of-the-art Electric Vehicle Supply Equipment (EVSE) can be configured to avoid rush hour rates and emphasize charging when energy prices are low, guaranteeing that vehicles are fully charged at the most opportune moment to maximize savings.

Enhance Operational Efficiency

Another major benefits of electric fleet vehicles is enhanced vehicle performance. The instant torque provided by EVs offers an impressive advantage over traditional combustion engines by enabling quicker acceleration and smoother responsiveness from a complete standstill. This instantaneous burst of power maximizes speed with less force, making it ideal for hauling freight or passengers efficiently at high speeds. By taking advantage of the instant torque offered by an electrified fleet, operators can keep things moving quickly and reduce downtime between tasks, leading to greater overall efficiency in completing workloads.

Less Carbon Footprint

The transportation industry, including cars, trucks, planes, trains, and boats, is now the primary source of greenhouse gas emissions. It produces a staggering 1.9 billion tons of CO2 annually. As conscientious companies look to become more eco-friendly and resonate with consumers’ ideals, they can do so by electrifying their fleets. Lowering corporate carbon footprints and reducing emissions from medium- to heavy-duty fleets are essential to fuel a cost-effective and cleaner energy future while having a positive ecological impact of electric fleet vehicles in automotive businesses.

What are the Steps for Automotive Businesses to Transition to Electric Fleet Vehicles?

The successful electric fleet vehicle transition process requires diligent planning and execution. To achieve this, the following key steps should be taken into consideration:

Know Different Funding Options

Before making any significant investments in the electric fleet transition for automotive businesses, it’s essential to explore financing options available through various channels. The government and federal funds offer incentives and financing programs to help you save money while transitioning to electric-powered vehicles. 

Financing Options

Some of the attractive options for funding include:

  • EVSE Charge Ready NYSERDA – This program offers rebates of up to $4,000 per charging port for businesses that install Level 2 EV charging stations at public parking establishments, workplaces, and apartment facilities.
  • Electric Vehicle Incentives – The federal government and states offer generous incentives for passenger personal electric cars and commercial automobiles like school buses, public buses, and fleet automobiles.
  • Infrastructure upgrades – Make Ready Program (New York) is devised explicitly to cater to the development of electronic infrastructure for accommodating an increased deployment of EVs. It provides funding for both customer-side and utility-side MRP infrastructure.
  • LCFS Credits are an easy way to generate additional revenue with your charging operations by rendering LCFS credits.

By leveraging these financing alternatives or a mix of them, you won’t have to bear all the expenses required to implement eco-friendly practices in your company’s transportation.

Utility Options:

When managing the charging operations for your electric fleet transition for automotive businesses, building strong relationships with your energy provider and subscribing to beneficial programs is essential. Here are some tips to ensure that you choose the right program for your fleet’s needs:

  • Start early by engaging with your energy provider to determine how you will be charged for electricity, as service upgrades can take several months to years.
  • Compute electricity costs and weigh them against infrastructure upgrade expenses.
  • Ask the utility companies about preferential EV rates.
  • Take advantage of demand charge allowances for peak power used in billing cycles.
  • Examine` the TOU rates during high/low demand periods that correspond with high/low prices.
  • Be aware of how power and energy impact fueling needs for the fleet.
  • Understand what charging methods work best for you – faster, shorter, or slower and longer, depending on peak usage periods.
  • Reduce peak charging as much as possible by charging during off-peak hours whenever feasible.

By following these steps, you can establish a successful relationship with your energy provider while efficiently conserving costs and managing your electric fleet.

Develop an Electric Fleet Charging Infrastructure

To develop a well-structured infrastructure, you have to find the solution to these questions.

Develop an Electric Fleet Charging Infrastructure

Your fleet operations will require how many electric vehicles and chargers?

Determining the necessary assets for your fleet operations, specifically the number of EV chargers and electric vehicles requires a comprehensive evaluation based on the size and type of your charging operation. Simulation tools can facilitate this process by providing valuable insights and recommendations for optimized charging costs and punctual departures. With these tools, you can confidently determine the ideal number and type of chargers required for your fleet while maximizing efficiency.

For my fleet, what are my options for electric vehicles?

While there is no denying that electric vehicles require a larger upfront investment than traditional fleet vehicles, their fuel savings offer significant returns in reduced energy costs. When deciding on which electric vehicles and charging equipment to choose for your fleet, there are several factors you need to consider.

These include examining charging speeds, range, and fleet schedule. Another important step is to upload your fleet data and review total cost of ownership (TCO) analyses and emission savings. 

Additionally, it’s crucial to evaluate what EV charging point options are available, such as AC chargers for overnight charging or DC chargers for high-power opportunity charging. Selecting OCPP protocol charging devices is suggested to assure interoperability between different EVSE and common protocols so that the charger and vehicle can communicate effectively.

Which software is required for electric fleet operation?

To effectively operate an electric fleet, several software systems are necessary. A Charging Management System is needed to manage to charge operations, provide alerts and maintenance for infrastructure, optimize charging to reduce costs and ensure on-time departures of vehicles. Additionally, an Energy Management System may already be in place for a building or facility and can be combined with the CMS for overall optimization. 

Finally, a Fleet Management System that tracks fleet vehicles and dispatches schedules should also be integrated with the EV CMS to ensure readiness while minimizing charging expenses. Businesses can efficiently manage their electric fleets and achieve optimal results by utilizing these software solutions.

Also read: How Much Does it Cost to Develop a Fleet Management Software?

Optimize the Charging Operations by Putting Everything Together

The last step is selecting a cutting-edge and intuitive smart charging platform to streamline your fleet charging, conserve energy and cut costs, and guarantee that your fleet vehicles are always fully charged and ready for their next task.

utilize Appinventiv's electric vehicle software development services

Electrifying Fleet Vehicles: Tips for Success

Here are some that will help you in the shifting to electric fleet vehicles process:

Consider Starting Small and Working Your Way Up

Transitioning fleets to electric vehicles works best when done in stages, as demonstrated by local governments’ experiences. Fleet managers often start with transitioning a specific type of vehicle, such as sedans or small SUVs, to more quickly assess their capabilities and limitations for different uses. This provides baseline data for employee training and managing expectations relative to gas-powered vehicles.

A phased conversion timeline can begin with a small number of EVs and gradually increase the percentage until your agency’s established goals are met. Some local governments are adopting multi-pronged procurement electric fleet transition strategies by purchasing EVs for some uses, targeting hybrid vehicles for others, and acquiring renewable diesel vehicles for heavy-duty applications.

At first, your fleet managers may need more in-house expertise to maintain an EV fleet fully. To address this issue, initially, agencies outsource maintenance by utilizing service warranties when purchasing vehicles or taking them to trusted voltage mechanics, including dealerships.

Think About Procurement Options

Finding the right electric vehicle within a desired timeframe can be challenging due to the high demand. Still, fleet managers who plan and are open to exploring alternative procurement sources will increase their chances of success. The Washington State Department of Enterprise Services offers EVs as part of its Contract Vehicle Menu, which includes hybrids and gas-powered vehicles. 

Local governments can also access competitive bids on EVs and charging infrastructure through the Climate Mayors EV Purchasing Collaborative portal. Additionally, WSU Green Transportation Program staff can help local governments identify other sources for EVs. For those seeking local options, purchasing from a dealership is ideal since they already have in-house expertise available for fleet maintenance along with immediate access to EV inventory.

Collaborate with your Electric Utility to Establish EV Charging Infrastructure

Efficient and accessible charging infrastructure is crucial for the electric vehicle adoption in automotive businesses. Local governing bodies must work with their respective electric utilities to identify suitable locations and assess necessary upgrades for fleet charging stations. With early involvement from an electric utility, agencies can plan in advance for managing and shifting electrical loads to cater to EV fleets.

Several utilities based in Washington State offer incentives for installing charging stations, such as Puget Sound Energy, Snohomish PUD, Avista, and Energy Northwest. In some cases, they can provide start-up charging infrastructure at no extra cost.

Local governments in rural communities can benefit from applying to the Electrification of Transportation System grants offered by the Washington State Department of Commerce. This program will fund EV and hydrogen infrastructure development within rural communities until March 6, 2023.

Recently awarded $70 million in federal funding through the Bipartisan Infrastructure Law’s deployment plan establishes priorities for building a statewide EV charging network along significant transportation corridors across Washington state—beginning with major highways. You can refer to the Washington State Plan for Electric Vehicles Infrastructure Deployment initiative or use interactive maps provided by WSDOT (Washington State Department of Transportation) to suggest potential locations for charging stations on priority routes known as alternative fuel corridors.

Conclusion

To summarize, the shifting to electric fleet vehicles is crucial for automotive businesses and the greater good of our planet. Companies that make the switch can reap significant advantages of electric fleet vehicles such as reduced operational costs, decreased carbon footprint, and improved efficiency. For a successful transition, automotive businesses must take a structured approach. 

This includes exploring funding options and maximizing incentives and financing programs, partnering with energy providers to optimize charging operations and reduce expenses, creating a robust charging infrastructure based on fleet needs and available electric vehicle options, and implementing electric fleet solutions software systems for effective fleet management. At Appinventiv, we believe that a greener future is what we all need and with out electric vehicle mobile app development services, we want to assist automotive businesses all over the world make this transition as efficiently as possible. 

By embracing electric fleet vehicles, automotive businesses can demonstrate leadership while contributing positively to our environment. The time is ripe to act as more individuals recognize sustainable transportation’s importance in preserving our planet while boosting profits. Together we can drive this monumental shift towards electric fleets to achieve cleaner transportation worldwide.

FAQs

Q: What is the incentive for automotive businesses to switch to electric fleet vehicles?

A: It’s a wise move for automotive companies to invest in electric fleet vehicles. This decision not only reduces carbon emissions but also lowers operational costs and boosts sustainability measures – an overall win-win situation. In addition, this move positions the business as an industry leader while also serving the rising demand for eco-friendly transportation solutions.

Q: How can automotive businesses finance the electric fleet vehicle transition?

A: Automotive businesses looking to transition to electric fleet vehicles can explore various financing options. These may include government incentives, federal funds, and utility rebate programs. Additionally, manufacturers and specialized financial institutions offer leasing or financing arrangements specifically tailored for electric vehicle investments. By carefully considering all available options, automotive businesses can successfully finance their transition towards a more sustainable and efficient transportation future.

Q: How can automotive businesses ensure a smooth transition from traditional vehicles to electric fleet vehicles?

A: To ensure electric fleet vehicle transition goes as smoothly as possible, businesses must engage in careful planning, provide employees with comprehensive training and engagement opportunities, collaborate with industry experts and partners, and regularly monitor and optimize the performance of their vehicles. By implementing these best practices, companies can streamline their sustainability efforts while minimizing disruptions to operations and maximizing return on investment.

THE AUTHOR
Saurabh Singh
CEO & Director
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