Nearly all big parcel, freight, e-commerce delivery, rental and other fleet operators share a common vision for future electrification. They want to do their part to reduce carbon emissions by phasing out existing internal combustion engine (ICE) fleets.
While this is a journey worth taking, operators and owners should be cognizant of these four factors:
- The transition to electric vehicles (EVs) will be a marathon, not a sprint.
- Supply chain constraints will impact short-term and long-term planning.
- Operating models must be flexible enough to accommodate unexpected and volatile conditions.
- People are a very important part of this journey.
Go at a Steady Pace
For large fleet operators, the transition to EVs could take anywhere from five to 10 or even 20 years — far longer than most anticipate. An incremental pace of transition will likely be ideal for meeting sustainable business objectives.
The operating profile of each fleet will drive the pace of its transition. An e-commerce or parcel delivery fleet that has vehicles running established routes and then returning to a fixed location will have different business requirements than a freight shipping company that runs trucks from a series of distribution centers coast to coast. Even with firm plans to transition to EVs, these plans must not cause a disruption to the fleet operator’s core business.
It is quite likely that most fleets — especially the largest — will be running a mix of electric and combustion vehicles for some time. This moderated pace will be dictated by the technology built inside EVs and the charging infrastructure, which is still relatively new and likely to continue evolving while EVs are progressively added to fleets. This evolution means that various types of EVs for commercial uses will continue to be modified and improved over time and are not likely to be available to serve the total scope of demands for a few years.
Supply Chain Kinks
The continuing imbalances in global supply chains are another factor that fleet managers need to consider during the transition to EVs.
In most cases, lead times for orders of EVs are in the two-year range, and components needed for the charging infrastructure can take up to 18 months for delivery. Items like metals for batteries, electrical steel for transformers and other vital components needed to manufacture EVs, chargers and electrical gear have constrained supply lines, and manufacturers have no realistic time frames for delivery. In addition, silicon chips needed for electronic components in vehicles and chargers also are in short supply.
Though there are multiple factors causing supply chain issues, the consensus view is that shortages will persist for the foreseeable future and EV manufacturers will have difficulty meeting demand. This is another factor that will force fleet operators to extend time frames for a full conversion to EVs. Procurement timelines will stretch longer, creating more unpredictability.
Operations Flexibility
Given the expected slow pace of this transition, operations must be able to flex to accommodate new demands. Fleets are likely to be a mix of EVs and ICE vehicles for a considerable period. This will impact everything from basic refueling to routine maintenance.
Gas-powered delivery fleets have followed the same operating model for decades: A driver leaves in the morning on his or her route, then returns to the depot at the end of the day to refuel, park and go home.
This system will shift significantly as EVs are integrated into the fleet. An EV driver returning from the delivery route must find or be directed to the optimal location to charge instead of pulling up to a fuel pump. This will be complicated by other factors, such as charging power, time to start charging, total peak load, demand charges and utility tariffs, among many others. Fleets where EVs will go home with drivers; fleets with mixed light-, medium- and heavy-duty vehicles; and specialized-use fleets such as bucket trucks, refuse trucks, etc., will add another layer of operational complexity. This will require new software and communication methods for a frictionless experience for EV fleet drivers.
The new software and enterprise systems needed for these new demands will create a need for common and interoperable technical standards. As more EVs are integrated into fleets nationwide, it will be imperative that hardware and software work on common platforms.
Cybersecurity and equipment obsolescence will also change the operating profile. With charging systems connected via wireless or other communications, companies must take steps to limit system vulnerabilities to hackers and other cybercriminals.
People May Be the Most Important Factor
As operators proceed through the transition journey, organizational change management is another key consideration. The success of this transition will depend on the buy-in and support of everyone on the front lines. Fleet operators who assume they are done after they buy EVs and chargers could be in for an unpleasant surprise. Training for maintenance and all other skilled professionals will be vital because many new processes will be required.
As electrification becomes a part of the long successful legacy of fleet operations, a willingness to learn and adapt will be the key to success.
Fleet owners and operators are developing plans for electrification that are often driven by state and local mandates.
