Governments and corporations worldwide are switching their fleets to electric vehicles (EVs) to comply with new regulatory requirements and meet their corporate sustainability objectives.
Road transport accounts for 15% of global carbon emissions,1 so converting fleets such as light commercial vehicles (LCVs, which include passenger vehicles and light-duty vans and trucks) and medium- and heavy-duty commercial trucks (MD&HDs) to EVs can significantly reduce an organization’s carbon footprint.
Data observed by Geotab from more than 750,000 vehicles in North America and Europe shows that if every suitable internal combustion engine (ICE) LCV were converted to an EV, it would stop the production of about 19 million tonnes of carbon tailpipe emissions. That’s the equivalent of the CO₂ sequestered every year by a forest covering 24 million acres – an area 10 times the size of Yellowstone National Park.
Converting every EV-suitable LCV in Geotab's study in North America and Europe would save...
19m tonnes
of tailpipe emissions
=
about 24m acres
of forest CO₂ sequestered yearly
or
10x
the size of Yellowstone National Park
“Fleet electrification plays a critical role in decarbonizing transport,” says Oscar Delgado, manager of the Commercial Fleets Center and regional lead for Latin America at the International Council on Clean Transportation (ICCT). “The transportation sector must halve its greenhouse gas emissions in the next 10 to 15 years and reach net zero by 2050, and the only technological option that is available and scalable to achieve this is zero-emission vehicles.”
Done right, the switch to electric can be profitable
The planet is not the only beneficiary of electrification; corporations and governments can make significant cost savings. So how can business leaders electrify their fleets successfully? Research from Geotab suggests that the right approach is:
Holistic
They need to assess their fleet usage comprehensively
Tailored
They need to adapt their methodology to each vehicle‘s duty cycle and size
By analyzing data from their current ICE fleets, business leaders can find the ‘sweet spot’ where switching from ICE to EV is profitable. This is when a vehicle drives distances during the day that are short enough to meet the daily range capabilities of an EV, while driving far enough annually to generate cost savings on fuel, maintenance and overall operations.
Environmental services company Veolia UK manages 7,000 commercial vehicles, including 200 EVs, mostly on behalf of local authority customers. Switching vehicles operating in an urban environment — which spend a lot of time idling in traffic — to electric has a strong positive impact on reducing carbon footprints and air pollutants, explains fleet director Gary Clark. “The transition from a diesel van to an electric van is quite simple in terms of due diligence, so we were very agile in moving the elements of our van fleet, as well as our cage vehicles, e-trikes and e-bikes to being fully electric,” he says. “But we’ve also shown a lot of progress with the larger vehicles such as the heavy goods vehicles, in particular with our refuse compaction vehicles (RCVs).”
Relatively short daily miles traveled, predictable routes and the possibility to charge overnight at a depot will help the case for electrification, regardless of a vehicle’s weight class.
Oscar Delgado
Manager of the Commercial Fleets Center and regional lead for Latin America, International Council on Clean Transportation (ICCT)
Relatively short daily miles traveled, predictable routes and the possibility to charge overnight at a depot will help the case for electrification, regardless of a vehicle’s weight class.
Oscar Delgado
Manager of the Commercial Fleets Center and regional lead for Latin America, International Council on Clean Transportation (ICCT)
How to find the electrification sweet spot
Electrifying light commercial vehicles
As a starting point, business leaders should conduct an EV suitability assessment (EVSA) for each LCV in the fleet.
The financial benefit of electrification will be tangible. Of the vehicles studied, 41% were considered EV suitable. However, Geotab data finds that if all 75% of range-capable LCVs transitioned to electric, regardless of cost, the EVs would still save an average TCO of $1,900 over each vehicle’s lifetime. Put differently, the TCO savings from adding one EV could help finance the purchase of additional EVs within the fleet while still incurring a net saving.
Clark stresses that while there may be a higher upfront cost for EVs, local authorities will look to balance the cost aspect with the fulfillment of their environmental and ecological transformation targets. Since it started electrifying six years ago, Veolia’s assessment of operating costs, such as electricity and maintenance, has made Clark confident that these will be “comparable with diesel, if not less. We are taking necessary steps so that we can evidence this over a longer period using telematics data, in order to create a true TCO model.”
Developing a thorough understanding of ICE vehicle usage data offers an additional opportunity to help fleets find the EV sweet spot. Although low-usage EVs would likely meet the range needs of the fleet, they would be less likely to save the fleet money. By looking at total utilization across all ICE vehicles, business leaders can identify and consolidate the ones that have the lowest utilization rate (known as ‘rightsizing’) before conducting an EVSA. In doing so, fleets can ensure they only transition vehicles that will satisfy operational needs and bring financial benefits.
of LCVs are range capable If all were transitioned to electric, regardless of cost, average lifetime TCO savings would be $1,900 per vehicle
Electrifying medium- and heavy-duty commercial trucks
An EVSA for LCVs can be fairly straightforward with the right data at hand, but electrifying a medium- and heavy-duty (MD&HDs) fleet is more complex. Firstly, variables such as payload, speed and terrain that have an impact on range capacity are amplified for larger vehicles. This data might not be readily available, which makes it more difficult to assess potential suitability. Secondly, the charging infrastructure to service MD&HDs requires a much larger scale than the infrastructure for LCVs.
“In terms of duty cycle and cost, there’s generally more risk attached to larger vehicles compared with the smaller ones,” says Clark. “We want to make sure that we’re not actually buying a truck, putting it to work, and only then understanding that there are compromises once it has started running.”
But looking at driving patterns can help to identify potential swaps. According to Geotab, which observed data from 500,000 MD&HDs in North America, 53% of heavy-duty vehicles never drive more than 400 miles a day, and 56% of medium-duty vehicles never exceed 250 miles even on their longest driving day. A look at daily range, followed by where and when they're typically parked, can narrow down the pool of MD&HDs that would make ideal candidates for electrification.
For that reason, certain MD&HD vehicle types, such as transit buses, urban delivery trucks and drayage trucks are prime candidates for electrification, Delgado explains. And while the upfront capital costs of electric trucks are higher, their lower operational costs will offset the difference over the years, with higher utilization rates offsetting costs faster.
In addition, Geotab finds that, with the exception of those with long distance driving patterns, the majority of vehicles stay parked for long periods daily: at least 12 hours and 10 hours for medium-duty and heavy-duty, respectively. A long dwell time means a vehicle would have an opportunity to charge, which enhances its potential suitability for electrification.
“Relatively short daily miles traveled, predictable routes and the possibility to charge overnight at a depot will help the case for electrification, regardless of a vehicle‘s weight class,” Delgado says.
It’s not just about LCVs
Organizations should seize the financial and environmental opportunities offered by fleet electrification where it makes sense today. And as we have seen, an electrification strategy starts with an analysis of current ICE vehicle data. With that data, business leaders can understand how far fleet vehicles drive, where and for how long they dwell, and what they cost to operate, in order to identify how many vehicles fall within the electrification sweet spot. They should also ensure that they use this opportunity to optimize their fleet make-up alongside their EV transition.
Implementing LCV electrification will bring tangible benefits. But it’s not just about LCVs: MD&HDs can be deployed for different job types, and using fleet data can help identify which are suitable for a switch to electric. The fact that many MD&HDs drive local and regional routes means that, contrary to popular belief, they are also good candidates for electrification — and a potential source of savings and emissions reduction.
Veolia believes electric RCVs are good news for its customers. “We have worked with a number of our local authority partners now to deliver fleet electrification,” says Clark. “The recent deployment of electric RCVs for Westminster City Council (in London) has led to a reduction in carbon emissions of up to 89% compared with diesel vehicles. We believe that the biggest vehicles present the biggest opportunities.”
We believe that the biggest vehicles present the biggest opportunities.
Gary Clark
Fleet director, Veolia UK
We believe that the biggest vehicles present the biggest opportunities.
Gary Clark
Fleet director, Veolia UK
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Copyright 2024. Geotab Inc. and/or its affiliates. All Rights Reserved