OPINION | As the transition to electric vehicles reaches a tipping point, barriers to mass-transit electrification remain. Andrew Bui, AECOM’s global transportation electrification lead, and Ben Prochazka, director of the Electrification Coalition, say fleet owners have an opportunity to lead the way in overcoming these obstacles and accelerate the transition to decarbonised mobility.
Electric vehicle (EV) sales have surged over the past year, driven by a combination of government incentives and greater public awareness of the urgent need to lower carbon emissions to sustainable levels. In the first quarter of 2021, sales of battery electric (BEV) and plug-in hybrid (PHEV) cars increased by 80 per cent and 184 per cent respectively in the top five European markets, compared with the same period a year earlier. In the U.S., sales increased by 63 per cent and 60 per cent respectively.
Over the past 10 years, the range of choice and performance of EVs available to customers have improved considerably. Charging networks are starting to expand, and in some areas charging points are almost as conveniently accessible as traditional petrol stations. Government subsidies and incentives — including tariffs for Ultra Low Emission Zones (ULEZ) and the provision of free charging infrastructure — are starting to make operating costs comparable.
Yet there is a long road to travel to achieve the net zero goals countries are committing to. The U.K., for example, has pledged to end sales of new vehicles with diesel and petrol engines by 2030, but the market share of battery electric vehicles in the country is currently just 7.5 per cent. In the U.S. it is 2.1 per cent, while in China — the global leader — BEVs still only account for 8.5 per cent of the market.
Scaling up the electrification of transport means accelerating consumer acceptance and uptake of this new technology. It also requires connected nationwide networks of charging points, grids taking enough power to the right places, powered by renewable energy sources, and a transformation of the automobile industry. These are complex challenges, but ones that offer huge rewards for those who take the lead.
Governments, transportation authorities and private industry have a significant opportunity to help society over the tipping point of transport electrification. As operators of fleets of hydrocarbon-consuming buses, trucks, vans, company cars and construction vehicles, these operators contribute a considerable proportion of the carbon emissions associated with mobility. Importantly, the operation of these vehicles is often more structured, predictable and consistent compared with personal vehicle usage, making the transition to charging easier and less reliant on a diffuse public network. In addition, electrifying them will yield a disproportionately large payoff for public health, the climate and fleet running costs.
The scale of these fleets provides an attractive opportunity for vehicle manufacturers and inventive new entrants to improve the total cost of ownership of electrical vehicles, so that electrification becomes more economical than operating a traditional platform.
Leading the transition: the opportunity for fleet owners
When fleets transition, they act as a highly visible real-world demonstration of the benefits of EVs that will influence the consumer market, helping to accelerate electrification at scale. It will also spur investment in charging infrastructure, including grid modernisation, and will accelerate the development of an expanded range of EVs and investment in battery technology. In turn, this will push down costs.
Electrification confers operational benefits, too: local authorities in cities and states exploring the opportunity to reduce the operating costs of transit and their wider vehicle fleets, from police cars to refuse haulers, have seen substantial economic returns. Fuel costs for EVs are typically 50 to 60 per cent lower than for comparable petrol-powered vehicles and electric engines require less maintenance. Governments seeking to encourage adoption have provided incentives to give up diesel-powered vehicles in favour of EVs — including, in some cases, for charging provision.
At the city level, electrification can make the streets a better place for citizens. Immediate benefits to underserved areas include cleaner, quieter services and improved air quality. As an integrated part of decentralised urban energy infrastructure, fleet charging points can help accelerate the wider drive to decarbonise. They form part of a more resilient, greener energy network that includes power storage capability, smart management systems, and aligned demand for renewable energy.
In the U.S., cities and states are partnering with not-for-profits such as the Electrification Coalition (EC) to help them scale up the use of EVs. The EC is working with 25 city governments to put in place policies that will speed the electrification of public fleets, transit and school buses, as well as consumer vehicles. The cities of Los Angeles and Charlotte, North Carolina, for example, have committed to electrifying 100 per cent of their transit bus fleets. Albuquerque has developed a vehicle acquisition policy that prioritises zero-emission vehicles, while Pittsburgh is aiming to transition its whole fleet away from fossil fuels by 2030, powering it entirely by renewable energy. The EC also has a program in five states — Michigan, Nevada, North Carolina, Pennsylvania and Virginia — to develop a replicable model that speeds up EV adoption by state-owned fleets.
Making the choice to electrify
Fleets can be the most critical part of an organisation’s infrastructure, either to move customers around, deliver its products to market or to get employees to their place of work. There is a complexity of choice in front of fleet managers about how and when to electrify. This includes considerations of the platform to transition to, the availability of capital and existing financial commitments, the cost of change, confused incentives, sourcing of renewable energy and grid capacity, on-site versus off-site charging requirements, and user training considerations.
AECOM is working with fleet owners to help them understand these choices and the benefits of transition, before providing them with a route map to put change into action. Our work may start with fleet modelling to develop business cases, advances to infrastructure development and, in some instances, retrofitting. Electrification infrastructure required for a standard bus fleet with an existing depot is quite different from that used for a logistics operator whose employees store vans at home overnight or operate their own vehicles as a franchise, for example.
Transitioning from traditional fuels to electrical charging can also require a cultural change as users grow accustomed to operating new equipment. It is essential to ensure that users understand the benefit of the transition and how these new vehicles can make it easier to do their jobs. This means the EVs adopted by the fleet must work as well, or better, than existing models, with the ability to recharge efficiently as part of an organized rota, either at the depot, on the go or at home overnight.
Political support for scaling up the electrification of transport is vital for meeting climate-change commitments. It is important, too, for ensuring that electrification benefits are widespread — city areas with the worst air quality are often the most overlooked when it comes to investment in transportation infrastructure.
Support is certainly growing: the $1 trillion bi-partisan infrastructure bill agreed in the U.S. in August includes $7.5 billion for EV charging stations, although that is only half the amount called for by President Joe Biden. This will be a key element of scaling up electrification: for EVs to become the norm, every driver needs to have convenient access to a charging point when they require it. To make this happen, charging infrastructure has to become part of the planning process, with local governments, utilities and private companies working in partnership.
In Europe, France has stated its intention to end the sale of fossil fuel-powered cars and light commercial vehicles by 2030, offering vehicle-tax incentives for taking a high-emissions vehicle off the road and replacing it with low-emissions one. In the UK, which aims to end the sale of new petrol and diesel cars by 2030, the government has pledged £1.8 billion for charging infrastructure and grants to widen access to zero-emissions vehicles.
In the public sector in the U.S., the Electrification Coalition (EC) has formed the Climate Mayors EV Purchasing Collaborative, involving more than 450 U.S. mayors who have committed to take meaningful action against climate change, and Sourcewell, a public procurement agency. The group helps cities lease EVs on favourable terms, using its collective buying power and structuring leases in a way that enables leasing companies to apply for the federal EV tax credit, passing the savings along to the cities.
In the private sector, the EC is currently collaborating with Nestlé in Ohio on plans to electrify its fleet of trucks, a project that requires the consumer goods giant to transform its freight infrastructure. Having made a commitment to electrification, the company is now planning for the charging infrastructure, so the local utility can build both connection and supply. Until now, facilities managers have not had to think about how their electricity supply connects to their transportation system, but going forward these will need to be conceived and constructed in tandem.
Building up the supply chain
In addition to public bodies, automakers, their suppliers, and energy companies have a key role to play in scaling up the electrification of transportation. While EVs are cheaper to operate over the life of the vehicle, they are currently more expensive upfront because they are not yet being manufactured at sufficient scale. The Electrification Coalition Business Council (ECBC), which includes companies involved in every part of the EV landscape, from charging equipment manufacturers to Ford and GM, aims to ensure U.S. carmakers remain competitive globally during the transition away from internal combustion engine (ICE)-based transport.
While reorganising entire supply chains is not a simple task for auto manufacturers, it’s a truly exciting opportunity for countries who want to demonstrate leadership in the future of transportation — which is electric. This is also providing fertile ground for innovation and new entrants into the market. The rapid rise of Tesla to become the largest car manufacturer in the world — in concert with its investment in battery technology and gigafactories — is well documented. At AECOM, we are supporting the British EV manufacturer Arrival in fast scaling up the provision of its commercial bus and van fleet platform, including both incorporation of this fleet into existing transit and logistical infrastructure and the adoption of vertically integrated production at the local micro-factory scale.
It’s not only automakers that have a transformative opportunity. For utilities, too, supplying power to electric vehicles will become one of the biggest elements of their business. Providing certainty of green energy for charging is fundamental to enabling the decarbonisation potential of vehicle electrification. How EV customers engage with energy providers is ripe for disruption, not only in how they locate and pay for charge-point provision, but in the integration of all their power needs at the brand level.
The future is electric
Internal combustion engine-based transport has a 100-year head start, but today electrification is no longer a question of if, but when. At AECOM, we recognize that society and our customers are at a tipping point. We are working with companies to help them prepare for the transition, understand the potential of new partnerships with utilities, and support them in accelerating electrification.
All parts of society stand to benefit if fleet owners and policy-makers at local and state level seize the moment to bring about the benefits of an electric future faster, joining their forward-looking peers in taking advantage of the disruption to automakers, utilities and infrastructure companies. Waiting longer is a missed opportunity.
This article originally appeared in a special COP26 edition of The Future of Infrastructure, AECOM’s flagship thought leadership report.
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