The challenges of switching vehicle fleets to electric, and how to tackle them
Opinion | Steven Meersman, Co-founder and Director at Zenobē > The electrification of vehicle fleets is an important shift happening within the UK transport sector, and for some, a no brainer. The move to alternative-fuelled vehicles will eventually be unavoidable, with the UK government prohibiting the sale of new diesel and petrol cars and vans by 2030 and HGVs by 2040 as part of its decarbonisation plans.
However, whilst the inevitability of electric transport is apparent, for many fleet operators the decision to transition from internal combustion engines (ICE) to electric vehicles (EV) is daunting and requires considerable thought. For these operators, there are several barriers to electrification that must be considered and overcome.
High upfront costs
Despite the price of lithium-ion batteries dropping by 80% since 2013, the upfront cost of new EVs is still high when compared to petrol or diesel vehicles. Whilst this is considered a major barrier to adoption, there are several actions operators can take to address this.
Since 2021, numerous public funds have been created, offering partnership, match-funding, and more, to help reduce initial capital expenditure (CAPEX) whilst increasing business opportunities. Businesses can also turn to private companies which offer possibilities to spread the costs of infrastructure, batteries, battery repair, and vehicles over the contract’s duration (10-15 years).
It’s also important that operators consider the long-term financial benefits and the Total Cost of Ownership (TCO) of switching to electric, rather than just the original investment. EVs have the potential to reduce fuel expenses by 2-3 times and maintenance costs by 70% compared to ICE counterparts. There are also tax incentives to switching to electric and exemptions from congestion and ULEZ costs to consider, particularly as they are set to rise and expand to more areas of the UK over the next decade.
Access to power & keeping energy costs down
To run an EV fleet, depots will typically need to upgrade their connection to the electricity grid, which can be costly and time-consuming. We often see operators put off by this, concerned about operating costs and the possibility of surpassing local power restrictions.
However, these obstacles can be addressed with the right power procurement strategy and use of smart charging software. Installing onsite batteries can reduce peak power charges and boost supply during peak times, benefiting the operator and local power capacity. On top of this, power purchase agreements (PPA) can reduce supply uncertainty, whilst connection agreements such as a timed connection, can reduce costs.
Smart charging software can track energy use by bus, driver, and depot. With this information, operators can identify the underlying causes of inefficient driving and incentivise drivers to improve their performance. They can also use software to analyse energy consumption and look how to streamline, creating an efficient and economical charging strategy. The entire operation can be optimised by thoroughly evaluating a fleet’s power requirements.
Service continuity during construction
Transitioning a depot to electric requires extensive building work and electrical infrastructure installation, and all of this happens while the fleet operator continues to provide services to its customers. The worry is that installation could interrupt existing operations, take too long, or be too expensive.
With appropriate planning, these anxieties don’t have to become a reality. Installing in phases allows normal activities to carry on in one area while work is being done in another, and new parking layouts and designs can be created to improve operations and ensure existing operations can continue. Operators can ensure resilience by working with tried-and-tested organisations and contractors, as well as considering established after-sales service, guarantees, and management systems.
Technical risk and future resilience
Most operators are unfamiliar with EVs and the infrastructure that supports them. As a result, they can be concerned about the technological and operational risks of the new equipment and its resilience for future operational growth.
Operators should seek expert advice from vendors with a track record in the industry and make sure that proper planning, installation, and maintenance procedures are followed. This will ensure that electrical infrastructure, chargers, and buses are resilient and that costly mistakes are avoided. By implementing proper back-office management, issues can be identified and fixed quickly, resulting in strong uptime performance. Keep in mind that TCO and return on investment (ROI) are achieved over time, so don’t only look at the price: evaluate the quality of the equipment, as well as the availability of trustworthy support and performance.
Environmental and social concerns
An average e-bus battery needs to be replaced every seven years, raising concerns about precious mineral extraction and waste, carbon emissions, and the social repercussions of these operations.
What we must remember is that the carbon emissions from battery production are offset considerably by the carbon emissions avoided by their usage (averaging a ratio of 1 tonne emitted to 20 tonnes saved). Batteries are therefore critical to our transition to clean transportation, energy, and air.
We can further limit their environmental impact by promoting a responsible, circular economy. Batteries that are no longer fit to power EVs can be used in a second life, powering events and film sets or repurposed as onsite batteries. Thanks to this residual, second life value, the initial cost of the battery to operators can be reduced. On top of this, battery recycling is a solution that is growing in tandem with the demand for batteries, with the goal of reaching a more economically efficient process as soon as possible.
Turning to social concerns, more and more organisations are committed to ensuring that their supply chains do not contribute to human rights violations or that they do not purchase batteries containing conflict materials. As a matter of process, operators should seek to work with organisations who have clear policies on this.
Making the switch
Whilst making the switch to electric fleets can be charged with uncertainty for operators, the challenges can be alleviated if the right planning, strategy, infrastructure, and partnerships are put in place. By using an end-to-end fleet electrification solution, the transition to EVs can be both environmentally and financially sustainable.
We’ve recently published a guide to electric vehicle batters and battery performance for fleet operators, read it here.
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