How to transition to an electric fleet
Why are Fortune 100 logistics companies like FedEx and Amazon beginning to electrify their massive vehicle fleets? As the cost of electric vehicles (EVs) and electric vehicle supply equipment (EVSE) has come down and incentives have stacked up, the value of fleet electrification has multiplied.
The benefits of fleet electrification
From lower operations costs to emissions reductions, fleet electrificaiton is rising to the top of corporate priority lists for companies across a wide range of industries.
The US Department of Energy provides an excellent tool for comparing the cost of vehicle ownership. If you want to look more granularly at just maintenance, AAA's 2022 Your Driving Costs Factsheet breaks down the per-mile maintenance costs across most vehicle categories. They only include one category for EVs, with maintenance costs calculated at 7.94¢ per mile, 22% below the average across all categories. That represents both a cost and time saving: with so few moving parts, EVs spend a lot less time at the mechanics’. This means less vehicle downtime and higher utilization rate.
Beyond that, EVs cost 345% less to fuel (4.04¢ vs. 17.99¢) than the average of all vehicles according to the same 2022 study. Even if gas prices dropped to $2 a gallon and the cost of electricity tripled, it would still be cheaper to fuel an EV.
A 2022 study in Environmental Research Letters found that light-duty EVs in the US have 64% lower emissions cradle-to-grave than gas-powered vehicles. That covers everything from vehicle and battery manufacturing to fuel production and disposal, and it accounts for how electricity is generated all over the US, not just parts of the country with higher ratios of renewables in their generation mix. Which means that as utilities increase their generation of renewable energy, the emissions difference will become even more pronounced.
With that kind of emissions reduction, fleet electrification can meaningfully accelerate progress towards sustainability goals. Enel electrifying its fleet in 2019, and within a year nearly 20% of our fleet was electric, with 900 smart EV charging stations serving those vehicles. The two combined led to a 738,000 kg reduction of carbon emissions.
Fleet electrification: How to get started
Fleet electrification will likely take more than a year to complete and require coordination across different teams in your organization. Follow these steps to ensure a seamless process:
1. Establish your fleet electrification goals
You’ll need goals around milestones (e.g. 25% of the fleet electrified by year one), returns (e.g. initial investment paid for in operational savings within five years), and savings (e.g. 40% reduction in CO2 emissions through fleet electrification). These should be evidence-backed; you can learn a good bit from reading case studies and attending webinars of other companies talking about fleet electrification, but having a partner with experience guiding organizations through fleet electrification projects is the best research tool out there.
2. Site your electrical infrastructure
Decide where you’ll park and charge the fleet you’ve envisioned in step one. For some organizations, it makes more sense to purchase home chargers and finance their installation so fleet vehicles can be recharged at employees’ houses. This setup can help organizations attract and retain talent and keep on-site operating costs down.
For other organizations, fleet vehicles will need to be recharged at the depot or office parking lot. To plan for this, you’ll need to know:
- how many vehicles you’ll ultimately want electrified
- how many miles they’ll drive in a day on average
- when you’ll charge them
- the approximate fuel efficiency of the vehicles you’re going to buy (as expressed in kWh per mile of range)
Put that information together to figure out how many EV chargers you’ll need, like this:
Example—last mile delivery fleet
- How many vehicles: 100 vehicles recharge at once
- How many miles driven: those 100 vehicles drive a total of 10,000 miles per day
- Average miles of required recharge per EV: 10,000 miles/100 vehicles = 100 miles
- Charging hours: those 100 vehicles recharge in the 2 hours between 4am and 6am
- Total hourly demand: 100 miles/2 hours = 50 miles of recharge per hour
- Fuel efficiency: Fleet vehicles require 0.35kWh to replenish one mile of range on average
- Hourly consumption per fleet vehicle: 50 * 0.35kWh = 18.75kW per port
If the operator in this example wants to avoid having anyone onsite dealing with moving vehicles during those two hours, they’ll need one charging port per fleet vehicle, or 100 total ports. The lowest power Level 2 smart charger will deliver plenty of charge, but it might be more economical to install half as many chargers and charge half the fleet in the first hour, and half in the second hour.
In that case the operator would need to double the fleet hourly consumption to 37.5kW per port. Level 2 smart chargers like the JuiceBox Pro 40 are perfect for this assignment.
When you know how many smart chargers and what charging speed you’ll need, you can determine where to put all this infrastructure. Walk your site and note possible locations that would enable you to hook charging stations into existing grid connections, but allow room for expansion in case your fleet grows.
3. Pick a partner, save time and money
When you have a rough project design, find a partner that can help you navigate and access the slew of incentives available, manage contractors and permitting, connect you with the best vendors and get you the chargers you want. There are myriad steps in the process of fleet electrification; having one partner that can help you through all of them is key to getting the project done on time and at cost.
From an operational perspecitve you’ll also need to consider how charging times, availibility of infrastructure and range will affect day-to-day operations. Enel X Way offers a full range of commercial EV chargers, has deep experience helping organizations find and stack incentives, and offers full-service charge point operation from installation to maintenance, financing and a fleet concierge service.
4. Find the right financing option
You’ll need to decide whether to purchase your EVs and EVSE outright, finance them, or some combination of the two. Depending on what incentives are available to your organization, financing through a loan, a lease, or Charging-as-a-Service (CaaS) may make much more sense financially.
If you want to leave the door open to equipment upgrades in the near future, leasing and CaaS provide more flexibility. If you’re willing to pay a premium for a turnkey solution, CaaS will save you having to budget for ongoing operations and maintenance (O&M) and support.
You can tap federal, state and local incentives and rebates using any financing method, but the specific incentives available may vary depending on how you finance.
5. Execute a pilot project
Replacing a full fleet of more than a few dozen vehicles at once isn’t feasible for most organizations: costs are high, you might incur an unnecessary loss if you replace new or barely used fleet vehicles, and both EV and EVSE inventory is variable. Moreover, costs of most EVs are coming down as new models hit the streets and battery technology improves; electrifying in phases will help you capitalize on lower prices.
The one exception is electrical infrastructure improvements. Infrastructural work can make up a substantial portion of your total CapEx before incentives, and if contractors or your utility have to break ground twice—or more—to put in what you need for your full network of EV chargers, you’ll end up paying much more than you would if you had all the work done at once.
6. Review. Refine. Repeat.
GIve your organization a chance to A/B test electric fleet vehicles against gas-powered vehicles. Applying the data you can get here—about ease of use, operational costs, charging patterns and emissions reductions—will yield a better-fitting EV fleet with more buy-in across the organization.
EV fleet charging tips
The smart chargers you install work best if you take advantage of their full functionality.
- If your fleet vehicles will be plugged in for longer periods, you can set a load cap that will keep your network of chargers from exceeding a total kW demand at any given time, lowering demand strain, and preventing demand spikes.
- Specify when your smart chargers should deliver a charge, allowing you to use energy only when rates are lowest.
- Prioritize charging for the vehicles that need it most by choosing the order and level to which vehicles are charged when multiple vehicles are plugged in.
- Train drivers on your smart charger’s user-facing app so they can monitor charging status and stay efficient.
Great charge point operators are backed by a powerful EV charging platform. Having someone in your organization well-trained on your EV charging platform will keep your bills down, improve the granularity of sustainability reporting and expedite compliance reporting, a win all around.