Passenger Vehicle Fleets: The Time for Electrification is Now
April 29, 2022 | by Cameron Wolf
Electric vehicles have been around for over a century; in 1901 a third of all cars were electric according to the US Department of Energy¹, but fleets have only recently started to electrify.
Why has it taken so long for the vehicle electrification renaissance? It’s apparent that electric vehicles have many advantages over traditional gasoline-powered vehicles, but there are a few barriers to adoption. For instance, EVs have a higher initial purchase price than gasoline-powered vehicles, yet they offer substantial savings over the lifetime of the vehicle in fuel and maintenance costs. EVs typically have a shorter range than gasoline-powered vehicles, which may be a concern for fleet managers who need their vehicles to be able to travel long distances. However, with the advent of fast-charging technology, EVs are becoming more and more viable for long-distance travel.
Be that as it may, year end data from 2021 has done a lot to suggest that these inhibitors are becoming a thing of the past, with year over year EV market share doubling from 4.11% in 2020 to 8.57% in 2021:
https://electrek.co/2022/02/02/global-market-share-of-electric-cars-more-than-doubled-2021/
While personal use vehicles are undoubtedly an important step towards the mass adoption of electric vehicles (EVs), it's commercial vehicles, in particular, that will help the electro-mobility revolution reach its full potential.
Passenger vehicle fleet owners are as spoiled for choice as their medium and larger vehicle counterparts, with over 55 different passenger model types/variants currently available or about to become available for purchase, there's something for everyone.
Let's build a scenario:
A California-based pharmaceutical fleet manager is looking to buy 15 EVs to save on skyrocketing fuel costs. It's widely known that EVs can save on fuel costs but the purchase price usually far exceeds regular gas vehicles. It’s a struggle to justify the extra investment required to acquire EVs.
However, while the initial upfront cost may be high, it’s important to understand the complete picture. Let's take a look at the average drive a sales rep at this pharmaceutical company drives, per day:
Typical Workday: ~200 miles
Working hours: 9a - 5p
Downtime hours: 6p - 8a
Fueling: 3x per week at $40 per tank
Using this knowledge, the fleet manager could look to purchase any EV with a range of 230+ miles. Today 99% of available EVs can achieve this. We will assume they are interested in the 272 mile range 2022 Tesla Model 3.
15 Model 3's may seem like a steep cost, but when fuel savings and rebates are applied, it ends up completely changing the equation. Since the sales reps only drive ~200 miles a day, no on-road charging is required. This allows for 8 straight hours of driving, and the remaining 16 hours of downtime can be used for charging. 9 PM to 5 AM are typical off-peak hours for electricity, so that also ensures rates will be as low as possible when refueling.
Taking all of this into consideration, the fleet owner will save $82,000 a year on fueling alone across their fleet of 15 vehicles.
For fleet owners operating in California there are even more substantial benefits as they receive Low Carbon Fuel Standard (LCFS) credits where they stand to generate a further $21,000 in cap and trade revenues.
Fuel Costs aren’t the only way to save
If we take a closer look at the total cost of ownership (TCO) of EVs, it's not just fuel where they shine. Electric vehicles have fewer moving parts than traditional gasoline vehicles, meaning they require less maintenance. Imagine the cost saving of no oil changes, transmission service, or other combustion maintenance². It all adds up.
Electric motors are also more efficient than gasoline engines, as they convert over 85 percent of electrical energy into mechanical energy, or motion, compared to less than 40 percent for a gas combustion engine. One pedal driving relies on regenerative braking, which can add range, reduce wear and tear on brake systems and even reduce driver fatigue.
This all adds up to savings on both operational and maintenance costs- two things that any fleet manager is always looking to reduce.
Don’t forget the environment!
It's not just the financials that make EVs an attractive proposition for passenger vehicle fleets. Electric vehicles are also much better for the environment. Companies looking to achieve carbon neutrality may find interest here, as electric vehicles emit no pollutants or greenhouse gasses, so they're much better for air quality. Electric vehicles are also quieter than ICE vehicles, so they reduce noise pollution. In the above scenario, it’s assumed that 32,612 gallons of fuel would be used annually in place of the 15 Teslas. That is 640,492 lbs or ~320 tons of CO2 generated. By adopting the 15 Teslas, it’s equivalent to planting 13,382 trees if a tree absorbs 48 pounds of CO2 per year! That achieves the same reduction in emissions as planting a 330 acre forest.³
Passenger fleets are ready to electrify. Are you?
Even if your fleet was not the first to go electric, it does not mean you missed the opportunity! There is an abundance of new information and statistics coming often, and now is a better time than ever to architect your plans.
Electric vehicles offer a number of advantages for passenger vehicle fleets, and those advantages are only going to become more pronounced as the technology improves. Electric vehicles should be a serious consideration for any passenger vehicle fleet manager.
If you’re ready to make the shift to electric, or looking to help someone you know make the shift, we are here to help. ZappyRide has been helping utilities, tier-1 auto manufacturers, fleet owners, and fleet management companies go electric for nearly 5 years now. Contact us today to find out how we can help your organization start the shift.
If you’re interested to see the exact calculations of this Fleet simulation, click here.
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¹https://www.energy.gov/timeline/timeline-history-electric-car
²"Electric Vehicles 101 | NRDC." 31 Jul. 2019, https://www.nrdc.org/experts/madhur-boloor/electric-vehicles-101
³Assumes 40 trees per acre