Climate change and sustainability are dominating discussions in the transportation industry. The transportation sector is a major contributor to greenhouse gas emissions, making commercial fleet electrification an important consideration for businesses and municipalities. The adoption of electric vehicles and fleet electrification can play a significant role in reducing harmful emissions which in turn improves air quality and public health. Additionally, electric fleets also reduce fuel and operating costs for organizations and municipalities.
We’ll take a look at the benefits of fleet electrification, along with the common challenges.
What is Commercial Fleet Electrification
The standard definition of commercial fleet electrification is the process of replacing vehicles with ones powered by electricity. Commercial fleet electrification can include replacing a range of vehicles from passenger cars and trucks to buses and delivery vehicles.
Benefits of Fleet Electrification
Here’s a look at some of the common benefits associated with electric fleets.
A primary benefit of fleet electrification is the reduction of greenhouse gas emissions. According to 2021 IEA data, the transportation sector has the highest reliance on fossil fuels, accounting for 37% of CO2 emissions.
In comparison, the U.S. Department of Energy reports the national average of annual emissions for an all-electric vehicle is 2,817 pounds of CO2 equivalent. In contrast, 4,824 pounds for a plug-in hybrid, 6,898 pounds for a hybrid, and an astounding 12,594 pounds of CO2 equivalent for a gasoline-powered vehicle. Electric vehicles (EVs) are a cleaner and more sustainable method of transportation.
Along with reducing carbon emissions, electric fleets can help reduce organizations’ dependency on fossil fuels. Since EVs are powered by electricity generated from a variety of sources like wind and solar power, they are also a more sustainable form of transportation.
Electric fleets also help improve air quality and public health. Unlike traditional fleet vehicles, EVs do not emit harmful pollutants like nitrogen oxides, and volatile organic compounds, which can have negative impacts on air quality and public health. An article published in PNAS states, that internal combustion engine trucks account for only 10% of vehicles on the road in the U.S., but they produce 45% of total nitrogen oxide emissions from vehicles and 57% of particulate matter 2.5. Low-income and minority communities living near ports, warehouses, and highways are the most affected populations.
Adopting electric fleets can go a long way to improving air quality and reducing the negative health impacts on communities.
The benefits of fleet electrification extend to reduced operating costs. Electric fleets are less expensive to maintain and operate. Along with fuel and maintenance savings, transitioning to an electric fleet can also promote job growth, improve brand reputation, and allow organizations to take advantage of government incentives that can include tax credits and exemptions.
Fuel savings are one of the primary ways businesses can reduce costs.
A three-month study by Car and Driver shows that a Ford F-150 consumes $8,325 of gasoline (September 2022) to travel 45,000 miles, while the Ford F-150 Lightning consumes only $4,529 of electricity (September 2022) to travel the same 45,000 miles.
EVs also require less maintenance than traditional vehicles due to having fewer moving parts. You don’t need to worry about scheduling and paying for oil changes, resulting in additional savings. A study by Consumer Reports notes the typical total ownership savings over the life of most EVs ranges from $6,000 to $10,000.
Brand Reputation Benefits
Transitioning to an electric fleet can boost brand reputation by highlighting the organization’s commitment to the environment and sustainable practices. EVs are generally viewed as environmentally friendly vehicles and companies who prioritize sustainability can attract consumers and investors that support eco-friendly practices.
Adopting clean energy strategies can also help businesses build brand loyalty and trust with consumers which often translates into a boost in revenue and a larger market share.
Vehicle-to-Grid (V2G) Benefits
V2G technology can help businesses reduce operating costs and bring in additional revenue. Vehicle-to-grid technology allows electric vehicles to store excess energy in their batteries and return it to the grid when demand rises.
Not only can the technology help organizations save on energy costs, but they may also be able to sell the excess energy back to the grid. The technology helps to improve grid stability and reliability.
However, not all EV batteries have storage capabilities but as the technology becomes more common this is expected to change.
Government Incentive Benefits
Costs associated with transitioning to an electric fleet can present challenges. However, government incentives such as tax credits, rebates, or grants can help offset some of the upfront costs.
Taking advantage of these incentives, both at the federal and state level can make transitioning to an electric fleet more feasible.
One of the first questions we receive from any new client is whether there are incentives or rebates they can take advantage of. When we talk about incentives and rebates, we pull our affiliated company, Incentive Rebate360 into the conversation. No matter your EV charging needs we have you covered.
Jobs and Economic Growth Benefits
Fleet electrification can stimulate economic growth in the renewable and clean energy sector. The growing demand for electric vehicles is helping to create new jobs both in the manufacture of EVs and maintenance. Production and distribution of electricity is also experiencing a growth in available jobs.
Stimulating growth in the clean energy sector can have a ripple effect throughout the economy. An IEA report estimates that transitioning to clean energy will lead to 14 million new jobs by 2030, compared with 5 million jobs lost in the fossil fuel sector.
Challenges of Fleet Electrification
Along with the benefits of fleet electrification, there are also challenges. One of the challenges fleet electrification businesses often face is the upfront costs. Even though the long-term savings can be substantial, the purchasing price for electric vehicles can be daunting.
A study by Consumer Reports finds that comparing vehicles of similar size and segment, an electric vehicle can cost around 10 percent to over 40 percent more than its gasoline-only counterpart. While prices are expected to decrease in the coming years, it still presents a challenge for businesses.
Other challenges include range anxiety, charging infrastructure, and available electric vehicles. The nation’s charging infrastructure is expanding but it still presents challenges, especially in rural areas. Auto manufacturers are still producing a limited number of electric fleet vehicles, adding to the challenges organizations face as they work toward fleet electrification.
We Can Help You Overcome the Challenges Associated with Fleet Electrification
Are you ready to start transitioning to an electric fleet? Is your organization facing challenges? Contact Apogee Charging Solutions and let us help you plan a strategy that allows your business to meet these challenges. Call 484-816-2076, email [email protected], or schedule a call that fits your needs by clicking the button below.
Reference: Exro Technologies Inc. (2023). What Is Fleet Electrification? What Are Its Benefits and Challenges? https://www.exro.com/industry-insights/what-is-fleet-electrification-benefits-and-challenges