Can EVs Boost Fleet Operations?

In this article, we look at a few ways to determine the Total Cost of Ownership (TCO) of fleet electrification by reviewing affordability, the environmental impact, uptime, maintenance and repair, and fuel cost.?

As a former fleet owner/operator, I understand the need to find efficiencies and reduce expenses while increasing productivity. It can mean the difference between staying in business or not. I am also familiar with the vehicle acquisition cost being a big challenge. This article will examine some of the operators' key initiatives in running fleets to determine if an EV strategy can help.

Affordability: The Upfront Cost Consideration.

The upfront cost is usually more for an electric vehicle than an internal combustion engine. That alone can deter the fleet operator from going electric. Fortunately, The Inflation Reduction Act's (IRA) passage offers incentives for clean commercial vehicles up to$40,000. That could help offset the upfront cost of purchase. The current EV incentive schedule by GVWR is below, but this could change before it goes live on January 1, 2023. Make sure you are using experts in this

area to determine actual reimbursement dollars for your fleet. It's certainly worth doing the effort. This is just one of many considerations. Let's take a look at a few more below.

Environmental Impact: The Commitment to Sustainability.

There is an opportunity cost of going electric with the environmental brand image you create that drives loyalty with customers interested in your commitment to sustainability. According to Kellogg Insights, becoming an industry environmental pioneer can strengthen a company’s appeal among potential customers, ultimately serving the business’s bottom line and market share.

Fleet Uptime: Impact on Operating Cost.

If fleets cut operating costs, it can be a competitive advantage. EVs have automated safety and security measures in place to manage the fleet vehicle driver's operating behavior and extend the asset's useful life through predictive maintenance. Constant monitoring of fleet vehicles by the EV vehicle’s onboard technology, communicated in real-time to the fleet depot, can reduce catastrophic incidents. This real-time actionable data is the backbone of proactive maintenance, keeping the fleet vehicles out of the shop and on the road longer. An advancetech.com research study shows predictive maintenance can yield cost savings of 18% to 25%.

Maintenance and Repair: The Moving Parts Story.

The EV repair cost reduction analysis centers around an EV with fewer moving parts than an ICE vehicle. A report by mikealbert.com suggests an EV is more dependable and cheaper to maintain since it has only 20 moving parts, whereas an ICE vehicle has an average of 2000 moving parts. Because of this, the EV fleet vehicle tends to last longer and go more miles. In some cases, almost twice as long as an ICE powertrain. According to the?US Office Of Energy Efficiency and Renewable Energy, ICE vehicles average 10.1 cents per mile for scheduled maintenance costs, while EVs average 6.1 cents per mile.

Calculating Potential Fuel Savings: Let’s do the Math.

There are many factors to consider when verifying if EVs can save in fuel expenses for your fleet. We will do the math here with averages but show the calculation so you can do the actual math with your numbers.

First, the EV formula:

1.????The Battery stated Range / The Battery kWh

2.????The Battery kWh size / Your cost Per kWh = Cost per Range

3.????Your Cost per Range / The Vehicle "Actual" Driving Range??= EV Cost per Mile

The Average EV Data for a transit fleet van, not Actual:

1.????126 miles with a 68kWh battery

2.????68kWh * $0.15?= $10.20

3.????$10.20 / 110 Miles??= $.09 per Mile

Let’s compare that EV cost per mile to a medium-duty fleet. We will use an average of 9.73 miles per gallon found in a fleet fuel study by J.D. Power. We will also use the AAA national average of $3.90 per gallon fuel cost.

The ICE Formula:

1.????Miles Driven / Vehicle Mpg??= Gallons used

2.????Gallons Used * Cost Per Gallon = Cost per Range

3.????Cost Per Range / Range?= ICE Cost per Mile

The Average ICE Data, not Actual:

1.????126 / 9.73mpg??= 12.94 gallons used

2.????12.94 * $3.90??= $50.46 Total Cost

3.????$50.46 / 126 = $0.40 per mile

These calculations suggest a $0.31 fuel cost savings per mile but remember these are average inputs, not actual. You can repeat this with your actual numbers and get a more accurate comparison for your fleet.

Summary:

With the goal of cost savings through operating efficiencies, EV vehicles have the eye of fleet operators. They are looking to quantify the impact of electrification on their fleet in the short and long run by doing their due diligence. The goal is to determine the true cost savings electrification can have on their operations. Researching the actual numbers with trusted partners can help determine if electrification computes for fleets.

Happy Fleeting,

The EV Guy