Guide to Fleet Transition from ICE to EVs

The push toward fleet electrification is no longer optional—it's being driven by government mandates and sustainability goals, even as businesses remain focused on their bottom line. For instance, the Delhi EV Policy requires fleets to purchase 100% new 2/3-wheelers as EVs starting in 2026. However, in markets like India, truly cost-effective EVs for fleet operations are still a few years away.

For most organizations, the decision to electrify fleets begins at the top, typically initiated by the CEO and handed down to the CFO. The CFO’s role is critical in evaluating whether EVs can sustain operational continuity without jeopardizing financial stability. A suboptimal purchase of commercial vehicles poses significant risks and can weigh heavily on the company’s financial health. To navigate this complex transition, a structured approach is essential.

The Six Stages of Fleet Electrification:

1. Initiation: The journey begins with a strategic decision—either driven by policy pressures or sustainability commitments made by the CEO or board. At this stage:

• A "Champion" is appointed to oversee the transition process.
• Targets and timelines are defined, ensuring alignment with long-term sustainability and operational goals.
• The organization sets a clear vision for electrification, balancing environmental impact and business objectives.

2. Trials: Real world trials are critical to understanding how EVs perform under specific operational conditions. If an end-client requires EV adoption, trials begin with those use cases; otherwise, use cases that don’t require en-route charging are prioritized. During this phase, vehicles are evaluated on:

• Range: How far the vehicle can travel on a single charge.
• Capacity: The weight it can carry without significantly reducing range (up to a 10% reduction in range is fine).
• Gradeability: Performance on slopes and inclines.
• Comfort: Driver experience and ease of operation.
• Reliability: Consistency in performance over time.
• Durability: Resistance to minor damages during operations.

3. Optimizing Procurement and Financing: Once trials validate EV performance, fleets move to negotiate costs and financing terms. Key factors influencing procurement include:

• Fleet credit rating and purchase volume.
• Choice between rental, leasing, or outright purchase models.
• Lock-in periods for contracts with OEMs or leasing companies.
• Maintenance agreements and charging infrastructure solutions.

While many fleets already own parking spaces, other aspects—such as maintenance costs and charging solutions—are heavily negotiated with OEMs, leasing companies, and charging operators. In some cases, public charger placement is also included in these deals.

4. Team Readiness: Transitioning from ICE to EVs isn’t just about switching engines or fuel types—it requires an overhaul of business processes across all levels of the organization. Training is essential to ensure smooth adoption:

• Drivers: Learn regenerative braking techniques, instant torque handling, range management, charging protocols, error reporting, and ticket raising processes.
• Maintenance Teams: Focus on error code triage, ticket raising workflows, and downtime reporting systems.
• Fleet Managers: Gain expertise in telematics analysis, route optimization, and Total Cost of Ownership (TCO) evaluation for EVs.
• Leadership Teams: Align strategic planning with long-term goals while managing stakeholders effectively and maintaining enthusiasm during the early phases of adoption.

5. Deployment and Monitoring: Once operations begin with EVs, constant monitoring is crucial to ensure smooth functioning and refine processes over time. Key areas of focus include:

• Driver experience and driving patterns.
• Charging behavior and energy consumption trends.
• Vehicle exterior damages and maintenance needs.

Data-driven insights from this phase help identify inefficiencies and areas for improvement while ensuring operational continuity.

6. Scaling Up: Scaling up involves renegotiating pricing terms with OEMs, charging point operators (CPOs), and financial institutions based on larger fleet sizes. Another critical aspect is phasing out ICE vehicles while managing their residual value since this directly impacts profitability. At scale, the economics of EV operations will differ significantly from pilot programs as efficiencies improve with volume. While the exact process may vary depending on fleet size (small vs large) or type (cargo vs passenger), these six stages form the foundation for any successful transition.

The Road Ahead

The transition from ICE to EVs is no longer a question of "if" but "how efficiently" it can be achieved before external pressures dictate the pace. Electrification isn’t just about adopting new technology—it represents a fundamental transformation of business operations that demands thoughtful planning, seamless execution, and alignment across all levels of an organization. For business leaders in the EV space, this transition offers not just challenges but also opportunities to redefine fleet operations for a sustainable future. The time to act is now—before the window for proactive change closes.