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The Car and Truck Fleet and Leasing Management Magazine

What's New with Plug-In Hybrid Electric Vehicles

While electric vehicles have captured the imagination of the public at large, fleets continue to lag behind. In every vehicle’s future, advocates see electric potential.

November 2014, by Lauren Fletcher and Chris Wolski

Electric vehicles, whether completely battery operated or hybrid-electrics, are among the “buzziest” vehicles on the roads today. And, while they have captured the imagination of the public at large, they have yet to find a widespread home in most fleets. That doesn’t mean they don’t have a future with fleets. It may just be that they have a longer road to travel.

“In the consumer market, we’ve moved beyond the early adopter phase. But, fleets are in the experimental phase,” observed Brandi Stensos, eco product leader at GE Capital Fleet Services. She added that there are fleets, however, such as GE that can be categorized as early adopters. But, for the most part, pure EVs are still only being added in very small numbers in most fleets deploying EVs.

At A Glance
Electric vehicles are making a comeback, and are being offered in several variations. Current trends include:

  • Building momentum in the fleet industry for the adoption of electric vehicles.
  • Increasingly updated vehicle charging options and speeds, including a growing network of DC fast-charging stations where appropriate.

“Even if an EV is on the selector, we are seeing most fleets deploying only a small number,” Stensos said.

The hurdle standing in the way of widespread adoption are the vehicles’ cost and the fact that there is still an unknown in regard to the technology, according to Stensos.

“What’s the level of difficultly factor in deploying the new technology — how much effort will there be and how much buy in will we get?” Stensos asked rhetorically. “Until we see more pilots be successful, I think it’s going to take some time for mass fleet adoption.”

Once a pilot is successful, Stensos sees adoption as gradual.

GE Capital Fleet Services Strategic Marketing Leader Brad Smith noted that fleet economics could also be a driver.

“The price of gasoline is a key driver as well as the price of batteries,” he said. “If battery prices continue to go down as expected, this will lead to more adoption.”

Underscoring the fact that electricity has become a viable power option for vehicles is that nearly all of the major automakers currently offer either an electric vehicle or a hybrid-electric.

While the exact future of electric vehicles in the nation’s fleets can’t be predicted with certainty, there is little doubt for the advocates of the technology — whether battery-electric or hybrid-electric — that the future is electric vehicles.

Defining Hybrid & Electric Vehicles

Hybrid-electric vehicles (HEVs), plug-in hybrid-electric vehicles (PHEVs), and all-electric vehicles (EVs) — also called electric drive vehicles collectively — use electricity either as their primary fuel or to improve the efficiency of conventional vehicle designs. According to the U.S. Department of Energy, here are the details and differences:

  • Hybrid-Electric Vehicles: HEVs are powered by an internal combustion engine or other propulsion source that runs on conventional or alternative fuel and an electric motor that uses energy stored in a battery. The battery is charged through regenerative braking and by the internal combustion engine and is not plugged in to charge.

  • Plug-In Hybrid-Electric Vehicles: PHEVs are powered by an internal combustion engine that can run on conventional or alternative fuel and an electric motor that uses energy stored in a battery. The vehicle can be plugged into an electric power source to charge the battery. Some types of PHEVs are also called extended range electric vehicles (EREVs).

  • All-Electric Vehicles: EVs use a battery to store the electric energy that powers the motor. EV batteries are charged by plugging the vehicle into an electric power source. EVs are sometimes referred to as battery-electric vehicles (BEVs).

Looking Back to See Ahead

Mike DiNucci, SVP of sales for ChargePoint, a manufacturer and provider of electric vehicle chargers noted that electricity saw its first widespread use in vehicles in the ’90s — the 1890s.

“In the 1890s, there were three fuel choices — steampower, diesel, or electric. At that time, seven out of 10 vehicles were electric power, and were popular for the same reason they are valued today, they were quiet, easy to start, and safer,” DiNucci said.

Gasoline eventually won out when Henry Ford introduced the Model T in 1915, which could be mass produced and was more affordable for the average consumer.

Prior to Ford’s introduction of the mass-produced Model T, all vehicles, no matter the fuel type, were hand built and expensive, and were the equivalent in price of private jets today, DiNucci noted.

While electric vehicles may have disappeared for several decades, there was always interest in the background and the technology was kept alive through technological enthusiasts such as those who make up the ranks of the Electric Automobile Association (EAA). The group, which was founded in 1967, has been experimenting with the technology for decades, and its efforts helped move the electric vehicle industry forward.

“We pioneered some of the earliest DC motor speed controllers, and one of those innovations went into production and is still in production today by a company called Curtis in Mt. Kisko, N.Y.,” said Ron Freund, chairman of the EAA. Today, the group has about 75 chapters with 16 in California.

While the number of electric vehicles on the road in general is still relatively small compared to their gasoline-powered cousins, Freund noted that what is significant is the speed of the sales of the new technology.

“What has happened in the past four years when the Nissan LEAF was released is phenomenal. There are 100,000 electric cars in the state of California and 250,000 nationwide. Compared to the overall census, it’s a drop in the bucket, but the point is the change has been so quick,” Freund said.

DiNucci of ChargePoint noted that, in San Francisco — one of the epicenters of the EV market and hybrid market —10 percent of vehicle sales in recent months were for plug-in vehicles.

By the Numbers

  • 48,208 Hybrid-Electric Vehicles Sold in August 2014
  • 12,403 Plug-In Electric Vehicles Sold in August 2014
  • 5,920 Plug-In Hybrids
  • 6,483 Battery Electric Vehicles
  • 78,809 Total Plug-In Electric Vehicles Sold through August 2014

Plotting Fleet’s Future

While consumers are continuing to buy electric and plug-in vehicles, and fleets have yet to match this enthusiasm, there is building momentum.

“Major fleets are starting to make the switch in a big way and we see that as a huge source of growth for the industry going forward,” DiNucci said. “We believe this is for the same reason it makes sense for a consumer to make the switch to a car with a plug: the cost, the ability to drive in an HOV lane in some states, and the environmental benefits. So, if you have a sustainability initiative from a fleet perspective or need to get emissions down or you would like to reduce your carbon footprint, then driving a car with a plug makes incredible amount of sense.”

Maintenance is another way that fleets are saving money, according to Freund of the EAA.

“Fleets can save a ton of money by going electric,” Freund said. “The technology is there and it’s real.”

However, there are times when an EV, no matter all of its various advantages, is just not the answer. Stensos of GE Capital Fleet Services noted that driver territory is often the deciding factor.

“There are some truly high-mileage drivers in the commercial space, who frankly drive too many miles for an EV to work for them,” she said. “Pure EV is still in that 20,000 mile per year range.”

Plug-in electric hybrids are another option for fleets that want the benefits of electric vehicles and the convenience of tried-and-true gasoline technology.

But, there are a number of factors that need to be considered when a fleet adopts plug-in vehicles, according to GE Capital Fleet Services’ Smith, and not all of them are strictly technological.

“You have to accurately and strategically select which drivers you’re going to put in those vehicles,” he said. “The propensity or the openness of the driver to operate the plug-in vehicle is one important aspect. Another important aspect is their ability to charge the vehicle. Public charging stations are increasing in number, which will help tip the scales.”

Challenges may manifest in a number of ways, Smith noted. For instance, charging may be difficult if the driver lives in an apartment without ready charging access or an old home in which installing a charger could be cost prohibitive, or the driver is simply resistant to the technology itself.

Plug-in hybrid technology could be a particularly good choice for truck fleets.

“Hybrids for truck fleets are a good choice, because once you get your load moving, you only need about 10 percent of the power to keep it moving,” Freund said. “Electric motors climb hills real well. Fleets will see this and go hybrid because that’s a baby step. You’re adding electrification in one form.”

Making the Numbers Work

EVs and plug-in hybrids have one thing working against them: up-front cost. The tipping point for the commercial fleets to add EVs and plug-in hybrids won’t necessarily be how inexpensive it is to operate the vehicle.

Christine Smith, vice president of sales and marketing for Zenith Motors, acknowledged that this is a hurdle, but one that is usually overcome with an analysis of the numbers.

“It’s about educating potential fleet customers about the total lifecycle costs as opposed to the intial costs,” Smith said.

Zenith Motors, which was founded in 2011, provides electric vehicles based on the Ram ProMaster. Fleets currently using the Zenith vehicles are local county governments, hotels, and parking facilities.

“Right now, most fleet managers, even if they are measured on carbon emissions or have a sustainability goal, aren’t going to pay 15-20 percent more per vehicle, particularly if they are buying a large quantity of them, so these vehicles need to be straight across neutral from regular vehicles. I think that will be a real tipping point,” DiNucci said.

Freund points to the fuel-cost savings. “The financial incentives are not there, but if people work through the numbers, they’ll see that this is quite worthwhile,” said Freund, who has owned an electric vehicle since 1998 when the technology was still relatively primitive with top ranges of less than 50 miles. Freund noted electricity has remained relatively stable, while traditional fossil fuels have varied in price wildly.

Reduced fuel costs aren’t the only savings. “There’s the maintenance cost savings, as well,” Smith noted.

Charging Ahead

Charging a vehicle is probably the biggest change that consumers and fleets alike have to get used to, but DiNucci noted that, for users who are now used to plugging in their phones and laptops, it’s an obvious evolution.

“What I like to say is that the EV industry today is about where the cell-phone industry was in 1989. It existed, but the adoption wasn’t huge because it was expensive — the batteries were expensive, the phones were expensive — they were big and clunky.”

DiNucci noted that widespread adoption of electric and hybrid vehicles is reliant on the same factors that pushed cell phone adoption, the batteries need to get smaller, denser, cheaper, and the charging network needs to get better.

“At the moment, the electric vehicle industry is still a niche,” he said.

Stensos of GE Capital Fleet Services agreed, noting that the game changer for EVs will be an inexpensive, high-capacity, affordable battery that can deliver 300 miles or more in range. “Then it’s a whole new ballgame,” she said.

While batteries are steadily improving, DiNucci noted that it’s another piece of technology that may already be the key to widespread adoption.

“One of the major reasons why the electric vehicles of the 1990s didn’t work, a single common connecter wasn’t chosen, but this time around a common connector was selected,” DiNucci said.

Charging stations are evolving with the vehicles. Charging stations in and of themselves are a rather simple piece of technology, according to DiNucci. What will add value for fleets, in particular, is the ability to monitor the charging status of the vehicle, including reporting abilities.

DiNucci noted that most fleets will only need Level 2 chargers — about 18,900 of ChargePoint’s 19,000 charging stations are Level 2 — though the availability of Level 3 also known as DC Fast Chargers, may also help spur adoption up to a point.

“We do think DC Fast Chargers will be an important factor in spurring adoption, however, it only makes sense in certain applications,” DiNucci said. “Putting one in at a workplace doesn’t make sense because people are not going to wait around for 20 minutes for the vehicle to charge and they won’t come out of their office in 20 minutes to get their vehicle, they’re probably going to wait a couple hours. The places where fast charging makes the most sense No. 1 is at a highway rest stops. The second place it makes perfect sense is in fleets — taxis, delivery vehicles, or any type of fleet — having a DC Fast Charging station or several stations where you have an attendant switch out the vehicles to quickly recharge them makes an incredible amount of sense.”

DiNucci believes that the fast charging market will be a growth area for the company over the next year.

Gazing into the EV Crystal Ball

What is the future of electric vehicles?

“My crystal ball is quite clear. The cost of gasoline will fluctuate wildly. If you look at the cost of producing electricity it has only fluctuated about one percent since 1976,” Freund said. “In the future, I see with almost 100-percent certainty, batteries will get better. There will be more use of it because its more effective and there’s less moving parts. The smart money is on electrification.”

One of the future drivers of widespread adoption will most likely be the types of vehicles that are available, noted Smith of GE Capital Fleet Services.

“What larger vehicles will be offered as EVs in the future? Will it be cargo vans and service/delivery trucks? Between that and the passenger vehicles, that’s a niche that could spur some adoption,” he said.

DiNucci believes that it may take a few decades for the world to become completely electrified, but he predicts that “eventually every vehicle in the world will have a plug. I don’t know what the winning technology will be — hydrogen, biodiesel, flex fuel — but I know that the loser is going to be fossil fuels.”

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Comments

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  1. 1. george [ December 29, 2014 @ 06:10AM ]

    "And, diesel won out when Henry Ford introduced the Model T in 1915, which could be mass produced and was more affordable for the average consumer." The Model T was actually powered by ethanol or gasoline, not diesel fuel.

  2. 2. Philipp Gelse [ August 21, 2015 @ 09:26AM ]

    Hello!
    I am currently working at the Fraunhofer Institution in Germany for a research study which is dealing with the increasing requirements for software which has to manage electric vehicles within a fleet. This is a 5-min survey about this topic.
    Every participant who knows something about fleet management is welcome!
    https://docs.google.com/forms/d/15m58gp01PyLAVxGILzSl4k9IdL88o8mYRKDcaELQ05k/viewform?usp=send_form

    Best regards and thank you in advance!

    Philipp Gelse

 

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