Don’t expect hockey stick-like growth next year for EV registrations in fleets. Consider 2022 as a planning year and a gut check for fleets as they begin to understand the massive undertaking that electrification really is — particularly when it comes to charging infrastructure. - Baka Mobile photo via Sass Peress, Renewz Sustainable Solutions Inc./Wikimedia Commons

Don’t expect hockey stick-like growth next year for EV registrations in fleets. Consider 2022 as a planning year and a gut check for fleets as they begin to understand the massive undertaking that electrification really is — particularly when it comes to charging infrastructure.

Baka Mobile photo via Sass Peress, Renewz Sustainable Solutions Inc./Wikimedia Commons

The pace of change only seems to accelerate, doesn’t it? This year topped them all. Nothing like a global pandemic and supply chain crisis to shock us out of old norms and ram home the need for greater efficiencies in processes and business practices like never before.

These macro forces brought an avalanche of breakthroughs, partnerships, and product launches that promise to revolutionize fleets. Yet in trying to parse the technology, it’s becoming increasingly harder to find the signal in the noise.

Here’s a look behind this year’s trending stories in electrification, mobility, and transportation tech. Some will come to fruition for fleets in 2022, while many will only start to germinate. Others might have to wait a while. But all are worth keeping an eye on.

2022 sees a faster pace of new EV model rollouts, but it’s not the year for widespread fleet adoption.

Electrification is likely to be the biggest phenomenon in fleet for the next 10 years. Yet while EV fleet registrations may have quadrupled in the past three years, their overall share still isn’t close to 1% of total fleet registrations. Don’t expect hockey stick-like growth in 2022, as the sheer volume of news and activity regarding EVs still significantly outweighs the number of actual EVs in fleets.

Consider 2022 as a planning year for EVs and a gut check for fleets. Their process of understanding just how massive the undertaking of fleet electrification really is, particularly with charging infrastructure, is only beginning.

Government fleets, particularly on the West Coast, are much further along the implementation path because of looming regulatory mandates and available grant monies. Corporate fleets are accelerating their plans with pressure from leadership on ESG (environmental, social, and corporate governance) directives.

Commercial and vocational fleets eager to ride the wave of new commercial EVs will have to wait a bit longer. New electric commercial models will only begin to hit the beachheads in 2022, with wider availability the following year.

Business models for autonomous transportation will come into sharper focus.

While the autonomous market is still very much in tech development/pilot phase, the various business models to deploy commercially viable autonomous services, particularly on the trucking side, are starting to coalesce — though with different timelines for adoption.

Some AV companies are working closely with major truck OEMs to engineer redundant autonomous chassis at the factory, and they’re communicating a longer timeline for commercial deployment. Others are designing bolt-on systems for aftermarket installation that run on confined, repeated middle-mile routes — and bring a potentially shorter timeline for commercial use.

Other autonomous players are taking an interim approach with technology that can be deployed now with “driver in” systems that work like Tesla’s Autopilot, only for trucks. The driver still controls the truck but can take advantage of ADAS features such as adaptive cruise control and lane centering in which the truck can slow down, speed up, and maintain its lane on its own.

And then there’s the question of which entity carries the goods: Some are pushing Autonomy as a Service, in which shippers contract with carriers that specialize in running their own autonomous trucks, while others expect traditional carriers to buy the autonomous trucks and deploy them within their existing fleets.

Another debate centers on whether autonomous trucking should have a dedicated highway lane. A seemingly reasonable option, many see this as an inhibitor to wider adoption. The Southwest corridor, with more favorable weather and state regulations, will continue to be autonomy’s proving grounds.

These differing new models bring conflict, as some autonomous companies push a condensed timeline for adoption that others feel is unrealistic.

Meanwhile, the action in the robotaxi market is developing at a slower pace, at least in the U.S. Keep an eye on China, as jurisdictions have been willing to allow rollouts of driverless services at greater scale.

Mercedes’ Drive Pilot system, set to launch in Germany next year on the C-Class, works at speeds of up to 60 km/h (37 mph) in heavy traffic or congested situations and allows the driver to send emails, surf the internet, “or relax while watching a film.”  - Photo courtesy of Mercedes-Benz

Mercedes’ Drive Pilot system, set to launch in Germany next year on the C-Class, works at speeds of up to 60 km/h (37 mph) in heavy traffic or congested situations and allows the driver to send emails, surf the internet, “or relax while watching a film.” 

Photo courtesy of Mercedes-Benz

Hertz’s Tesla deal hits the realities of getting EV infrastructure done.

Independent of the supply chain crisis, Hertz’s move to fleet 100k Teslas by the end of 2022 was the biggest story in car rental this year. The announcement had market-rippling effects and sent a jolt to the car rental industry that it’s time to get serious about electrification. Intended effects achieved.

Now comes the task to not only source those 100k Teslas (the largest Tesla order ever), but also plan and install the charging infrastructure on airports and neighborhood branches. Ask any public or private organization going through the electrification process, and they’ll tell you infrastructure is by far the biggest challenge.

For Hertz, the task is magnified as it must deal with layers of administration at airports, which have a slightly different electrification path that must include the needs of the airport, other rental companies and vendors, and the consumer. They’ll need to work with utilities on upgrading transformers, implement systems to manage load factors, contract charge point vendors, and jackhammer a lot of concrete. 

When 2022 is in the books, the number of Teslas available to rent will most likely be far fewer than originally stated — and Hertz should be applauded for blazing this trail.

Drones won’t be ready for prime-time next year, but the needed infrastructure is coming together.  

Drones used for package deliveries are still three to five years away from widespread commercial viability, according to intel gathered at the recent CoMotionLA, a conference for cities and mobility stakeholders. Yet the percentage of exhibitors at the show dedicated to drones showed that the market is developing apace behind the scenes.

Getting the drone market off the ground, so to speak, isn’t dependent on advancements in tech. Relatively inexpensive off-the-shelf drones can deliver 5-to-9-lb. packages right now in a financially viable model. It’s the regulatory environment — the infrastructure needed to support safe drone aviation — that must evolve.

The action is in developing (acronym alert!) beyond visual line of sight (BVLOS) operations for unmanned aerial vehicles (UAVs), a drone traffic control structure (called Unmanned Aircraft System Traffic Management, or UTM), and automated processes such as smart mailboxes that can accept drone packages.

When drones do reach the mainstream, expect meal deliveries to latch on quickly, as drone companies are already offering a better price structure to restaurants than Uber Eats. Ultimately, pilotless (gulp) robotaxis in the sky will take humans on short hops and longer trips.  

The attrition in the independent EV maker market will begin.

Fleet electrification has created a new Wild West of independent EV makers and has brought a Gold Rush of engineers, marketeers, and venture capitalists to the space. Reducing the number of moving parts in an ICE vehicle from 2,000 to about 20 in an EV allows upstarts to create electric skateboard chassis much more easily than they could manufacture traditionally fueled vehicles.

Each new manufacturer is approaching the market slightly differently and has promising proprietary tech. But tech is a secondary concern compared to their abilities to manage cash burn while scaling production.

Each EV maker will need millions in non-production general and administrative costs, millions more for R&D, and millions on top of that to ready factory production. Are revenues from sales of 5k units in year one to 25k units in years three and four enough to satisfy investors and keep the lights on, let alone make a profit? Lordstown Motors, with a ballyhooed head start, is still trying to answer the question.

There will be winners in the independent EV maker horserace, but more losers — particularly as the major manufacturers, with access to billions in investment capital, roll out their competing EVs.

Automakers become EV service providers.

Fleet electrification the right way involves a comprehensive plan that starts well before a vehicle is bought. It involves organizing and accessing charge points in depots, at homes, and in public, assessing duty cycles and drivers’ personal situations, dealing with utilities, setting up software management systems, and analyzing the right metrics to minimize costs.

Realizing fleets need their hands held on these issues, the biggest automakers have rolled out service divisions to accelerate the electrification process. Ford bought Electriphi to create Ford Pro Charging within the Ford Pro suite of product and services.

Also this year, General Motors and BrightDrop rolled out the Ultium Charge 360 fleet charging service, which will connect fleets to services surrounding infrastructure planning, financing, and fleet and facility management tools.

Free2Move, part of the Stellantis group, is offering fleet management and data services that will help fleets analyze the use cases ideal to make the EV transition, estimate charging requirements, and then use data to optimize EV performance.

These services integrate with automakers’ own telematics and data tools to analyze charging and energy management for commercial customers. There is a plethora of third-party services to do the same, though automakers have a head start with already established fleet contacts.

Fleet adoption of digital key technology accelerates.

As the auto industry has almost fully migrated from bladed keys to key fobs, the next technology horizon is the digital key, which dispenses with key fobs for smartphones.

There are obvious use cases in vehicle sharing and the high-pressure world key management in delivery fleets. Fluid Truck has dispensed with physical keys entirely and has created its own keyless system for its fleet of peer-to-peer rental trucks.

Other uses are less apparent but important to fleets: For instance, GPS and remote lock/unlock functionality can facilitate the delivery of goods directly to a vehicle without the driver needing to be at the vehicle. Service technicians won’t need to detour to the warehouse for parts. Salespeople don’t have to wait at home to receive supplies. Other services, such as cleaning and maintenance, can be handled similarly.

The market is growing with third-party aftermarket solutions along with factory-equipped digital key functionality that is integrated into the electrical architecture of the vehicle.

When drones become commercially viable, Zing is ready. The company’s business model makes an attractive case for restaurants that want to dump Uber Eats and Doordash. - Photo by Chris Brown

When drones become commercially viable, Zing is ready. The company’s business model makes an attractive case for restaurants that want to dump Uber Eats and Doordash.

Photo by Chris Brown

The 3G sunset won’t be delayed, despite growing protests.

Considering previous delays, might AT&T’s sunset of its 3G network be pushed back from its planned shut-off date of Feb. 22, 2022? There were rumblings, particularly from the alarm industry, which petitioned the FCC for a delay. The industry is worried it won’t have security, fire, and personal medical alert systems upgraded to a new network in time. Some law enforcement agencies using monitoring devices to keep track of offenders say they may not be able to upgrade in time too.

According to various sources, the sunset will go forward as planned, though likely in a phased approach with voice first and then IoT/data. The sunset will start in less populated regions and then move to larger populated areas by the end of the year. Verizon is still on track for its sunset on Dec. 31, 2022. 

That may buy fleets that are behind in upgrading their telematics hardware a bit more time past the Feb. 22 date. But if you haven’t even made your plan, watch out — supply chain delays for hardware could push you into the red zone, even with the extra time.

Autopilot systems move from Level 2 to 3 — and fleets have some decisions to make.

While the timeline for full (Level 4) autonomous driving seems to stretch further into the future, automakers are introducing increasingly sophisticated Level 2 and Level 3 automated systems in passenger cars and now commercial vans. With increasing sophistication, automatic emergency braking paired with adaptive cruise control and lane centering allow for automated Level 2 driving on prequalified roadways.

While previous systems require drivers to keep their hands on the wheel, such as Tesla’s Autopilot, newer systems don’t have this requirement.

Mercedes is moving further into Level 3 with the launch of its Drive Pilot system in Germany next year on the C-Class. Mercedes is straying even further from a driver attentiveness message. At speeds of up to 60 km/h (37 mph) in heavy traffic or congested situations, Drive Pilot allows the driver to send emails, surf the internet, “or relax while watching a film.” 

Tesla itself is ostensibly releasing tech that’s contradictory to its hands-on-wheel rule: A recent over-the-air update came with three games that can be played on the EV’s touchscreen by a passenger or the driver — while the car is in motion.

These options are easily avoidable by fleets today. But as costs come down and these systems become more ubiquitous, fleets will have to consider their efficacy and whether they promote safety or dangerous complacency.

Over-the-air updates light the match for new services.

As cars — particularly electric ones — are now computers on wheels, over-the-air (OTA) updates are a crucial tool used to upgrade aging drive control systems, improve infotainment features, and deliver security patches.

OTA updates will take on the flair of Steve Jobs revealing a new Apple product. For Tesla, they’re a way to push the envelope with greater levels of autonomous driving. Ford and GM now push new tools for their own commercial telematics solutions.  

By 2030 Stellantis plans to generate $22 billion through 34 million “monetizable” connected vehicles. They’ll sell software services and subscriptions around geolocation, infotainment, vehicle service scheduling, driver assistance, and concierge services.

As revenues from new car sales diminish and automakers seek recurring revenues, fleets will need to decide whether to allocate new budget for services that deliver real value.

Author

Chris Brown
Chris Brown

Digital Editor

As editor of Automotive Fleet (digital), Auto Rental News, Fleet Forward, and Business Fleet, Chris Brown covers all aspects of fleets, transportation, and mobility.

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As editor of Automotive Fleet (digital), Auto Rental News, Fleet Forward, and Business Fleet, Chris Brown covers all aspects of fleets, transportation, and mobility.

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