Attendees had the opportunity to drive VIA’s delivery van in Columbus. While the van’s regenerative braking can be set to different concentrations, fleet drivers will learn that full regen is the only way to go. - Photo: Chris Brown

Attendees had the opportunity to drive VIA’s delivery van in Columbus. While the van’s regenerative braking can be set to different concentrations, fleet drivers will learn that full regen is the only way to go.

Photo: Chris Brown

If you were in fleet 10 to 12 years ago, you’d remember Electrification 1.0. At the annual NAFA conference back then, you may have grabbed literature from the booths of any of the first wave of electric vehicle makers and listened to their spiels.

Welcome to Electrification 2.0. Or is it 3.0? The stream is moving so fast, it’s hard to tell. But make no mistake — in terms of the improving battery technology, expanding manufacturing footprint, evolving infrastructure, new government funding, and the societal willingness to make the transition, we’re light years away from those early times.

The EV snowball effect was manifest in the seminars, hallways, and expo hall of the 2022 NAFA Institute & Expo in Columbus, Ohio. Certainly, there were more pressing issues to discuss around vehicle supply, parts shortages, and the high cost of everything. But electrification loomed large — as large as the solar EV charger from Beam Global that overshadowed the north side of the Columbus Convention Center.

The same challenges to fleet electrification from 10 years ago still exist today, but as the NAFA show floor confirmed, there is an ecosystem to support Electrification 2.0 that wasn’t in place before.

In addition to a new crop of upstart EV makers — along with the majors and their new electric models —were vendors with products and services around charging hardware, energy management, wireless charging, charging-as-a-service, data consultancies, and Beam’s solar charger. 

Fleet managers have the same questions as they did back then. Yet there were many more EV subject matter experts and fleet managers with actual EV experience to share knowledge with the newbies at this year’s conference.

Here are some of the questions raised, with a variety of answers:

How do I defray infrastructure costs?

The task of figuring out and setting up charging infrastructure is arguably the biggest obstacle to fleet electrification, and it’s the first thing fleets need to plan. For the uninitiated, the expense is often much bigger than anticipated.

But there is financial help, and that help is spreading beyond the Left Coast states and New York. Organizations like the Clean Cities Coalition network and Electrification Coalition will help fleets run the traps on grants, low-interest loans, and tax rebates in regional jurisdictions.

State programs fall mostly on the infrastructure side, with New Jersey, Maryland, and Connecticut rolling out financial aid for public and depot Level 2 and DCFC chargers.

Fleets in other states can turn to their utilities, such as Georgia Power and Duke Energy, for “make-ready” programs, which will help fund the work needed to get power to the chargers. Many more utilities need to step up in this arena, but these types of programs are a good start.

Infrastructure funding has been particularly strong for the public sector. Tonya Glass, who works in fleet for the Salt River Pima-Maricopa County Indian Community, said that the community spent $82,210 in infrastructure improvements and charger expense, and was able to secure $68,000 in a rebate from the Salt River Project Business EV Charging Program to almost cover the entire cost.

Do EVs really have lower operating costs?

Lower operating costs for EVs has been a working theory, in that EVs only have about 20 moving parts. In Columbus, fleet managers shared real-world data to back this up.

David Mesa, fleet manager for the City of San Jose, has been slowly expanding his EV fleet from the early years. Operating his electric sedans costs only $276 a year (minus charging costs) versus $3,850 for his ICE sedans. He runs Mitsubishi i-MiEVs, Nissan LEAFs, Hyundai Konas, and Chevrolet Bolts.

Al Curtis of the Cobb County fleet and Mario Guzman, who runs the City of Boynton Beach, Florida, have similarly low operating costs. Curtis has yet to change a set of brake pads on his Nissan LEAFs after 150,000 miles of operation.

During Electrification 1.0, battery life was a question mark. Would they turn into bricks in five years? They have not. These fleet managers reported little to no systemic battery degradation.  

Will I lose my shirt when I sell an EV?

Since Electrification 1.0, EV residual values have been notoriously poor. But with more aftermarket sales, public infrastructure buildout, and better vehicle specs, values are improving.

Today, the base range for new electric passenger models is 250 miles, while the coming wave of commercial EVs promises to have enough range — 120 to 150 miles — to accommodate most duty cycles. Those specs are not yet up to ICE range, but they’re manageable with charging in place.

The lack of vehicles in today’s market is having a positive effect on EV values as well.

Remember Mitsubishi i-MiEVs, the first-gen electric car with a top range of 70 miles that was discontinued in 2017? They’re going for $10,000 today, making that seemingly poor initial investment a surprisingly good one now.

Can I lease an EV, and run it for a longer term?

More stable residual values give lessors confidence to write both open- and closed-end leases for their clients. Based on lower maintenance costs, might fleets be able to run EVs past the usual 36-to-48-month lease term?

The flipside: EVs are computers on wheels, and technologies change and improve at a much faster pace. Therefore, newer EV models with better specs may push down older models’ values.

“Banks are okay with five-year leases of EVs,” said Bob Crowe of Doering Fleet Management during his session, adding that they’ll share a portion of the tax credit with the lessee.

Crowe also said that lessors are getting creative to include charging infrastructure costs into leases to ease upfront expense.

At time of sale, demonstrating EV battery performance will give secondary buyers confidence, which will aid residual values. Diverse entities such as Cox Automotive, Geotab, and Recurrent Energy have tools to measure and demonstrate battery degradation.

I’m overwhelmed by data. Now I need to process more data with EVs?

In a show floor discussion, Jason Kazmar, director, EV strategy and sustainability for Element Fleet Management, brought up a crucial, but perhaps overlooked component to success of an electrification initiative: You’ll need data — lots of it — and you’ll need to know what to do with it.

In addition to data on charging costs, Kazmar said fleets will want to know how hard EVs are being driven, and under what conditions? How is battery health measured and evaluated? How can EVs’ performance be compared with that of ICE vehicles? How does dollar per kWh stack up to a gallon of gas?

Pulling the data is getting easier, as direct connectivity to OEM modems comes to fruition. But that’s just the beginning. These data sets are part of a new type of cost monitoring. Enabling those sets comes under the larger umbrella of change management, Kazmar said.

“The way fleets traditionally monitor expenditures aren't necessarily the same across EVs and ICE vehicles, therefore fleet managers may not necessarily be able to determine the benefits from electric vehicles as easily,” he said. “That’s why integrating that data in a way you can use it is so important.”

More on the importance of data collection: In supplying his EV vs. ICE operating costs, Mesa of the City of San Jose was unable to include his electricity costs along with his fuel costs. But that’s changing: “We did just upgrade the way we capture data on the ChargePoint platform and will be able to incorporate those costs next year,” he said.

What happens if I set up home charging and the employee leaves the company?

When it comes to electrification, there are nagging questions about the new ways of doing things, particularly around charging instead of gassing up. But sometimes the solution is easier than you think.

Today, 80% of charging happens at home. Therefore, fleets with take-home passenger cars, light-duty pickups, and vans will charge at home as well. So those driver employees will need home chargers installed. But employee turnover happens. What then?

NAFA exhibitors Blink Charging have a solution — they sell a home charging unit that can be easily disconnected and brought back to the office should an employee leave the company.

Should I buy electric vehicles from an independent OEM?

Some fleet managers, and rightfully so, are skittish about getting back into the ocean for this reason.

In one session, a fleet manager from a California university said she got into EVs 10 years ago with an automaker that went out of business. The EVs didn’t perform, and the whole thing became a $250,000 science project.

By my last count, there are 24 independent (non-major) automakers with commercial EV models in Class 1 to 6. They’ve exhibited at Work Truck Week in Indianapolis this past March, at NAFA in April, and will exhibit in May at ACT Expo in Long Beach.

As the mainline automakers are now full force into commercial EVs, the safe choice is with them. However, demand has already significantly outstripped supply through 2023. The independents will step in to satisfy a sizable portion of the overhang in demand.

Three things to keep an eye on: Does the automaker have a manufacturing facility secured and is it in the process of retooling for production? Many OEMs with announced timelines on orders and production don’t.

Do they have a sales and service network set up yet? Most are foregoing the traditional franchised dealer arrangement for direct sales. In this case, do they have concrete arrangements with third parties to service the vehicles, and are those parties in strategic locations?

Also, fleet managers are finally getting to drive these commercial EVs. In terms of drivability and user experience, there is a difference between product quality — often a big difference. The drive experience will provide a good indication (though not the only one) as to whether an indie OEM will survive.

What is one-pedal driving, and is it important?

I connected with the team from VIA Motors, and they took me outside to drive their electric cargo van. The drive experience was great — plenty of power with no shift lag, quiet operation, very good turning radius, ergonomically friendly, and major-OEM-rivaling fit and finish. I did have to keep in mind I was only driving a prototype.

It got me thinking — getting behind the wheel of an electric vehicle is what will really drive EV fleet adoption. Delivery drivers will fight over who gets the electric van for the day. And they’d never want to go back.

Like many electric vehicles, this van’s regenerative braking can be set to different concentrations, from almost none to full regen. Full regen enables one-pedal driving, which allows the vehicle to recapture the most energy and it saves the brakes, greatly contributing to improved operating costs.

Light regen is a choice, driven by comfort levels of how an ICE vehicle drives, but it’s not the way to drive an EV — it’s a mere vestige of our old habits. Successful fleet electrification depends on operating and managing EVs in ways that meaningfully distance themselves from ICE vehicles.

This shouldn’t be lost as we continue the journey.

And lastly, a buried lede

If there were any indication that the electrification revolution is in full swing for fleets, Merchants Fleet secured a major order for one of its fleet clients.

“We were informed by one OEM that we had placed the largest single commercial new EV model order on behalf of an individual client with that OEM,” said Tom Coffey, VP of sales at Merchants Fleet, on the show floor.

Author

Chris Brown
Chris Brown

Digital Editor of Automotive Fleet, Fleet Forward, Auto Rental News

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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