Are electric vehicles (EVs) right for your fleet? Fleet managers from some of the top commercial and public sector fleets spoke to Green Fleet about why and how they went electric, and the benefits and challenges they met along the way.

Making a Match
Investing in new technology only makes sense if it’s a right fit for the fleet. First things first: Which fleets do well with electrification?

Frito-Lay North America’s Mike O’Connell, senior director of Fleet Capability, knows a thing or two about vehicle electrification. The fleet test-piloted 15 EVs in 2010, and now has more than 175 all-electric trucks in service. According to O’Connell, “Any fleet that has local delivery components should be able to integrate electric vehicles into its operations.”

Rolf Schreiber, Google’s technical program manager of Electric Transportation Initiatives, agreed. Google operates 50 plug-in vehicles in its GFleet car-sharing program and has had such an “overwhelmingly positive” experience that it’s hoping to electrify more of its fleet, especially with food delivery and service trucks and shuttles providing intra-campus transportation services.

“Battery-electric vehicles (BEVs) are best suited for fleet operators with somewhat modest daily mileage requirements,” Schreiber said, citing as examples delivery services with local fixed routes, the U.S. Postal Service, colleges and universities, and cities and counties.

Counties definitely make the list, according to Dave Head, fleet manager for Sonoma County in northern California. The County operates 242 hybrid and electric vehicles, including nine neighborhood electric vehicles (NEVs) used around campus-type locations throughout the county.

“We have a lot of applications where vehicles are used every day, but only go 20-40 miles, so they don’t travel long distances — the perfect application for hybrid or electric vehicles,” Head said. “For our fleet, probably half of our vehicles could be replaced with a plug-in type vehicle and meet our needs. If you’re driving 200 miles per day right now, a plug-in vehicle is probably not your best bet.”

Using hybrid-electric vehicles for local travel has also worked well for Comcast, which operates a total of 250 hybrids.

“The Ford Escape Hybrid fit into a category where we had technicians that needed AWD/4WD capabilities, but not significant cargo or payload needs, and travel significant distances occasionally, but primarily were local,” said Bud Reuter, director of procurement & fleet.

Pete Silva, senior director of fleet procurement for PepsiCo, shared a similar perspective, noting “moderate mileage operations with urban use seem to achieve great payback.” PepsiCo has been using hybrids since 2008 and currently runs a total of 263, along with one all-electric vehicle. Silva also recommended EVs for “small fleets with driver commitment and good management span of control fleets,” lightweight payload operations, and traveling multiple stop routes and congested highway travel with stop-and-go traffic.


Operating EVs in intercity/urban areas “where congestion and traffic are a problem and mileage range is not” is the way to go, agreed Steve Saltzgiver, director of fleet operations for Coca-Cola. The Coca-Cola truck fleet includes 760 hybrids and eight all-electric vehicles used in its delivery and service fountain/cooler service applications.

City and plant site driving also make the most sense to Merck Sharp & Dohme Corp., which operates 75 hybrid and 31 electric vehicles. “If you have vehicles that are doing a lot of city driving and on-site driving and you’re performing a lot of low-speed and short-range driving activities, you can maximize the performance advantage of hybrids and electric,” explained Scott Lauer, associate director of vehicle fleet management. “Hybrids get the best fuel efficiency in the city cycle, whereas the opposite is true for gasoline engines.”

The benefits would also be great for fleets with stationary operations, such as utility or cable companies with bucket trucks that use the main engine to supply power through a power takeoff (PTO) in order to raise or lower the bucket, according to Mike Payette, director of fleet equipment for Staples. “This PTO could be operated under battery power in both a hybrid or all-electric mode,” he said. Payette also offered fuel oil, propane autogas, and septic system trucks as other applications that could utilize battery power from hybrids and EVs. Staples operates 53 all-electric trucks and three hybrids.

Coping with Costs
Let’s face it — costs are always going to be a concern when it comes to making any fleet purchase. But, there are ways to work around it.

One way to lighten the typically-heavy price tag associated with hybrid and electric vehicles is to lessen the expense on the fleet’s end.

Schreiber from Google advised fleets to seek free money. “To help offset the higher up-front costs, many state and federal organizations offer grants and rebates for electrifying fleets and deploying charging infrastructure,” he said, citing the Department of Energy (DOE), state energy commissions, and regional air quality management districts as several options.

The City of Santa Ana, Calif.’s Rick Longobart, facilities & fleet manager, agreed. “You need to show some due diligence that you’re offsetting these costs with grant money. You would’ve bought an electric vehicle anyway, but the incremental cost — if not more — is being covered by the grant, and I think that helps,” he said. Santa Ana currently operates two electric vehicles and 26 hybrids, with plans to add two additional EVs this fiscal year.

Coca-Cola actively seeks grants and other incentives to make hybrid and EV purchases cost-effective so that it can achieve an ROI in less than three years, according to Saltzgiver. “The incremental cost of upfitting a truck with any of this technology is by far the biggest barrier. Fleet managers need to find alternative funding options such as grants to offset these costs,” he advised. The Coca-Cola fleet has been able to take advantage of grant funding from the DOE and Clean Cities organizations across the U.S. and in Canada, with average grant amounts ranging from $10,000 to $30,000.


For the 105 electric trucks deployed in its California fleet, Frito-Lay received a grant from the Mobile Source Air Pollution Reduction Review Committee (MSRC), specifically in the South Coast Air Quality Management District (SCAQMD). The company also received funding from the California Energy Commission and the Hybrid Truck Bus Voucher Incentive Project from California Air Resources Board (CARB), administered by CalStart.

In addition to paying less out of the fleet budget, fleets should also take the bigger picture into account.
According to Payette from Staples, “If placed in the right application, these vehicles should be able to perform at the same cost or lower than conventionally powered units.”

Savings associated with fuel and maintenance can help significantly offset upfront costs.

Increasing fuel mileage was Comcast’s primary motivation for purchasing its initial five Ford Escape Hybrids in 2005, according to Reuter. “In 90 percent of hybrid replacements, we increased our fuel mileage by 65 percent or more,” Reuter said.

For AT&T, which operates three all-electric and 25 extended-range electric vehicles, the incremental purchase cost hasn’t been a deterrent, either. “The fuel savings over the life of the vehicle often more than compensates for the added cost,” said Jerome Webber, VP of global fleet operations for AT&T. AT&T deployed its first hybrids in 2007 and plans to have a total of 7,000 hybrid-electric, all-electric, and extended-range electric vehicles by 2018. Webber also noted that drivers also enjoy less time at the pump because of these units.

Schreiber of Google agreed. “It’s really important to look at total cost of ownership across the expected service life of the vehicle,” he said. Google has saved several thousand gallons of gasoline with the plug-in vehicles used in its GFleet car-sharing program since 2007. And, not only do the vehicles help cut back on fuel use, they also help offset approximately 365 tons of greenhouse gas (GHG) emissions.

Coca-Cola’s Saltzgiver also cited savings, estimating up to a 30-percent annual reduction not only in fuel, but in CO2 emissions as well.

Considering the Sonoma County fleet averages 7 million miles and consumes 600,000 gallons of fuel per year, the improved fuel efficiency from its Chevrolet Volts and Nissan LEAF is definitely keeping the County happy. Two Volts put into service in June have traveled a total of 1,800 miles on 22 gallons of gasoline, according to Head. “We’re averaging 79 mpg with the Volt, so I’m not complaining,” he said.

The Nissan LEAF the County put into service 15 months ago cuts down on fuel expenses as well, especially when charged off-peak. “Based on our corporate rate, fuel is costing us around 2 cents per mile (cpm), compared to 14-15 cpm for conventional gasoline. So, there’s a big difference in fuel costs. Even if you’re charging during peak hours, it’s still only costing about 5 cpm,” Head said.

Head noted that without a time-reduced rate structure, it could cost a little more, “but, there’s no way it’s going to cost you as much as gasoline — at least not in California.” And, it’s not just the all-electric vehicles that have saved the County money on fuel; hybrids get double the fuel economy of the fleet’s conventional vehicles, Head noted.

Fuel savings is also a factor driving the City of Santa Ana’s plan to increase its EV fleet. EVs will contribute about 85 percent of a projected $1.2 million annual fuel savings from alt-fuel vehicles after five years, according to Longobart.

On the maintenance side, hybrid and electric vehicles require less PM over the vehicle’s lifecycle, which can cut down considerably on total cost of ownership.

According to O’Connell from Frito-Lay, “There are considerable ongoing operational cost advantages as you trade diesel fuel for electricity, as well as removed emissions and fuel system associated with internal combustion engines that drive high maintenance costs. In many respects, it’s easier to maintain an EV since there are far fewer fluids and systems to manage, which in turn translates to cost savings.”

In comparison to a gasoline-fueled sedan that may cost $4,000-$6,000 in maintenance per year, Longobart from Santa Ana expects maintenance on electric vehicles to be practically nothing.

“We’re envisioning that we’re going to see a plummet in maintenance costs because there’s really nothing to do when you’re dealing with a fully electric vehicle that has no combustibility whatsoever — no oil changes, no maintenance,” he said.

Even with hybrids, Sonoma County has made a significant dent in maintenance expenses. “Across the fleet, the maintenance cost on a hybrid has been about half of what it was costing us to maintain a conventional vehicle. And, our expectation is that an all-electric vehicle is going to cost half of what the hybrid maintenance costs,” according to Head, who noted that the hybrid’s regenerative braking system and design result in significantly less wear on the brakes.“We’re expecting that our all-electric vehicles will go their whole life and probably not need a brake job, which is one of the most expensive repairs to do. Also, the all-electric vehicle doesn’t have an engine, so there’s no oil change; it doesn’t have a transmission so there are no transmission services. The system on the vehicles is just not going to require the maintenance that a conventional vehicles does.”


And, because less maintenance will be needed, Longobart pointed out another savings aspect: manpower. “As our staff is reduced because of financial obligations, employees retire or get promoted or move into other occupations, as our workforce shrinks, we need to be able to offset that with something. So, we’re using technology to offset the workforce. When very little maintenance is required, less labor is needed, and naturally labor costs are less. So, we are always putting that into the back of people’s minds.”

Additionally, a higher upfront cost for vehicles can sometimes be recouped in resale value, which is the case for Sonoma County.

“When I was selling conventional vehicles, I was getting around $2,000-$2,500 for a compact car. The last several Prius units we’ve sold, we’ve gotten $8,000-$10,000. The difference is huge. So, the ownership cost is actually less on a hybrid than it has been on the conventional vehicles because fuel cost is less, maintenance is less, and the resale value has been two to three times as much,” Head said.

Being Realistic with Range
Once the issue of cost is out of the way, range tends to be the next main cause for concern — not necessarily for hybrids, but all-electric vehicles.

“The greatest challenge in deploying all-electric vehicles has been the range limitations of today’s technologies,” Webber from AT&T said. “We have dealt with this challenge through calculated deployment to target clients whose daily routes do not exceed the range.”

The same goes for Frito-Lay. “We have a fixed route delivery system, which allows us to model and identify the best routes for these trucks and thereby minimize any issue,” O’Connell said.

According to Lauer of Merck, range anxiety is real, but it can be overcome. “Once you get comfortable and plan your day, you’ll realize you probably don’t drive 150 miles a day — your average day is probably much less than the actual range of the vehicle,” he said. Merck’s sales force is not yet ready to adopt these types of vehicles due to the high TCO and less predictable driving cycles each work day.

EV range just takes some getting used to, said Schreiber from Google. “It’s pretty typical for new fleet drivers who aren’t used to the EVs, but range anxiety tends to diminish pretty quickly for regular EV users,” he said. “Overall, the technology is good for first-generation vehicles, but practically speaking, for fleet needs, the real-world range needs to be more like 120 miles per charge for a pure EV versus approximately 80 miles [for several of the current models available today].”

Sonoma County has experienced the worst-case scenario. While drivers are made aware of limitations prior to operating the vehicle — Head or one of his staff provides a brief overview of the capabilities of the car and how to maximize range, and “cheat sheets” are in the vehicles — there was one occasion where range axiety became a reality.

“We’ve only had one driver in the LEAF who has completely run out of power. And, that was a really cold wet and rainy day where she had the heater, windshield wipers, and headlights on, and she was driving in the rural part of the county with lots of hills — so it was all the things you don’t want to do. She got 62 miles in the vehicle, ran out of power, and we had to tow her back,” Head recalled. “Other than that, we haven’t had any problems with range.”

On the bright side, Head said the driver learned her lesson and was motivated to implement better route planning.

“What we’ve found is the drivers are planning better around how they utilize the vehicle. So if they’re taking out the LEAF, they know they have 80-100 miles of range, so they plan their day a little bit better,” he noted. Likewise with the extended-range Volt, drivers using the vehicle base their routes on its 40-50 mile range. “So, if they’re close to 40 miles in their day, then they’ll try and manage their trip to not use any of the gasoline capabilities,” Head added.

Appreciating the Upsides
Less fuel and maintenance costs are definitely pluses, but what other positives can fleets look forward to when it comes to electrification?

For one, there’s the environmental impact — or lack thereof — which such fleets as AT&T appreciate.

“In the long-term, AT&T’s goal is to implement an alternative-fuel vehicle strategy that continues to minimize our environmental impact, reduces our dependence on imported oil, and lowers our vehicle operating costs. Hybrid-electric, all-electric, and extended-range electric vehicles allow us to do exactly that, and would also be key selling points for other fleets,” Webber said.

When comparing EV emissions versus diesel engines, Frito-Lay’s electric fleet reduces GHG 75-percent per mile, according to O’Connell.

The eco-friendly qualities of EVs are especially helpful for Merck’s applications that require driving inside buildings.

“You don’t have to worry about any pollution or contaminating the indoor air quality because you have these vehicles that can go just about anywhere, whether you’re fixing motors or hauling manufacturing items,” Lauer said.

For some fleets, the vehicles also appear to be a hit with drivers.


“The environmental and economic benefits were the first big attraction, but we also discovered that our drivers were happier driving these trucks,” Payette said. “[It’s] improved morale among our drivers, who are excited to be a part of the latest technology. They enjoy the quiet nature of these trucks and features like electrically operating rear and side doors. They finish their days less tired and enjoy showing the trucks off to customers and the public at large.”

Sonoma County drivers love the EVs, too. “They’re fun to drive, they have good acceleration and handling characteristics, are appointed well, and have all the bells and whistles that people like to see in their cars, so driving the car becomes transparent,” Head said.

The OEM models, in particular, are fun for Merck’s drivers. “They have a lot of low-end torque, drive in a way that’s pleasing, and are much tighter and better put together than some of the other prototypes,” said Lauer, who has done his fair share of test driving a variety of the EVs on the market. “When we did actually make the decision to buy the Volt, we wanted a vehicle that an OEM stood behind,” he added.

Dealing with More Downsides
Aside from the upfront costs and range anxiety, there are a few other issues to watch out for. While most of the fleets surveyed said the ordering process is generally the same as for conventional models, lead time was a notable challenge for Staples, which experienced slightly longer lead times for electrics and hybrids.

“The chassis for electric trucks are delivered by rail and completed units are then transported to their final destination by trailer,” Payette said. “Charging stations have to be set up at body manufacturer sites to keep chassis charged during body building processes. Body manufacturers also have to understand any differences in chassis design before they build a body on it. This requires several meetings between engineers of both companies in advance of any build.”

Infrastructure can also pose a significant challenge (see companion article, ‘Charging’ Ahead from the Grid Up on page 16 for additional details).

For Frito-Lay, the new charging station infrastructure was a big difference. “Good partners in this process worked with the utilities and local permitting agencies to reduce costs and speed up the installation process,” O’Connell said.

Over the past three years, Sonoma County has been putting in EV charging stations, about half of which are available to the public when County vehicles are not parked there. Because of the public accessibility, there have been a couple stumbling blocks, according to Head.

“Our first stumbling block was meeting the requirements of the American Disabilities Act (ADA), because if you’re going to have public chargers, they have to be accessible to disabled people. That’s something we hadn’t thought about. So, our first few chargers that we put in were not accessible. Then our permitting department said we had to make it accessible,” Head noted.

At the time, Head said there weren’t really any details or requirements to follow. So, in early 2011, the fleet put together a work group of more than 50 people from the air districts, Clean Cities, utilities, and others interested in EVs.

“We wrote our own guidelines on how to install a charging station and make it accessible to everyone,” Head recalled.

But, that wasn’t the only issue Sonoma County faced. Most county buildings were so old that they didn’t have the electrical capacity or the electrical panels didn’t have the capacity for adding EV chargers.

“The money to install the charger itself has been covered in the grants, but the cost of upgrading the electrical panels has been County costs, so that has delayed the process more than anything else,” Head said.

Longobart from Santa Ana also brought up the issue of the vehicle battery. The City is planning to keep its electric vehicles in service for eight to 10 years, based on the battery lifecycle.

“I don’t know that a vehicle that costs $20,000 and a battery pack that costs, say $10,000, would be something we’d re-invest in,” he said. “We really don’t know the cost of the battery. So those are really the things that need to be determined in the next five to 10 years — not knowing what the battery is going to cost and the longevity of that battery. There are too many unknowns.”

In addition, Longobart cited human behavior as his biggest challenge.

“It can be challenging to adopt new technology and get operators to understand that, while doing good for the environment is great, there are financial advantages,” he said.

Other challenges include the limitations due to gross combined vehicle weight restrictions, which PepsiCo has dealt with by performing duty cycle evaluations to optimize their application, according to Silva.

Additionally, Comcast’s Reuter noted limitations to cargo capacity.


(Best) Practices Make Perfect
Preparing for electrification might not be easy, but the process can go a little smoother if you take into consideration these helpful hints from fleets that have already done it:

Map out a plan. “Figure out what your goals are (lower operating cost, reduced environmental footprint, etc.) and search out the best technology for the job,” said Schreiber from Google. “Then, look at utilities, the Electric Drive Transportation Association (EDTA), and other alternative-fuel organizations to gather data on what technology/vehicles make sense to achieve those goals.”

Saltzgiver from Coca-Cola also put emphasis on “pacing acquisitions to manage consistent lifecycle schedules and prevent annual cash flow spikes.”

Do your homework. “Fully understand the technology and its application to your fleet prior to deployment,” stressed AT&T’s Webber.

“We don’t put a plug-in vehicle in an environment where it could fail, so working with your customers is really important,” said Head of Sonoma. “It takes a little bit of extra effort to sit down with customers and ask ‘what are your driving habits and will this type of technology fit that driving habit?’ ”

Educate. “Ensure drivers are comfortable with all-electric and extended-range electric technologies through training programs and planned follow-ups to assess their vehicle satisfaction and proactively address any issues or concerns that may have arisen,” Webber said. AT&T drivers are trained to use Level 2 charging stations, and many embrace the challenge to drive as efficiently as possible to maximize the all-electric range and ensure daily routes do not exceed expected range.

Schreiber from Google also stressed the importance of education. “We make sure every driver using the fleet vehicles has reviewed the short training presentations we created,” he said.

Hands-on training is also a must. “We bought the vehicles early and tried to get them into the hands of the people who are going to be driving them every day and let them overcome their concerns by actually driving the vehicle,” said Head from Sonoma County.

Staples conducts detailed classroom sessions, followed by two days of ride-alongs with qualified trainers to help drivers master best practices and obtain optimal performance.

Get buy-in. “You need to start selling it to administration and get their buy-in so that when you start to move forward you have their full support,” Longobart said. Administration, however, is not always the only buy-in needed. “A lot of times, the buy-in is the operator, too. You have to fade it in slowly and just let them test the vehicles to make sure they get to a point where they’re confident with it themselves,” he continued.

Communicate with all stakeholders. Electrifying a fleet involves more than just the fleet manager and drivers.

“We continue to work with the manufacturers, upgrade technology, train new drivers, and coordinate with our maintenance providers in an all-inclusive approach so all parties learn together,” said Payette of Staples.

AT&T works closely with its clients and corporate real estate team to ensure the vehicles and infrastructure will be a fit for the location and meet the needs of the drivers, Webber said. “We then coordinate with station providers to purchase and install the units so they will be ready for use when the vehicles arrive.”

Fleet managers should be especially mindful of those doing the administrative work involved.

“We have to be understanding and patient and realize that our mission is not as easy and clear to others who don’t reap the benefits. So it’s really about cooperation and collaboration with other operations in order to be successful,” Longobart noted.

Learn from others. “Search out one of those fleets who are already doing it or trying to do it, and if possible, go visit their operations. Talk about the concerns and problems and issues they’ve had and how they’ve mitigated those things,” suggested Head from Sonoma County. “I’ve been living it for the last three years and I go to a seminar or conference and talk to people and hear things I hadn’t thought of before.”

Payette from Staples also suggested partnering with OEMs and other fleet managers who are already running these vehicles to speed up the learning curve.

Keep an open mind. As with any new technology, there are always going to be some growing pains — especially for early adopters.

“If you go out there with an open mind and understanding that there are advantages and disadvantages and there are hurdles along the way, you don’t really get hit hard with any big surprises,” Longobart said.

For Head, the plug-in vehicle has been the most dramatic change in automotive technology in his entire career. “For the first time since the early vehicles in the 1900s, we’re looking at a different way of fueling. We’re looking at a different way of operating it. We’re not using fossil fuel as the propellant, and that’s huge,” he said.

Despite his experience with EVs, Head said he still has a lot to learn. “Have an open mind. Don’t be afraid to jump in a little bit and try a few of these vehicles and see how they work. If I was starting this over again, I wouldn’t do a whole lot of things different. I just know that there’s more knowledge out there now than when we got started. It’s been a very interesting process.”


Should You Jump on the Electric Bandwagon?
If any of these qualities pertains to your fleet, electric vehicles may be for you:
● Mostly local driving.
● City and stop-and-go traffic.
● Stationary operations.
● Lightweight payloads.

Vehicles Electrifying Today’s Fleets
The following are some of the electric models being used by fleets in this article:
● Chevrolet Volt.
● Ford Focus Electric.
● Ford Escape Hybrid.
● Ford Transit Connect Electric.
● GEM Electric Vehicle.
● Honda Fit EV.
● Miles Automotive Electric Mini Truck.
● Mitsubishi i-MiEV.
● Navistar eStar.
● Nissan LEAF.
● Smith Electric Newton.

About the author
Grace Suizo

Grace Suizo

Former Senior Editor

Grace Suizo is a former senior editor of Bobit Business Media. She was previously known as Grace Lauron.

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