As sustainability becomes a more important aspect of a fleet’s operations, electric vehicles are finding a bigger presence among commercial fleets.
Initiatives like the EV 100, an initiative by 60 companies who have made the commitment to transition their fleets to electric vehicles by 2030, is moving the electric vehicle movement forward.
While many vehicle manufacturers are poised to release electric versions of their existing models or entirely new electric vehicles in the coming years, there are still various models that don’t have electric options.
Many of today’s fleets may find themselves interested in adding electric vehicles into their portfolio, but their operations may require certain types of vehicle that don’t exist in electric form.
This is where a company such as Lightning Systems comes in.
The Loveland, Co.-based company outfits vehicles with gasoline powertrains with electric powertrains.
The vehicle conversion offered by the company that is most applicable to commercial fleets in city environments is the Ford Transit conversion.
Discussing the Costs
While there are other aftermarket providers that offer conversion kits, we’ll be looking at Lightning Systems’ conversion process.
Lightning Systems offers two electric powertrain options for the Ford Transit, a 60-mile option and a 120-mile option, the difference between the models lies in the batteries found inside them.
The retail price for the 60-mile option is about $79,000 while the 120-mile option will cost about $99,000.
With an average $40,000 price for a Ford Transit, this puts the all-in cost of the electrified van at about $120,000 for the 60-mile option and $140,000 for the 120-mile option.
That sounds expensive, but when you offset it with operating savings, and offset it with grant and carbon credit funds, of which there is over $5B available throughout the U.S., companies are often able to justify the investment,” said Tim Reeser, CEO of Lightning Systems. “We’re also seeing a lot of companies leasing it, a lot of our customers are leasing the vehicle or leasing the batteries to even the playing field of operating costs and capital costs.”
Leasing these vehicles has been such a popular option among fleets that Reeser says leasing will account for 60%-80% of his company’s business going forward.
To offer these leased electric vans to fleet customers, Lightning System partnered with fleet leasing companies, one of which is Mike Albert Fleet Solutions.
Lightning Systems provides the electric powertrain to a Ford dealer; the Ford dealer packages the powertrain and vehicle, installed and ready to go, to the leasing company; and then the leasing company provides the vehicle to the end customer.
Incentives and grants available in certain states will help reduce the cost of a lease or purchase. Through these incentives, the cost of the company’s electric powertrain can drop anywhere from 50%-90%, which results in a cheaper lease, Reeser noted.
This means that an electrified van might make more financial sense to fleets in states that offer these sorts of incentives.
In states such as California, all fleets whether they’re government or commercial have access to the same grants and incentives. Other states in the U.S. allocate their money differently, Reeser stated.
“To the end fleet customer, the vehicle will look the same as leasing a gasoline or diesel vehicle,” said Reeser. “It will be more expensive up front, but they don’t have the fuel costs and the oil changes and maintenance costs.
On the Matter of Downtime and Maintenance
In a situation where a typical van is driven 25,000 miles a year, that van will see about five oil changes in that time frame.
This means that a typical van with this mileage has five days of expected downtime.
A brake change will also happen in this time frame, and that will account for about two days of downtime on its own.
So, that’s about seven days of expected downtime for typical maintenance in an average year.
Those seven days of maintenance can be eliminated with an electric powertrain, according to Reeser. The vehicle won’t need oil changes and the regenerative braking reduces strain on the brakes, which can reduce the number of brake changes needed on a vehicle.
The removal of this downtime translates into maintenance savings, Reeser added.
Fleet drivers also don’t need to refuel during the day as their vehicle’s electric charge should last through their entire work day.
Fleets also won’t be beholden to the volatility of gasoline or diesel prices, so they should see fuel cost reductions.
Lightning Systems claims that the average monthly savings that they’re seeing in a Ford Transit van equipped with their electric powertrain is $1,300 in fuel and maintenance over a typical gasoline Transit.
The Issue of Range Anxiety
One of the concerns most associated with electric vehicles is range anxiety.
Even though the number of charging stations in the country has been growing over the years, the worry of whether an electric vehicle’s range will allow a driver to fulfill his normal routes before needing to be recharged is pervasive.
Reeser noted that while this worry might be more of a concern for passenger vehicles, it should not be as big of a concern for fleet drivers.
The biggest reasons why fleet drivers — particularly those who operate in urban environments — shouldn’t worry as much about this is because of the fixed routes that they have every day.
Charging their vehicles should also be less of a concern for fleet drivers as they shouldn’t have to worry about public charging stations if their company has charging stations at their depot, Reeser added.
Where fleet managers should be placing their concern is in the charging infrastructure at their companies, and scaling with a growing electric fleet.
Fleet managers may find themselves with 300 electric vehicles and an infrastructure and power supply from the electric company to only run 50 of them. In order to figure out how to run the remaining 250, they’ll need to brainstorm solutions such as installing solar panels to collect additional energy or paying the utility company to pull in extra electricity.
For an electric Ford Transit — which typical Lightning Systems clients run for 40 miles a day — it takes about four or five hours on a Level II charger to fully charge.
If a fleet has 12 hours of charging time overnight, one Level II charger can serve three Transit vans. Reeser noted that software can be used to facilitate this charging method, three vehicles can be plugged into one charger and then the fleet manager can set in the software the start charging one van for the initial four vans, the next van during the fifth and eighth hour, and then the last van during the last four hours.
If a fleet has less time overnight to charge, the Transit vans can be charged with DC fast chargers. These chargers can fully charge a Transit van in roughly two hours. The same strategy can be employed, but with a faster charging interval.
It is important to note that the difference in cost for a Level II charger and a DC fast charger can be substantial, so fleets will need to decide on what method works better for their operations on a case-by-case basis.
Looking at the lifecycle
Lightning Systems expects one of their electric Transits to last the same amount of time that a gasoline Transit would last.
The company rates its batteries for about 2,000 full cycles. This means 2,000 full charges, charging a battery from 50% to 100% essentially counts as half a charge, for reference.
While various factors can affect performance and battery health, Reeser said that this equates to an eight-year battery.
When it comes to the end of one of Lightning Systems van’s lifetime, whether that’s at the end of the eight years or earlier, fleet managers have several things they can do with the van.
Like a gasoline van nearing the end of its life, if one of Lightning Systems’ vans is in otherwise good shape, a fleet manager could take the old electric powertrain out and replace it with a new one. Reeser notes that eight years from now, electric batteries will likely be more affordable as well.
A fleet manager could also remarket the vehicle.
When it comes time to remarket these vehicles, a fleet manager would have two options. One option would be to remarket the van as-is, equipped with an electric powertrain; the other option would be to convert the van back to its original powertrain and remarket the vehicle like that.
Reeser said that both are viable options.
Lightning Systems’ van not only comes with the benefit of an electric powertrain, but in his opinion drives better.
“We believe that in a secondary market, there are plenty of people who would want to buy them used as-is,” said Reeser. “These vehicles are expensive new, so if you remarket them in a state that doesn’t have grants that reduce their price, fleets in those states may be looking for a cheaper way to get into electric vehicles, and this could be a very compelling reason to buy used, especially after people have driven one and see how well they hold up and how little maintenance they require.”
Reeser expects a very active and positive used market for converted Ford Transits.
One thing to note is that Lightning Systems’ Ford Transits haven’t hit the wholesale market yet. So, when a potential buyer goes to an auction to look up the fair market value of a 3-year-old Lightning Systems Ford Transit, there won’t be any resale data available.
“We can’t say definitively what the used market for [our vans] will look like from a data standpoint,” said Reeser. “But, we’re very convinced of our vans’ value, so much so, that when we work with leasing companies, we are guaranteeing a lease residual value on them, such that if a customer doesn’t want to keep them, we’ll take them back and resell them because we’re that convinced there will be a positive market for them.
However, if a fleet wanted to remove the electric powertrain, it would be a simple process, Reeser noted.
Lightning Systems doesn’t modify the van’s chassis or driveshaft at all during the conversion process, so converting it back to a gasoline powertrain is not a difficult process.