Your EV fleet transition costs may not be as high as you think…
By George Hobbs, eMobility Lead Product Manager
One the most common reasons cited by fleet operators for delaying their electric vehicle (EV) transition is cost. However, despite higher up-front purchase (or rental) costs, over a longer period, transitioning to EVs can be more economical than running ICE alternatives.
To appreciate the cost-savings that can come with EVs, fleet managers need to consider the total cost of ownership (TCO) of their vehicles. As well as considering purchase price, TCO also considers the indirect costs of operating a fleet, such as maintenance, insurance, tax, and fuel.
When I encourage fleet managers to look at these indirect costs over a longer period of time, they see that transitioning their fleet isn’t as expensive as they first thought.
As reported by McKinsey, the total cost of ownership of an EV will outperform its ICE counterparts across all vehicle classes as early as 2025.
With fewer moving parts than ICE vehicles, EVs require less maintenance, and when they do require servicing, the associated costs are typically lower. In turn, this means that EVs can spend more time on the road, reducing vehicle downtime and improving productivity.
What’s more, as fuel prices fluctuate, the current cost per mile of ICE vehicles makes traditional fleets less desirable over the long-term. Likewise, ‘last mile’ delivery costs and Clear Air Zone penalties are becoming increasingly prohibitive to ICE vehicles.
At VEV, we believe that a tailored EV strategy can help fleet operators keep their transition and operational costs down. As such, we’re helping fleet owners stay ahead of the game by implementing the following five steps:
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Plan your EV transition
Optimising your EV transition costs requires careful planning. Every commercial fleet has its own unique requirements and operators need to consider its size, configuration, and operational requirements.
This includes choosing vehicle types based on routes, operational patterns, and the availability of chargers. Likewise, when choosing on-site chargers, fleet operators should consider the length of time that vehicles are parked, the availability of space for infrastructure, the on-site power capacity, and the necessary chargepoint software functionality.
With a good overview of these factors, fleet operators will be in a strong position to make cost-effective vehicle and charger purchasing decisions.
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Analyse your telematics data
I sometimes find that fleet operators are focused on transitioning their vehicles all at the same time. However, this doesn’t need to be the case.
To help companies manage their transitions in an economical way, we encourage operators to analyse their ICE fleet telematics data to determine the electrification readiness of their vehicles. With this data, companies can decide which vehicles to transition, and which need reallocated to different routes to improve flexibility in the short-term.
We typically find that small commercial vehicles are usually the readiest for immediate transition. This means that operators can phase their transition, and spread their costs over a longer time period. It also provides learning opportunities for future phasing.
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Get an overview of your energy profile
Your company’s energy profile provides insights into when, where, and how your energy is being consumed.
With an understanding of how you’re using energy, you can make cost-effective decisions on charging infrastructure. For example, there are savings to be made in integrating solar energy and battery storage into your infrastructure.
Likewise, these renewables can reduce your overall operating costs and create a more reliable, resilient energy system where your fleet is always ready to operate. They can also help you reach your net zero targets quicker.
What’s more, with on-site energy generation, less energy is lost during transmission, which is better for the environment as a whole.
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Balance your infrastructure
At VEV, we often see new EV fleets being over-specified, sometimes causing an overspend of up to 20%.
To maximise cost efficiency, fleet managers need to ensure that they have the correct balance of infrastructure to meet the company’s fleet needs.
For example, companies often misjudge the mix of vehicles and chargers, which can ramp up operation costs. Companies therefore need to gather all their fleet and power data and align it to their strategic goals. In turn, they can achieve the optimum mix of EVs and chargers based on their needs now, and in the future.
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Involve your whole team
A successful transition is a team effort, and everyone will need to be aware of your top-level strategy. Training may also need to be organised to ensure everyone has the necessary skills to fulfil their roles.
Fleet managers will no longer manage their vehicles using fuel cards. Instead, they’ll be managing energy sources, charging schedules, and vehicle usage patterns to ensure operational resilience. They’ll therefore need to be trained in using the necessary platforms and technologies.
Likewise, drivers may need to be trained in how to drive cost-efficiently. For example, driving at a consistent speed, avoiding sudden braking, and switching off unnecessary features can all improve the range of electric vehicles.
When driven well, an electric vehicle can typically increase its range by up to 20%, improving operational efficiency and keeping energy costs down.
How VEV can help reduce your fleet transition costs
At VEV, we understand the challenges companies face when transitioning their fleets, and we have the tools and capabilities to help you navigate the journey.
Our software platform, VEV-IQ, can help you unearth significant cost-saving opportunities, all the while reducing complexity, wastage and improving your fleet efficiency.
By monitoring your fleet operations, we can help you optimise your costs across multiple sites. With our driver app, drivers will have access to real-time driving data, notifications, and alerts, empowering them to manage their energy use and charging costs.
Ultimately, electrifying your fleet requires careful planning, and the sooner you develop your strategy, the lower your transition costs will be.
Get in touch with one of our expert team today and find out more about how VEV can help lower your fleet transition costs.