ZEV Puts Commercial Fleets Just One Capital Cycle Away From Zero-Emissions Deadlines

ZEV Puts Commercial Fleets Just One Capital Cycle Away From Zero-Emissions Deadlines

By Mike Nakrani, CEO of VEV

There was a very important meeting in Parliament this week… the new Zero Emission Van Plan was launched to MPs representing all parties and corners of the UK.  The plan was established by the BVRLA, Logistics UK, REA, the Association of Fleet Professionals, and The EV Café, to provide recommendations on where support is needed and action required in terms of fiscal support, vehicle charging, and regulatory barriers.

The UK Government’s much-discussed and scrutinised zero-emission vehicle (ZEV) mandate has been codified in law, laying the groundwork for the UK’s commitment to shifting entirely away from sales of new full-combustion cars and vans by 2035. What does this mean for fleet managers, and how do they need to prepare their fleets?

Electric vehicle market growth

Demand for battery-electric vans in the UK grew every month last year, setting new records with 20,253 new units registered for the full year – a 21% increase on 2022 figures. Battery-electric van registrations also increased 73.8% in December last year compared to December 2022, while reaching a market share of 10.0% – the second-highest figure in the industry’s history.1

Despite these volume gains, the market share taken by battery-electric vans overall last year has plateaued compared to 2022; both years ended at 5.9%.2

Given the ZEV mandate’s legal requirement that 10% of manufacturers’ van sales are zero emissions in 2024, and 70% by 2030, it’s critically important that this trend takes an upward trajectory throughout the coming year.

What ZEV means for fleet owners

Because of ZEV, fleets planning for their shift away from diesel and HVO to electric power can be optimistic in terms of increased vehicle availability; indeed, manufacturers’ product strategies are well on the way to being shaped for an electrified future.

Manufacturers now have a legal threshold to hit or risk being fined. The 10% sales target for 2024 will of course increase the number of battery-electric LCVs on the market – and we will also see incentives from manufacturers to help them reach their EV sales targets.

The 2035 deadline for manufacturers to sell only zero emission vehicles is not much more than one capital cycle away.

So the clock is ticking on fleets’ timeframe for making the switch, and planning for fleet electrification has to start in earnest now.

The effect of ZEV on charging infrastructure

With battery-electric van performance and quality making positive strides – and helping to make improvements in uptake of these vehicles – the industry’s challenge is to accelerate charging infrastructure implementation and re-energise incentive schemes.

The ZEV mandate provides suppliers of charging infrastructure with a more robust framework to plan the infrastructure required to meet demand.

Targets will continue to ramp up in the first phase of the mandate, which will help to lay solid groundwork for a stronger network. The more robust infrastructure will then stimulate further battery-electric LCV demand and provide increased certainty with which to unlock critical funding for further infrastructure development.

Fleet electrification deadlines

While the goalposts for transport electrification have moved significantly within the past year, the ZEV 2035 target is looming large. Fleet owners must therefore maintain full focus on switching to electrified solutions, to help themselves and the broader industry progress at the rate that’s needed.

With only one capital cycle remaining for fleet vehicles before the deadline, procurement decisions need to change in the very short term – and as with any transformational shift, preparation is critical to extract the maximum benefits and minimise disruption.

Fleet electrification is a significant business change, involving cross-functional teams, new tools and new skills. Not only does an EV fleet require effective integration of vehicles, charging infrastructure, and energy sources, but also new-style operational management of energy demand and charging scheduling.

  • The design and planning stage of a new EV fleet is arguably the most critical – encompassing the business case, identifying resources and defining a phased implementation plan. In the first instance, fleet managers need to analyse existing fleet telematics data to gain a comprehensive picture of how their fleet operates – journeys, vehicles, schedules, and driving routes. This will identify which vehicles should be electrified first and the optimum phasing for the rest of the implementation plan.
  • Careful consideration must be given to right-size the new EV fleet based on operational needs. From the number of vehicles and chargers themselves, to charging scheduling and energy supply and demand, fleet managers need to determine how the EV fleet will be configured to ensure maximum operational efficiency. Over-investing in unnecessary charging infrastructure, for example, is not uncommon; in some cases, we’ve seen over-investments of up to 20%.
  • The challenge of implementing the appropriate power infrastructure is also something that cannot be underestimated. Lead times for updates to the power grid can be untenable for fleet managers looking to accelerate the electrification of their fleet quickly. Intelligent off-grid solutions such as solar power generation, and a smart energy management system need to be considered.

Sourcing and developing EV expertise

To reap the benefits as the industry accelerates towards this period of profound change, fleets need to acquire new knowledge and expertise. The complexity of building, operating and optimising fleet electrification programmes at scale is exponentially more than running a single trial.

Bringing in expertise to anticipate and resolve the inevitable challenges will prove to be a good investment now, and in the future. That expertise also needs to be transferred to internal teams to support ongoing EV fleet operations –  fleets must upskill both fleet managers and drivers in adjusting to the electric age. This encompasses enhancement of data-management capabilities, energy management and driving efficiency – which, when done effectively, will lead to enhanced operational effectiveness and maximum cost-benefit for the fleet’s daily operations.

At VEV, we provide a transition roadmap from strategy to planning, delivery and operations, with a comprehensive suite of tools and resources to support every phase of the transformation.

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1 The Society of Motor Manufacturers and Traders (SMMT), UK demand for new vans grows in every month of 2023 – as businesses go electric in record numbers, January 2024.

2 The Society of Motor Manufacturers and Traders (SMMT), UK demand for new vans grows in every month of 2023 – as businesses go electric in record numbers, January 2024; BVRLA, LinkedIn, February 2024.