Driving Towards Net Zero: Strategic Fleet Decarbonization – Your Questions Answered!
Merchants Fleet VP of Sustainability & Fleet Electrification Hari Nayar led a thought-provoking webinar in partnership with Reuters Events, Driving Towards Net Zero: Strategic Fleet Decarbonization. The webinar brought together an elite panel of industry experts from Shell, Hitachi ZeroCarbon, AECOM, and Edison Energy, to provide insights into the current state of the EV landscape, how to future-proof your fleet decarbonization strategy and diversify your role in the decentralized e-mobility ecosystem.
Since our panelists couldn’t get to every question during the event, Hari provided his thoughts on the most popular questions from the session.
Q: How much more cost-effective are electric vehicle fleets compared to traditional gasoline-powered fleets?
Hari: We’ve done a considerable amount of analysis between available EVs today to their closest equivalent ICE counterparts using standard fleet operational numbers in terms of annual mileage, maintenance, etc. which points to EV fleets being more cost-effective when compared to ICE fleets. However, there are also certain types of vehicle segments where the EVs are so origination intensive (or the cost for the vehicle is so high) that it might take a little longer to reach a break-even point if you were to compare it to an ICE vehicle. We have seen data where in some cases your break even for EVs could be as few as a couple of months to maybe as long as 2-3 years when compared to an equivalent ICE vehicle. For more visit: Your Guide to Gas Cars vs. Electric Cars
Q: Given the high-inflation market we live in, will the result of fleet electrification lead to higher costs to the consumer or end-user?
Hari: We don’t think the cost to the end user is going to increase significantly because of electrification. If you look at the pricing of ICE vehicles and also the pricing of EVs however, EVs offer a pathway for fleets to further optimize their costs. Projections for EVs indicate lower operating overhead and maintenance expenses. EVs and zero-emissions vehicles help fleets control their fueling costs much more granularly than would otherwise be possible, all of which should help act as a buffer to prevent higher costs from being passed on to end consumers.
Q: Most fleets have telematics in their vehicles, whether they are powered by fossil fuels or electricity. This should allow us to know what infrastructure is needed, and where. How do you facilitate collaboration between the fleet operators, the infrastructure providers, and the local authorities to make locations available for EV charging where it is needed?
Hari: We use telematics information to optimize fleet operations in a multitude of ways. When it comes to EVs the inherent fact is that nearly every EV that comes out is a connected vehicle. The connectivity that the vehicle offers is also in some cases an enhancement to what is available on corresponding ICE platforms. Telematics and connectivity to the vehicle will also help identify clusters of operation where infrastructure needs to be bolstered. If we find that there are clusters within a geographic area where vehicle operation density is high, then that information can be used to bring about a business case justification for investing in more infrastructure. It’s too early to be tapping into that level of data because the concentration of EVs for fleet operations on the road today is still very minimal however that is one example where we can bring in the infrastructure partners, local authorities, and the fleet operators together to ensure smooth operations.
Q: With more innovations coming, will it be risky and costly to implement EVs today when in five years we might shift to another type of fleet decarbonization?
Hari: We don’t think electrification is going to dramatically change or become obsolete in 5-7 years to the extent that another zero-emissions technology will take over. The innovations that are happening around EVs will continue. We’ll see better battery performance, better range performance, more efficiency on the vehicle side, and better efficiency of the chargers which will continuously push the operational capabilities of EVs higher and higher. There is no indication yet that there is another emerging zero-emissions technology that can completely offset electrification and render it obsolete. OEMs are very savvy about where they see the technology disruption and what is real and what is not real. Just the fact that there are billions of dollars being spent across the world in new battery production facilities and battery plants is a testament to the fact that electrification is here to stay.
Q: Today’s EV technology is already good enough to meet most business needs, and it will only get better. Do you see any real tech disrupters in the near-future that would render current infrastructure obsolete?
Hari: The current infrastructure is in its very early stages to support E operation and by this, I mean that the technology is stable and becoming more and more cost-effective. However, the concentration of infrastructure-related technology is still not where it needs to be to support ubiquitous EV operations. There are a few technological steps that we’re already tracking towards that I wouldn’t call disruptors but more enhancements to supporting EV operations.
First, faster charging and faster power conversion are one of these areas. If you go back 2 years, there weren’t many 20-kilowatt or 30-kilowatt DC fast chargers in the market. Fast forward to today, you are able to deploy 20-30 or 40-kilowatt DC fast chargers that are commercially viable and technologically stable. Those types of innovations have come to market quickly. Looking forward, I think the power conversion efficiency of all of these chargers increase.
The second thing that we will see coming to market is a certain level of wireless charging that will probably start at the retail consumer level and then work its way into fleets and commercial applications.
The third is overall efficiency improvement on the vehicles themselves which reduces the need for frequent charging.
The fourth I would say is more of a technological leapfrog situation, which would be the general optimization of EV usage through bidirectional charging.
None of these examples will make the current infrastructure obsolete. We see it as progressive improvement and enhancements to present-day technology that will continue to help drive tailwinds for electrification and zero-emissions transportation.
Q: As electrification is progressing, so is full self-driving (FSD) software. There was no mention of this by the panel, do you think it will create a disruption in the industry?
Hari: We do not see autonomous driving at any level being a disruption to electrification. Electrification basically involves changing the vehicles’ fundamental power train or the propulsion system from gas and diesel or fossil fuel-based to electricity-based. You can have autonomous driving capabilities in ICE vehicles, and you can have autonomous driving capabilities in electrified or zero-emissions vehicles. FSD is complimentary to the power train technology so it’s not really a disruptor per se to electrification. Electrification, however, has the ability to provide an acceleration platform for FSD or more autonomous features on the vehicle just because the EVs are fundamentally simpler to engineer and produce compared to gas or diesel vehicles. This also gives freedom for OEMs to engineer more sensors, more sophisticated radar systems, or lidar systems and package them in a way that it is possible to cost-effectively integrate them into a vehicle design, so we don’t see autonomous technology as being a disruptor to electrification, we see it as complimentary.
If you have questions regarding fleet electrification, EV/EVSE selection, or how to get started on an EV pilot program, contact our EV team today.
