Fleet owners are turning to EVs more and more frequently, in the name of reducing emissions, cutting costs, and meeting regulations. This transportation transition is driven by both market and regulatory tailwinds. With it comes clear economic, financial, and logistical benefits. Yet to tap into these benefits, fleet owners and operators considering electrification need to first identify the infrastructure challenges they might face, and outline tools and strategies to overcome them.
Progress in electrifying medium- and heavy-duty (MHD) fleets is already underway. Global sales of electric trucks grew by 35% in 2023, and the global electric commercial market is projected to grow from USD 70.9 billion in 2024 to USD 255.6 billion by 2030. That would be a 23.8% compounded annual growth rate!
Fleet owners and operators in the UK have the opportunity to lead the way in this global surge and make significant environmental impacts while doing so. Surface transport is the highest greenhouse gas (GHG) emitting sector in the UK economy, and 19% of these emissions came from HGVs alone, despite them being only 1.3% of the total licensed vehicles on UK roads. Electrifying HGVs will make a swift and outsized impact on air quality.
Government support for this electric transition is prominent. The European Union recently confirmed that it will stick to its defined target that all new cars and vans sold in the EU will be zero-emissions by 2035, a target that contains fleet vehicles within its scope. This action follows multiple other government initiatives that have gone into effect to reduce vehicle emissions in recent years. Three of the first Zero Emission Zones (ZEZ) in Europe, designed to cut emissions and improve air quality in urban settings, were installed in the UK. Oxford launched a ZEZ in 2022, joining ZEZ pilots operational since 2018 in the London boroughs of Islington and Hackney. In 2023, Westminster City invested in a fleet of 45 electric refuse trucks that are powered by the waste they collect.
Institutions and private companies are also doing their part. Earlier this year, Royal Mail deployed its 6,000th EV, with EVs in operation at over 240 offices across the country. And in January, Amazon placed an order for 148 electric heavy goods vehicles (HGVs) to be added across its UK-based transportation network. HIVED also announced in February that it has expanded the UK’s only end-to-end electric delivery network, with an order of 11 electric trucks.
The benefits of electric fleets
In addition to making quick and sizable environmental impacts while meeting government regulations, electrified fleets have tangible and direct business benefits.
Based on the total cost of ownership (TCO), EVs are projected to outperform gas- and diesel-powered vehicles across all vehicle classes as soon as this year. Currently, the focus of the market is on regional and urban trucks, but HD trucks are also expected to become more affordable in the coming years. This same report found that fleet owners have an opportunity to lower overall costs by making the transition to electric vehicles. EV fleet vehicles save money on maintenance and repairs compared to their ICE counterparts, due to fewer moving parts, no need for oil or transmission fluid changes, and less brake pad wear due to regenerative braking.
Another area where fleet owners and operators can benefit by going electric? Operational control. EV fleets can be charged at depots overnight and off-shift when they are not in use, allowing fleet operators to deploy vehicles efficiently, without delay. With a fully charged fleet by morning, fleet managers can effectively plan routes for the day and increase overall productivity of their delivery operations.
Fleet owners and operators may face initial challenges when transitioning to electric, such as the upfront costs, before experiencing these operational benefits. Once vehicles are purchased, the next hurdle is reliable charging.
Overcoming electrification barriers
Uncertainties around charging infrastructure are one of the most prominent barriers in fleet electrification. Even when fleets have the upfront capital and the internal buy-in necessary to transition to EVs, powering fleets at scale without disrupting operations remains a significant hurdle to clear. Fleet owners and operators cannot afford to have idle vehicles due to inadequate charging capabilities. Stable charging assets are crucial to keep fleet vehicles on the road.
Fleet electrification requires owners and operators to consider on-site power constraints and plan for smarter energy consumption. Larger fleet vehicles need charging availability at depots or hubs and their immense energy needs often necessitate overnight charging in order to reach a full battery. In this instance, managing the energy to charge multiple high-capacity batteries is made a lot easier with smart energy management platforms. These platforms combine smart energy utilization from the grid with local battery storage, and can enable charging for as much as 6X as many EVs compared to unmanaged charging without requiring electrical infrastructure upgrades. Managing the power you already have access to is much easier and cost-effective than spending for and waiting on costly and time-consuming utility upgrades.
These tools can also be used to reduce energy costs, by leveraging time-of-use contracts to maximize fleet charging when electricity rates are low. This is a large benefit over ICE fleets. Instead of being subject to oil price volatilities that lie far outside of the control of fleet operators, EV fleet charging can be scheduled to maximize cost control. Electricity pricing changes with demand, so charging overnight and during other off-peak time windows is an opportunity to save money. Leveraging insights from real-time data gathered from these energy management platforms can support strategies for time-of-use contracts to ensure they are successful.
An ongoing challenge is the demanding ROI for HD trucks, especially given how they’re used nearly 100% of the time. The price of HD trucks remains significantly higher than that of diesel trucks, and in many cases, they need to be charged outside of the depot, which can delay their expected market share. A reduction in battery cost, increased capacity of batteries, and quicker charge time are needed to make HD trucks more economical.
Transitioning to and powering electric fleets takes effective planning, and when done right, pays off in dividends. Fleet operators can prioritize fleet charging according to their business needs with smart energy planning tools. These same solutions allow fleet operators to monitor charger availability and utilization, and ensure charger stability across their fleet charging depot. Optimization and real-time insight at this level allows for more efficient turnaround of vehicles at charging depots.
As electric fleets and the charging infrastructure that supports them continue to expand, so too do the economic, environmental, and operational benefits that follow. To fully access these benefits, fleet managers and their teams must be certain that their vehicles are charged and ready-to-roll. Using innovative smart charging and energy management tools and proactive planning to ensure vehicles remain powered, EV fleet managers will be able to focus on their work rather than worrying about charging.
And cleaner air, stronger bottom lines, and improved fleet control will be the results.
Oren Halevi, chief product officer of EV charging software company Driivz
