Fleet electrification: leading the EV transition?

Governments and companies are pivoting towards electric vehicles under pressure to reduce their carbon footprint. Can fleet electrification become the driver for the adaptation of EVs in general?

Philip Potkowski: One thing is for sure: EVs are here to stay. In 2020, there were already more than ten million electric vehicles on the roads worldwide. We see multiple drivers for an ongoing rapid increase such as technical improvements in range and charging speed, and results from our Charging Infrastructure Benchmark show improved access to charging stations. The ramp-up is also based on a significant reduction in the consumer vehicle price due to lower production cost and government incentives like tax rebates. In this environment, fleet operators have the potential to lead the transition, because they have – as you said – an additional, strong incentive: they must decarbonize their footprint, and they have to do it fast.

Soeren Schrader: I agree, the overall reasons for fleet electrification are environmental goals. Many US states have set clear and ambitious targets for the reduction of greenhouse gas emissions. The US Infrastructure Investment and Jobs Act is also pushing the switch, including incentives for fleets operated by companies or single states. A while ago, we created a tool to forecast EV market ramp-up in US states and municipalities based on the total cost of ownership for EVs, political and regulatory framework and goals, emission targets and other regional factors. This indicates a dynamic market development for many regions. Keeping two things in mind: first, if emissions need to be decreased, we must make sure renewable energy is available for charging. And second, the automotive industry must be able to actually deliver products for fleet applications.

Are there enough competitive products for fleet use on the market right now?

Philip Potkowski: That depends on the use-case. If you are managing a fleet of cabs, there are some options to choose from. If you are a big mail-order or logistics company and plan to build a fleet of electric delivery vans, you may find very limited offerings. The portfolio needs to be expanded, and OEMs still need to bring the cost down, especially for batteries with a clean carbon footprint that provide the necessary range.

“Fleet operators need an all-electric ecosystem”

What are the challenges if fleet operators want to move from combustion engines to EVs?

Soeren Schrader: Fleet operators and pure electric vehicles need an all-electric ecosystem. You need to know how to connect to the grid and how much it costs to install and operate a charging site. The challenge: every site is different – and for good reasons. The charges for the connection to the electrical grid and the operation vary widely depending on location and the cost structure of the utility companies. But there are also other factors to consider. We are currently assessing many depots and design individual concepts based on the use case. That goes from charging parks with ten company cars up to parks with a few hundred trucks. How much energy is needed and when? We look at options for on-site generation of renewable energy or load management – like solar panels or battery storage, which can decrease grid charges heavily in some use cases. Based on the technical framework and the economics, we come up with a feasibility study for the location and its possible development as well as different scenarios to deploy. If a client decides to go ahead, we support the roll-out, oversee installation and complete the testing.

What has to be considered after the roll-out of a charging park?

Soeren Schrader: You definitely need constant monitoring. This for example can be done by an external operator, who will usually charge a fixed cost per station. If you plan for a high demand, say 20.000 to 50.000 charging ports, an asset management platform makes sense. We have developed a platform which can be customized for every use case, to stay in control, support financial and administrative functions, and steer what is happening.

“There might be a business case for charging park operators.”

What are the opportunities connected to fleets switching to EVs – for example in terms of supporting power grids?

Soeren Schrader: Bi-directional charging is definitely on the short-term horizon. From the grid perspective it could make a lot of sense to also de-charge in certain times. Charging parks are very decentralized and could be used to support the grid when there is congestion. In California, there is already regulation in place to deal with power shortages, for example by turning loads down or shifting loads to a different time. We have already identified business cases for charging park operators by supplying energy to certain energy markets.

Philip Potkowski: Electric vehicles have multiple advantages allowing them to succeed against Internal Combustion Engine vehicles (ICE). Supporting grids is one advantage, which will become a key differentiator for fleets. Using energy in the most efficient way has a cost benefit that will translate into the businesses of OEMs as well. We see bidirectional charging technology being installed in more EVs, and the release of ISO15118-20 will be another enabler for power grids supported by electrified fleets.