Thinking about taking a commercial fleet electric? Do your research

Do your homework.

That’s the message Jay Collins, SVP and general manager of the energy transition at global commerce platform WEX, has for commercial fleet operators who are contemplating going electric.

WEX, which helps manage commercial payments via software solutions, recently commissioned a study from Frost & Sullivan on commercial EV adoption. The results suggest that, overwhelmingly, fleet operators are planning to go electric—but fully electric fleets are still a long way away.

While US retail consumers are still wary about going electric, the picture is a bit different for commercial customers.

The survey found that 80% of global commercial fleet leaders plan for at least 25% of their fleets to be electric by 2030, while 42% said they expect at least half of their fleets to be EVs by then.

“It’s an indication to me that those who are doing it, and doing it right, see continued conversion ahead,” Collins told us. “It’s not about if or when. It’s about how best to get it done.”

WEX’s customer base spans both the private and public sectors. But Collins said a “common theme” is that when the transition is executed well, “the value is there. And the value comes in two forms: sustainability, but also total cost of ownership.”

Getting it right, he said, comes down to three factors: finding the right use case, vehicle, and charging strategy.

“If you get those three things, you’re going to get a really good experience out of the energy transition,” he said. “If you get one of them wrong, it can be a really negative experience…So this idea of doing your homework is really important.”

• Decarbonization is driving the transition: Some 70% of respondents said decarbonization was an “important” or “cornerstone” aspect of their business strategy, while only 3% reported not considering decarbonization as a factor.
• Fleet managers are looking for help with digital tools: Nearly 60% of respondents reported struggling with route planning, while nearly half said data collection is an obstacle. About 40% said they have trouble integrating fleet management software for EVs and ICE vehicles.
• Operational efficiency is important: About half of organizations reported that they’ve already invested in charging infrastructure.

The report also homed in on some of the sticking points for businesses: The top challenge was the cost of fuel, followed by operational costs, and then profit margins. Basically, going electric must make financial sense.

US fleet operators reported “significant challenges with proprietary charging hubs,” according to the report, with 65% of US respondents identifying the cost of installing charging infrastructure at depots as the biggest obstacle.

The survey included 110 US organizations, 82% of which reported that cost savings are the primary driving force behind their decarbonization efforts.

More than half of US organizations surveyed have established “clear decarbonization targets,” according to the report. Large fleets of up to 499 vehicles are “particularly focused” on these targets.

There’s additional research showing that the EV transition is going a bit smoother for the commercial segment. Fleet owners who have both EVs and ICE vehicles are more satisfied with their battery-powered vehicles, according to a July report by Cox Automotive.

The study found that 14% of fleets currently have EVs, but that there will be a “significant trend toward EV adoption” in the next five years.

“There are certainly challenges in shifting a business away from traditional ICE powertrains,” Zo Rahim, senior manager of research and market intelligence at Cox, said in a statement, “but if owners and operators are generally satisfied with the outcome and see tangible savings, EV adoption could certainly accelerate through the end of the decade.”