Will Electrification Have a Negative Effect on Fleet Performance? | Utilimarc Fleet FYIs

Gretchen Reese (00:07):

Hey there. Welcome to the Fleet FYIs podcast, the weekly podcast by Utilimarc that reveals how you can make the most of your data for smarter fleet management. My name is Gretchen, and every week you'll hear from me or some of the industry's finest in candid conversations that will not only shed some light on over two decades worth of fleet data insights, but also some of the industry's hottest talking points and key metric analysis with the aim to help you better understand your fleet from every angle. But before we begin, if this is the first time you've heard our show, thanks for stopping by. I'm so glad you decided to come along for the ride with us. But I've got a quick favor to ask you, once you finish today's episode, if you could take a few minutes to leave us a review on your favorite podcasting platform, we would really appreciate it.

(01:10):

Give us a rating, five stars, I hope, or tell us what you liked or leave us a comment or a question about what you've heard in today's episode. If we haven't yet covered a topic that you're interested in hearing more about, let us know. We would be happy to go over it in detail in a later show.

(01:34):

Hello everyone and welcome back to another episode of the Fleet FYI's podcast. I wanted to bring back a popular topic today because we haven't really talked about it a lot lately, but I feel like it's still a really important piece to this whole electrification, new technology and sustainability movement. We all know at this point that fleet electrification is well underway within many different sectors across the world, from municipal fleets to last mile delivery vehicles, so on and so forth. Now, with sustainability goals becoming stricter and more urgent, a lot of fleet managers are drawn to the electric vehicle promise of zero tailpipe emissions. Obviously, there's other solutions there that can also get a similar, if not the same result, but electric vehicles tend to be the most popular and the most easily adopted, I should say, technology right now.

(02:27):

There's also some that are more attract to the idea of less routine maintenance and associated upkeep costs, even though the purchase price tends to be a little bit higher. But despite the benefits of switching from internal combustion engine vehicles to electric vehicles, there's an inarguable lack of EV options available to fit everyone's needs. If we look back to 2020, there was about 370 models of the electric car out on the market, with electric pickup trucks in very early production and electric utility vehicles being practically nonexistent. Because of this, total electrification simply just was not a possibility for all fleets. Now obviously things have changed since then with the release of the Ford 2022 Lightning and also a few other options, which if you take a look at the Utilimarc site, we've just put out a piece that is, I think, super exciting because it's talking about some of the newer EV models that just hit the market like the eM2 from Freightliner. You have the all-electric bucket truck that was unveiled at UFMC by Terex, and you also have an all-electric fire truck that's being trialed in California as we speak.

(03:38):

But here's the thing, even when these vehicles, the right vehicles for your fleet become available, there's still a question of whether or not they truly are the better option, because I'm sure you've probably heard that being thrown around there too. Fleet managers need to justify that the electric vehicles would perform at not only the same level as their current internal combustion engine models, but also you need to be able to prove that it's worth the financial investment in this new technology. Think about it this way, it's really hard to justify a major financial investment in something where you're also going to see a significant decrease in performance, potentially maybe leading to the purchasing of two vehicles where one may have previously been able to do the job.

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Now, before I dig into this core piece of the episode, because I'm sure this is probably what you all tuned in to hear today, I just wanted to let you know quickly just in case you missed it in the last couple episodes, we have a LinkedIn newsletter now, which is called This Week in Fleet by Utili Marc, and I'm so excited to share it with you every single week I get to give you a behind the scenes exclusive look in the fleet industry where I can show you some of the new trends, the new technologies, and just everything that's going on. So you can actually head over to LinkedIn right now, search This Week in Fleet, and you should be able to find it. If not, there will also be a link in today's show notes as well. But now that that's out of the way, let's dig into the episode.

(05:24):

So let's kick off with probably what most people are... I would say probably the most curious to know about this whole challenge with electrification, and that has to do with who and by who, I mean fleets, which fleets are most likely to struggle with EV adoption? Still, even as we're a few more years into this electrification movement than we were in 2020, obviously. Fleets can have widely varying purposes, this we all know, operating in distinct conditions and working on different schedules. So for this reason, fleet managers need to consider certain aspects of their fleet's duties that can make them less suitable for electrification. That seems pretty standard, right? But in this case, vehicles with variable routes may have a very strong challenge because since fleet managers need to consider EV range and work routes when they're planning daily operations, some fleets with fixed routes are far more suitable for electrification than those without.

(06:23):

Why? Well, fleets of school buses, postal service trucks and delivery vehicles, they typically follow the exact same route on a daily basis, making it very easy for fleet managers to optimize routes, ensure the vehicle's range will be sufficient and plan when they need to charge their vehicles even with a fluctuation in temperature when battery range can be different, payload is higher, and that could cause more wear and tear on the battery. Now, on the other hand, vehicles with variable routes like say a taxi or emergency services or utility trucks, could suffer a decrease in performance if they are electrified. Why is that? Well, the ambiguity of different routes every single day and a larger disparity in miles driven on one day versus another, that can lead fleet managers to have a tough time optimizing their fleet's performance. But that's true with internal combustion engines as well.

(07:16):

I mean, if you're having these variable routes, you need to be able to plan for multiple scenarios rather than just the one. And here's the thing, since refueling EVs is not as simple as pulling over at the nearest gas station and filling up under five minutes, getting caught with a low battery mid route can significantly disrupt a work schedule. It's not something that you want to have pop up, right? It could force delivery drivers or even just drivers in general to decline a last minute job due to insufficient charge. If they have those variable routes and it's a job like a taxi, or if it's a job like emergency services, they literally would not be able to respond if their battery couldn't make it to power the accessories or power the vehicle to get to where they need to go and back.

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Fleet managers can estimate just about how many miles a vehicle will drive in one day. But still, again, with this number being a little bit more subjective to how many jobs they're called to on any given day, it can be really, really hard to strategize efficiently, which can be a problem. Now, another fleet situation that I'd like to speak about here is fleets in cold weather regions. Now, we know that EV batteries aren't as temperamental as they used to be, but still, extreme weather conditions can drastically affect electric vehicle batteries, and they can reduce capacity up to about 12% due to slowed or accelerated chemical reactions within the battery pack. This happens not just with EVs, but also with your cell phone. It happens with normal batteries like the double A's or triple A's that you put into a remote, or I don't know, an electric toothbrush, whatever you use your batteries for, can happen with your watch.

(08:57):

Fluctuating extreme weather definitely affects the ways that batteries charge and can actually hold their charge. And this becomes a problem when electric vehicles start performing well below their average kilowatt hour per mile because this can make it difficult for fleet managers to plan routes accordingly. Again, because if you're used to say, for example, 300 miles on a full charge and now you're down to two 50, well, where's that extra 50 mile wiggle room going to be, if you really rely on needing that extra 30 miles on a full charge? That'll be a little harder. In the case of fleets that operate in storm prone regions, power outages can also be a big struggle in terms of operations when it comes to electrification. Now, this isn't cold weather region specific, however, it's just really any area that experiences storms because think about it this way, unlike a gas powered vehicle, when you're refueling with electric charging, you really don't have that option if you have a power outage.

(10:00):

A friend of mine, Dave Myers, who you guys might have heard him on the podcast quite a few episodes ago. We were talking about this, especially when it came to how Quantum Services responded to storms in their service areas. And he said, "It'll be really interesting to see how EVs can respond without the need to bring a generator with you when you go to the site." Because here's the thing, you can't charge an EV when there's a power outage. So how are you going to send an EV into an area with no power? It's hard unless you have the backup power necessary to be able to power your fleets. Makes sense, right? This can make some of these electric vehicles a little bit too inefficient or potentially too futile to deploy, especially if they can't perform in the same way that an internal combustion engine would, because in theory, you still should be able to fuel an internal combustion engine even if there's a lack of power, so that can be a big challenge for a lot of fleets, especially during storm season.

(10:58):

And the last piece of this is if you factor in the charging time, we touched on this a little bit earlier, but still the added element of charging time is enough to weaken fleet performance on its own. So compared to fueling up with petrol or diesel, like I said, in a matter of five minutes or less, charging with a basic level one charger could take maybe 11 to 20 hours or use a level two adapter to charge in three to eight hours for a full charge. And this is these passenger vehicles that we're talking about these are the electric pickup trucks. But in either case, there is a substantial differentiation from five minutes at a gas station. This can make it a lot more difficult for fleet managers to make the most of their vehicles and send out for last minute jobs unless they wanted to have a few backed up that were already fully charged, ready to go, and some of these vehicles could be on more rotation rather than a per driver vehicle assignment every single day. That could be one way to go around it.

(11:56):

But the thing is, and what I'm trying to stress here is that electrification wants, it seems like a fantastic solution or a good solution for some when it comes to zero tailpipe emissions or lowering their tailpipe emissions, it's not a one size fits all solution. It doesn't work for every single fleet because of region or operational necessity. It just won't. So it'll be interesting to see the flexible approach that a lot of fleets will take when it comes to meeting some of these sustainability or greenhouse gas commitments going forward in the future. Maybe hydrogen vehicles will pop up. Personally, I think that would be kind of cool to see myself.

(12:59):

So at the end of the day, these are issues with electric vehicles that we'll likely face and have to find ways around for the foreseeable future. These challenges are not going away anytime soon, that I can definitely affirm. And luckily, the thing here is that strategic planning, telematics data, and a bunch of other data sources, even looking at a business intelligence solution for fleet data can really help with significantly closing the gap of performance disparity. I say telematics because it can be a key tool with EVs helping fleet managers to track daily average usage, locate their vehicles in real time. And you can also combat range anxiety and increase fuel efficiency because you can assign vehicles to mapped out areas and really understand where they're going, how long they're going for, and what their exact routes are consistently every day.

(13:49):

Here's the thing though, I really would love to hear your thoughts on this. Do you think that EVs will negatively impact fleet performance? Do you think that they're great for fleet performance? I'd love to hear your thoughts. Let me know. You can send me an email. You can tag me on LinkedIn, use the hashtag Utilimarc Fleet FYIs, or you can even send me a carrier pigeon. You know the drill. You know where to find me. And again, before I leave you for today, I just want to make sure that if you haven't already, please do subscribe to This Week in Fleet, our new LinkedIn newsletter. I'm so excited to share it with you again every single Friday for a behind the scenes, exclusive look into the fleet industry. And for all of my American listeners here today, I just wanted to wish you all a very happy 4th of July weekend and 4th of July holiday on Monday. Please enjoy the weekend. Please be safe and enjoy the fireworks if you are going to see some. Anyways, that's all for me. Until next week, [foreign language 00:14:47].

(14:54):

Hey there, I think this is the time that I should cue the virtual high five because you've just finished listening to another episode of the Fleet FYI's podcast. If you're already wanting more content, head over to utilimarc.com, which is Utilimarc with a C, U-T-I-L-I M-A-R-C dot com for this episode's show notes and extra insights coming straight from our analyst to you. That's all from me this week, so until next time, I'll catch you later.