Electric vehicle charging Element Fleet

Fleet electrification is just around the corner

Thursday, January 6, 2022

By: Avninder Buttar, Vice President of Strategy and Jason Kazmar, Director of EV Strategy & Sustainability

There are many tailwinds behind fleet electrification, ranging from changes in legislation to growing interest in corporate fleet sustainability.

Considering these trends, BCG expects that 47% of all light vehicles sold globally will be fully electric or hybrids in 2025. You may be asking, with global shutdowns and supply chain shortages driven by the pandemic, what happened in the electric vehicle space for things to move so quickly? Here are the 5 tailwinds driving fleet electrification and how you can get started today.

5 tailwinds driving fleet electrification

EV Tailwinds

1. Governments continue to influence EV adoption 

  • A mix of mandates and incentives across Europe, China, and North America is accelerating EV adoption according to BCG, specifically Europe’s 2050 emissions mandate for light duty vehicles.  
  • Subnational governments in California (US), Massachusetts (US), British Columbia (Canada) and 15 countries have plans to phase out ICE vehicles by 2035-2040.  
  • What this means for you: Ensure that you evaluate all possible incentives that can help to reduce the investment required to electrify your fleet.

2. Falling battery costs are expected to bring TCO parity by 2024 to 2026 for many light-duty vehicle use-cases

  • Batteries make up 30-35% of the cost of an electric vehicle and prices have fallen significantly over the last 10 years from $1,000/kWh in 2010 to $132/kWh in 2021.

  • Auto manufacturers have endorsed analysts’ projections of reaching $100/kWh by 2024-2026. This is the level needed to reach TCO parity.

  • What this means for you: Use EV inclusive TCO tools to find early opportunities to electrify your fleet where the TCO is comparable between ICE vehicles and EV’s – this will help you to manage the costs of early electrification and develop the necessary learnings to adopt EVs at scale.

3. EV availability continues to increase in the near-term

  • Announced EV models are expected to jump from 300 in 2021 to over 1,000 in 2030.

  • Model availability is expected to grow in all classes. While there are less than 5 truck/van EV models today, availability will almost double in 2022 and again by 2025.

  • What this means for you: Pilot available EVs today at a small scale so that you put yourself in a readiness state to electrify quickly when TCO parity is reached for your relevant vehicle classes.

4. Fleet electric vehicles are charged most often at home or workplace settings

  • There are 3 main models for EV charging: home, depot/workplace, and public charging. Over 80% of charging is done in a private setting.

  • Five networks make up 80% of Direct Current Fast Charger (DCFC) public networks, but the US and Canada are far behind their peers in public charging by several per capita measurements.

  • What this means for you: Ensure that home/depot/workplace charging is part of your infrastructure deployment strategy to mitigate the cost of large-scale public charging.

5. Corporate fleet sustainability continues to drive electrification

  • Light duty vehicles account for most transportation emissions and medium/heavy duty vehicles a quarter.

  • Corporate fleets under two advocacy organizations – the EV100 and the Corporate EV alliance – have pledged 100% zero emission light duty vehicles by 2030.

  • What this means for you: Review your organization’s sustainability goals and engage stakeholders early on to ensure you are getting the internal support needed.

How you can get started today

No matter where you are in your EV journey, there are 5 critical phases for a successful electrification program: developing your program strategy, assessing suitable EV candidates, planning your EV pilot, piloting, and monitoring results, and scaling your learnings. Ready to find out more? Download The Path to Electrification tip sheet or get in touch with an Element representative today.

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