The transition to electric vehicles is coming sooner than you think. the Infrastructure Investment and Employment Act, signed by the president last year, provides more than $7 billion in funding for electric vehicles, including the creation of a national network of half a million electric vehicle chargers distributed along the road network interstate of the country. The move, the single and largest U.S. investment in electric vehicle (EV) charging infrastructure to date, provides further evidence of the growing momentum behind the shift to EVs taking place across the country.
The move also offers additional encouragement to fleet owners considering moving away from gasoline and diesel vehicles. Why? Building and maintaining large-scale electric vehicle fleets is going to take more than just buying a bunch of vehicles and plugging them into a wall outlet. The transition to electric vehicles will require investment in new charging infrastructure, both private and public, to help manage the energy supply and consumption of a wide range of vehicles, including the medium and heavy trucks which dominate maintenance and delivery fleets. Fleet owners will need to work with utilities to upgrade the power grid at the connection point and, in some cases, contribute to necessary upgrades in the grid backbone. The promise of some federal support for these necessary investments can help ease this burden.
Why make a business case for electric vehicles
Investing in electric vehicles is one of the top priorities established by the Biden administration to support the carbon reduction targets set out by the Paris Agreement and reinforced at the COP26 summit in Glasgow. One of the administration’s goals is to have half of all new U.S. passenger vehicles sold by 2030 be electric vehicles and have 100 percent of vehicles on U.S. roads by 2050 be electric. zero emissions. Simply reaching 50% of this 2050 target would reduce carbon emissions by up to 1.5 gigatons per year— which is roughly equivalent to the total CO2 emissions of a medium-sized industrialized country. Similarly, President Biden directed the federal government to acquire 100% zero-emission vehicles (ZEVs) by 2035, further accelerating the adoption of electric vehicles.
It is clear that the environmental arguments in favor of the transition to electric vehicles are compelling. However, is there also a solid business case? Hitachi Energy’s analysis suggests yes. According to consumer reports, the total cost of ownership of an electric vehicle is significantly lower than that of a traditional internal combustion vehicle when you take into account fuel costs and maintenance expenses, which generally offset the higher purchase prices. In fact, the fuel savings alone approach nearly $5,000 per vehicle over seven years.
The likely savings for fleet vehicles are considerably greater, due to the usage profile of the typical delivery or service vehicle, which spends a much higher percentage of the day on the road. Extend these savings to tens, hundreds or even thousands of vehicles, and it’s clear that there is a very compelling business case for making the transition to electric vehicles.
Three steps to prepare for fleet electrification
To successfully electrify private fleets enterprise-wide, fleet owners are going to need to organize the charging of tens or even hundreds of vehicles in a way that does not overwhelm the endpoint or the global network. This will require close collaboration with a variety of relevant stakeholders, from local utilities to utility commissions to infrastructure providers. In many cases, considerable investment will also be required, both at the charging point and throughout the network.
This process will take considerable effort, but there are three steps fleet managers can take to ease the transition to electric vehicles:
- Add intelligence to charging systems. Organizations that operate large fleets should invest in smart grid technology that provides better insight into load forecasting and planning. Valuable insights gained from fleet size and charging time can be used to optimize charging strategies to minimize network impact. Of course, local utilities also need to add intelligence on the delivery side. Remote monitoring and asset management solutions can allow them to monitor power flows, dynamically switch between generation assets, and ultimately help ensure power quality. . By working together, grid management software and EV fleet energy management and optimization systems can exchange information and train to meet EV charging requirements with clean energy from the network.
- Think holistically about total energy needs. Making better energy consumption decisions goes beyond fleet charging. Depots are typically co-located with facilities that use energy in other ways, from warehouses and machine shops to offices. Gaining insight into the impact of electric vehicle charging requirements on overall energy consumption is an essential first step in optimizing energy consumption across the site. Businesses may also want to generate electricity to augment energy supply through on-site solar, wind, or geothermal power plants, and add on-site storage to help manage EVCI demand. Managing these assets can benefit from the same intelligence and automation, in the form of a microgrid, that local utilities rely on to monitor and manage the assets that make up the larger network.
- Collaborate with local utilities and other stakeholders. Fleet managers should work with local utilities, as well as suppliers, equipment manufacturers, policymakers and regulators to develop plans to support the electrification of their fleets. Since depots and charging stations tend to be clustered in specific areas, it makes sense to speak with utilities early in the development phase to help ensure an adequate supply of fuel is available. electricity. According to a recent study looking at the long-term impacts of fleet electrification on the power grid, fleets tend to be clustered in specific areas and can place a considerable burden on the local distribution system. Bridging the gap between the charging needs of fleet owners and the required network upgrades from utilities will require extensive collaboration involving regulators and policy makers. Proactive outreach well in advance of any deployment will help ensure that fleet operators are not left in the dark when it comes time to plug in their vehicles.
Fleet electrification is good business
Electrification represents an attractive opportunity for fleet owners and managers, especially considering the huge investments planned by the federal government over the next decade that will help reduce costs. Businesses need to invest now in smart grid technology that helps them better manage energy demand and consumption, allowing them to sustainably charge their fleets without overloading the grid. By working with local utilities, regulators and suppliers, fleet operators can make significant strides toward meeting the country’s climate goals through fleet electrification, a strategy that can also generate significant economic benefits.
Anthony Allard is Executive Vice President and Head of North America at Hitachi Energy.