6 Reasons Why the Electrification of Fleets is Set To Accelerate In 2021
Let’s face facts.
Internal combustion engine (ICE) vehicles are going out of fashion. The reason?
Automobiles are responsible for huge amounts of greenhouse gas (GHG) emissions.
In the USA, approximately 30% of GHG emissions are caused by ICE vehicles. The problem is that the US economy relies on trucking. Alternative transportation methods such as trains are not feasible due to their size and infrastructure requirements.
It’s no surprise to learn that trucks are the main contributors to global GHG emissions. But is there a way to change this picture?
Yes. Things are changing.
Between 2020 and 2030, market forecasters predict that there will be an enormous growth of 51.6% CAGR of the US electric truck market.
Tesla has already started the trend, with some newcomers emerging such as Nikola Motors.
So, what is driving this growth, and why is 2021 going to be such a pivotal year?
1. The Arrival of Electric-Powered Light-Duty Trucks (LDTs)
Between now and 2030, it’s highly likely that LDTs will dominate the EV truck market.
It is estimated that there are three times the number of LDT trucks in the US and most European countries than any other type of truck. The reason for this is that LDTs are in high demand due to their versatility, low cost, and no requirement for a special license to drive them.
Just think — pickup trucks, delivery vans, small rental trucks, and other last-mile delivery trucks are used in nearly every industry.
In the US, 85% of all truck sales are LTDs!
It makes sense that electric vehicle manufacturers such as Arrival, Rivian, and Chanje are falling over themselves to launch new LDT vehicles in 2021.
It’s not only the EV specialists that are jumping on the bandwagon. Traditional vehicle manufacturers like Ford and Daimler have also announced new electric vans to be released in 2021.
2. Short Distance Vehicles Dominated the Market Until 2020
The last ten years have been dominated by vehicles with a short-range, due to performance limitations and prohibitive costs.
Until recently, most EV trucks on the market had a range of less than 200km. The Mercedes eSprinter for instance, had a range of just 105 miles (170km).
Also, slow charging speeds have put fleet managers off. Most locations don’t have access to fast charging and they don’t want to invest in multiple DCFC.
3. Vehicles with >300 KWh Battery Capacity Will Grow Fast
It may come as a surprise that vehicles with larger batteries will see a rapid growth over the next decade. But the reason is simple. Many truck manufacturers are investing heavily in and concentrating their R&D on heavy-duty trucks (HDT).
The logistics industry is set to transition rapidly to EV usage. This includes both vehicles and infrastructure.
The vehicle battery is still the number one most important component of Evs and accounts for a large chunk of overall cost of manufacture. It accounts for a significant share of the drivetrain cost, and therefore heavily influences the selling price of the truck.
4. Delivery & Logistics Accelerate the Market
Even before the Covid-19 pandemic, delivery to homes has seen consistent and sustained growth.
The lockdown measures to combat the coronavirus has seen an even bigger shift to people shopping online and getting home deliveries.
With this increase in demand, logistic companies are planning even larger CAPEX investments than normal. Many companies are now realizing that the electrification of their fleet makes sense after analyzing investment requirements, operational costs, and future regulations or laws.
In other words, logistics companies have concluded that electric vehicles are simply much cheaper in the long run.
Unlike conventional fuel trucks, EV trucks don’t need oil changes, new filters, or other components, which lowers maintenance costs dramatically. Also, newer generations of EVs have integrated regenerative braking systems, which reduce the utilization of tires and brakes.
Combined with the fact that new technology and innovations have lowered the price of battery packs over the past decade, EVs are now a very attractive option for delivery and logistics businesses.
5. Supportive Government Initiatives
Across the globe, governments are pushing for a cleaner, greener economy.
For cleantech industries, this is good news. With most developed countries and many of the US states pursuing initiatives based on the Paris Climate Change Agreement, this is a good time to go green.
In the US, 24 states have set clear goals to reduce GHG emissions, with some setting the challenge of reducing emissions by up to 28% from 2005 levels by 2025. Germany has gone even further with a GHG reduction of 55% by 2030 to 1990-level.
What this means in practice, is that governments are pouring a lot of money into clean technology. Funding is available in most countries and US states to enable the move towards electric vehicles.
For example, California is intensively funding the purchase of EVs and the creation of extensive charging infrastructure for trucks.
6. New Smart Systems Allow Mass Charging of Vehicles at a Single Location
One major headache for fleet managers has been how to charge dozens of vehicles at one location in time for the next round of deliveries.
The advent of new intelligent charging systems has solved this problem.
New technology allows hundreds of vehicles to be charged in minutes or hours. This means that for the first time, EVs are a viable alternative to ICEs.
A typical fleet depot will need to charge lots of vehicles up in a small window of time — usually, several hours (known as stay-time or dwell-time), before they leave for the next trip. During this time, they also need to clean, inspect, and load up the vehicles.
Until recently, it’s been nearly impossible to coordinate the charging of so many EVs at one location. High grid investment costs, energy prices, and demand charges have made it prohibitive, and most fleets have stuck to diesel vehicles.
Those that have introduced some EVs to their fleet have faced delays due to unfinished charging processes and empty vehicles.
Thankfully, new intelligent software systems have been created that can make complex charging decisions within a few seconds and coordinate the supply of power to vehicles that need it the most.
A system like Ampcontrol completely automates vehicle charging management. The system manages itself, and will soon allow charging of thousands of vehicles at fleet depots for buses, trucks, and other vehicles.
Summary
There’s little doubt that 2021 is going to be a BIG year for electric vehicle fleets.
With the increased demand for LDTs, especially for home deliveries, fleet managers are looking for ways to expand their fleet, while also reducing costs and meeting government regulations.
A new battery technology that provides extended trip ranges and extra government funding means that EV fleets are more viable than ever before.
But the big breakthrough of the past few years has been the revolution in charging. Smart charging systems like Ampcontrol make it cheaper, easier, and more efficient than ever to charge large numbers of electric vehicles at one location.
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