Post-Covid Fleet Electrification

Post-Covid Fleet Electrification



By Lukas Neckermann

August 2020



COVID-19 will accelerate many global trends – especially social and technological trends.  Working from home, home-delivery, broadband usage, automation and robotics have all spiked irreversibly during global lockdowns. Although perhaps it doesn’t immediately look like it, vehicle electrification – with fully-electric vehicles – will also grow post-crisis.

We’ve written previously about the risks, benefits, and opportunities for building resilience in a pandemic with electric vehicles.  Countless articles have discussed the sustainability advantages of electric vehicles.  But in a time of record unemployment and economic contraction, should air pollution and emissions-reduction really be a primary concern for fleet managers? Especially when needing to turn every dime to emerge stronger, and when there are still too few vehicles to choose from?  We will argue, yes – it’s a win-win.
 

Air Pollution Worsens the Effects of COVID. But COVID Reduces Air Pollution.

As the EPA attests, “Air pollution emitted from transportation contributes to smog, and to poor air quality, which has negative impacts on the health and welfare of U.S. citizens.  More specifically, air pollution has long been known to worsen respiratory and heart-related illnesses, and contributing to acute respiratory infections in children.  According to the US National Institutes of Health, it’s the cause of “millions of human deaths annually.” 

It now appears that it may have also exacerbated COVID-19 mortality in the United States. According to a preliminary study by Harvard’s School of Public Health, even “a small increase in long-term exposure to PM2.5 leads to a large increase in the COVID-19 death rate.” 

The correlation between coronavirus and emissions from transport goes both ways. What goes up, can also go down. There was a temporary 20-30% drop in emissions globally during pandemic lockdowns, as road and air travel was vastly reduced. Across parts Europe, where more drastic action was taken to combat the spread of the virus, the drop was by even more than half.

We know that over half of total NOx emissions are attributable to transportation, and a large part of this is from road-transport.  But shutting down transportation simply isn’t a viable option for a thriving economy.  Changing it, however, is.
It’s not a secret anymore that reducing the emissions of vehicle fleets yields health benefits, and there is little doubt that governments around the world (potentially loosening targets in the US notwithstanding) will intensify efforts to promote public health by reducing emissions post-coronavirus.  The argument goes: this might even save lives in the next pandemic. 

So, what can we do – or more specifically, what can a responsible fleet management expert do – to contribute to public health?  Common sense solutions, such as driver-training for efficiency and fuel-savings is the low-hanging fruit. The next (and very obvious) step is to evaluate full electrification – for the sake of health, for the sake of cost, and for the sake of fleet resilience.
 

Options for Your Post-COVID Fleet

Globally, COVID has not just raised attention toward the necessity to electrify fleets; in some countries it has accelerated the trends toward it.  For example, while gasoline and diesel car sales dropped by over 50% in Europe in March, April, and May, plug-in vehicle sales actually increased, even doubling against previous year – with a particular focus on BEVs.  This performance wasn’t replicated in the US or China, however, where overall EV sales more closely tracked overall sales drops.

In the US, the Tesla Model 3 continues by far and away to be the best-selling vehicle in its segment – outselling the (more expensive across its lifetime) BMW 3 Series two-to-one in the first half of 2020, building on the segment-busting success of its stablemate, the Model S. Yet in spite of Tesla’s success, the US is not even among the top-10 countries in terms of electric vehicle penetration; Norway, The Netherlands, China, France, and even Germany each boast much higher proportions of plug-in vehicles. 

The issue in the US, of course, is the lack of vehicle choice.  US car-buyer can currently place orders for fully-electric models from Audi, BMW, Chevrolet, Ford, Hyundai, Jaguar, Kia, Mini, Nissan, Porsche, and Tesla – with prices from $30,000 to over $110,000, and electric-vehicle range up to around 400 miles.  But still, there aren’t enough fully electric SUVs and pickup trucks available for our red-blooded American tastes.

Enter, a whole fleet of US-made, US-focused, all-electric people and pallet movers – due to launch within the next 12 months.

  • The AWD Rivian R1T will be available by the end of this year and promises more than 400 miles of driving range.  That’s roughly equivalent to that of a higher-engine F-150, although the Rivian’s acceleration puts any gas-burner’s to shame. At 3 seconds to 60mph, it’s destined to peel a driver’s cheeks back to their ears. Amazon, an investor, has already ordered 100,000 of Rivian’s delivery vans – not because they are fast or good-looking, though, but because it will make their delivery service more efficient, reliable and cost-effective.

  • Lordstown Motors, which is about to go public in an unusual, $1.6bn merger with a shell-company, will build its good-looking Endurance pick-up in a former GM plant in Ohio. The $52,500 truck is targeted specifically to commercial and fleet customers, including utilities and municipalities, and has received tens of thousands of orders already.

  • Nikola is setting up to offer various vehicles, from its hydrogen-based semi-trucks, to electric and fuel-cell versions of its 2022 Badger pickup trucks. The Badger is said to be able to launch from a standstill on a 30 percent grade, while pulling a trailer at a combined weight rating of 18,000 pounds. This would appear to be sufficient for most users. Nikola has even successfully launched an electrified garbage-truck.
     

With stats like this, this trio of companies may just put a dent in the F-150’s reign as the best-selling vehicle in the US. Still, many fleet managers will be hesitant to order from companies without extensive dealer networks – however well-funded they might be.  Cadillac will have an SUV and Ford will present its F-150 sometime in 2021. And do we need to mention the Tesla Cybertruck?
 

Why Else to Electrify?

Public health is a key reason to begin making the switch, today.  But there are three more, which may tip the scales:

  1. The business case for it remains strong and gets better every year.  The operational costs (fuel, maintenance) of BEVs are – by and large – much lower than gas or diesel vehicles. For many fleets, this compensates for still slightly higher capital investment. In addition, in some cases, there’s congestion charging or other city entry restrictions to contend with (even more so, outside of the US).

  2. Over time, vehicle choice in internal-combustion engine vehicles will go down, while BEVs will go up.  It’s not quite urgent yet, so don’t stock up on gas-burning pickups. But according to research consultancy BNEF, “global sales of internal combustion engine vehicles peaked in 2017 and will continue to decline in the coming years due to the lingering effects of COVID-19 and increasing sales of EVs.”

  3. Investors.  More and more companies (including multinationals like have committed to reducing their carbon footprint in line with corporate sustainability goals.  Do fleet managers care about investors? They should, because their boss does.  The finance director is watching the share price, and if your company is not ESG compliant, there is a flood of investors divesting their worst-performing, non-compliant shareholdings.

COVID-19 opened the door to dramatic changes in society and technology – accelerating time. For most fleet managers, electrification is not a question of “if”, but of “when”, or “how quickly can I get it done”.  To put it another way – it’s about leading the trend or falling behind.

 
 
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