Row of Tesco electric vans being charged

The EV Charge: the four factors driving fleet electrification

Tuesday, May 24, 2022 - 07:36
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The adoption of battery electric vehicles (EVs) has sky-rocketed in recent years. In the UK alone we have seen a dramatic increase in the number of EVs on sale, with more than 40% of models now available as plug-ins.

Many of those vehicles now form large commercial electric fleets, owned by global businesses that have committed to ambitious sustainability targets. Amazon, for example, has become a leader in fleet electrification as an integral part of its Climate Pledge targets. This appetite for EVs from some of the world’s biggest fleet operators has also led to a significant increase in the deployment of electric medium- and heavy-goods vehicles, and buses are set to follow, supported by public sector funding programmes such as the ZEBRA (Zero Emission Buses Regional Areas) scheme in the UK.

So, why is global fleet electrification accelerating so rapidly? There are four key drivers behind the movement, with a number of policy catalysts and global events likely to increase momentum.

  1. Mercedes Benz truck being chargedThe carrot-and-the-stick

The carrot-and-the-stick approach is being used by governments around the world to drive the electric agenda. Our society depends on commercial transportation to function, but this essential transportation is one of the biggest sources of carbon emissions. To address this and help curb climate change, policymakers are setting ambitious new targets, such as the EU’s pledge to reduce net emissions by 55% by 2030.

It is now widely understood that EVs will play an indispensable role in reducing this footprint. By the start of 2021, 31 countries, states and cities had already put new combustion engine vehicle bans in place and in 2020 alone the world saw $14bn in global government incentives for EVs. These restrictions and rewards are both forcing and incentivising businesses to speed up their timelines for switching to electric.

  1. The Private Sector Drive

The private sector is driving the electric agenda every bit as much as governments around the world. Not only are EVs cleaner, but they also offer significant operational savings. The TCO (total cost of ownership) of commercial EVs is in most cases now less than their petrol or diesel equivalents and this cost-effectiveness will continue to improve as technology develops and economies of scale take effect.

These commercial benefits are key factors in driving the pace of change, alongside the move to protect the planet, satisfy customer demand for environmentally friendly solutions, and maintain corporate reputations. Over 100 of Climate Group’s EV100 members have committed to transitioning five million fleet vehicles to electric by 2030. There are an estimated 6.3m vehicles in UK fleets today and 15m EVs are expected to be part of corporate fleets in the U.S. by 2040.

  1. Amazon Prime vans being chargedSignificant Availability of Electric Vehicles

Previous anxieties around vehicle dependability, product availability and range for commercial EVs are rapidly disappearing. As the industry has quickly adapted to growing EV demands, manufacturers now offer a broad selection of models, with over 20 fully electric light commercial vehicle models available in the UK alone.

Recent strategic electric pledges from OEMs (Original Equipment Manufacturers) will lead to the sale of between 55 to 72m electric light-duty vehicles by 2025. Our headlines frequently announce fleets of all sizes snapping up electric trucks, vans and buses in the thousands, such as Tesco committing to a fully electric home delivery fleet in the UK by 2028. Incumbent OEMs are creating new electric models as they are challenged by a number of pure-play electric newcomers. Everywhere you look, the increased demand for zero-emissions fleets is being answered by manufacturers responding with scale.

  1. Large Scale Growth in Ecommerce & Last Mile Delivery

Ecommerce was catapulted into a global explosion of necessity during the pandemic, which created subsequent requirements for last-mile delivery. In 2021, estimates suggested that 2.1bn people bought goods online and 20% of global retail will move online by 2023.

By 2030, we’re expected to see a 36% increase in last-mile vehicles on the road, but this growth must take place in a way that respects government-imposed targets on carbon emission reduction. eCommerce fleets need zero-emission and financially efficient vehicles to meet the growth of the sector, and they need the infrastructure to power them. Through our work providing EV infrastructure for numerous leading home delivery fleets, we know that the ecommerce sector is already making great progress.

Fleet electrification has gained rapid traction in recent years, heavily influenced by these four factors. What is clear is that all of these drivers – from government incentives and penalties to mass manufacture and a private sector compelled by a range of commercial, ethical and reputational benefits – are set to continue for a long time to come. This cocktail of macro-economic factors will see that fleet electrification becomes a long-term global revolution over the coming decades.

Author: Charlie Jardine, Founder and CEO at EO Charging


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