By now, most of the world understands the dire need to lower our carbon footprint. An immense part of combating climate change is done by replacing fossil-based fuels with renewable energy. This transition has caused an electrical vehicle (EV) revolution, which is being sped up by the growing number of countries vowing to ban the sales of internal combustion engine (ICE) vehicles.
According to the Announced Pledges Scenario (APS) which refers to existing climate policy pledges and announcements, 30% of all vehicles sold in 2030 will be electric.
And now, we’re on the brink of yet another revolution — the electrification of fleets. The question isn’t if, but rather how fast will EVs be widely incorporated into fleets?
This guide will walk you through everything you need to consider when making the switch from ICE cars to EVs for fleets and why now is the time to make the transition.
1. What is FLEET MANAGEMENT?
Any company that manages a pool of commercial vehicles is involved in some sort of fleet operations and fleet management. These could be things like company service vehicles, car rental companies, or corporate vehicles. The purpose of fleet management is to oversee all vehicle fleet and asset performance and maintenance—from acquisition to disposal. This helps organizations increase productivity, reduce costs, and ensure compliance across their entire fleet operation.
Fleet managers are tasked with responsibilities such as vehicle maintenance, driver management, asset utilisation, route planning, the implementation of any programs that increase company productivity and decrease instances of waste, and overseeing fuel/electric usage and fuel/charging costs.
Cloud-based fleet management software is typically used to get real-time visibility, historical reporting, and predictive analytics to help make decisions around things like increasing driver satisfaction or lowering fuel/electric consumption.
2. Why FLEET ELECTRIFICATION?
With the increasing global climate crisis at hand, companies are slowly but surely switching from ICE to EVs for their fleets. But it’s not only for the reasons you think. With EV fleet management you can:
Charge wherever you are – office, home, or on-the-go
With electric vehicles, you have the ability to charge up virtually anywhere. EV charging station locations aren’t limited in the way that petrol stations are.
As a fleet manager, or fleet management company, you can obviously offer EV charging stations at your corporate location, but you can also offer your drivers personal home charging stations.
But why stop there? You also have the potential to create a business out of EV charging by offering public charging (more on that later) for on-the-go charging.
Another entirely untapped opportunity is the possibility to create local EV charging hubs around residential apartment homes. EV charging hubs are public stations solely dedicated to electric car charging.
These “hubs” can be built either as standalone stations or directly on an existing premise, like your own corporate site. They would be especially valuable for areas with block apartments that don’t have enough EV charging stations or any EV chargers at all.
Get access to 300 000+ charging points throughout Europe and beyond
The charging infrastructure around the world continues to expand and improve. If you join an existing network like Virta Charging Network, you’ll have access to over 200 000 charging points globally through roaming. Your drivers won’t have to worry about range anxiety.
Have the same upfront investment, if not less, for EVs
In 2021, global plug-in vehicle sales reached 6,75 million units, more than double than in the previous year. The rapid growth of EVs and the abundance of new, affordable EV models both contribute to the accelerating price drops of electric cars. So much so, that the price parity between EVs and traditional ICE vehicles is expected to close within the next five years.
What’s more, the split between capital expenditures (CAPEX) and operating expenses (OPEX) of traditional vehicles versus electrical vehicles is drastically changing.
Have a single bill for your entire electric fleet
Another benefit is convenient billing. No matter how many vehicles you’re managing, you have the option to get a single invoice per month for your entire fleet. Alternatively, if you’d like to get costs allocated by car, driver, or geographical location, that’s possible, too!
Get real-time insights
Have complete control of your fleet and gain real-time insights into driving, charging status, charging behaviour, and energy consumption.
Operate more sustainably and efficiently while fighting climate change
With EV fleets, you are consciously taking steps to reduce global CO2 emissions, allowing you to position yourself as a sustainable employer.
3. ELECTRIC VEHICLE FLEET MANAGEMENT AND SMART CHARGING
When making the switch to electric, there are major differences between chargers. For example, you can easily consume too much electricity, or charging can take much longer than you expect. To get the most efficient charging for your fleets, you’ll want to make sure you invest in smart EV charging.
A smart grid consists of digital technology that creates two-way communication. Like the internet, a smart grid consists of computers, controls, automation, and new technologies that work together, but for the purpose of the electrical grid to respond digitally to our changing electric demands.
A smart grid is a crucial element of carbon-neutral energy production in terms of solar energy and wind power. In addition, a smart grid will add resiliency to our electric system to sustain emergencies such as severe storms and earthquakes. A smart grid also helps to address our ageing energy infrastructure, which will eventually need to be upgraded or replaced.
Basic charging vs smart charging
For EV charging to be part of the smart grid ecosystem, it needs to be “smart” as well. Smart EV charging—also known as intelligent charging—refers to a system where an EV and a charging device share a data connection so that you can manage how your EV charges by connecting it to the grid.
As opposed to basic (or dumb) charging devices that aren’t connected to the cloud, smart charging allows you to monitor, manage, and restrict the use of charging devices remotely to optimise energy consumption.
Smart charging allows EV batteries to store renewable energy during the day when production is typically high. Then, in the evening, when consumption peaks, the charging power can be limited or discharged back to the grid to relieve pressure on the market. This helps to build a more energy-efficient and sustainable environment.
With smart charging, you also have the opportunity to get added to a public charging network (typically found on EV charging apps), which means you’ll attract new customers.
To take smart charging a step further, vehicle-to-grid (V2G) technology enables the charged power to be momentarily pushed back from a car’s batteries to the smart grid to balance spikes in energy production and consumption. This is crucial because EVs can provide a critical source of flexibility in our energy system and help stabilise the volatility caused by renewable energy production.
Advantages when pairing EV fleet management with smart charging
Meet your C02 emission goals
As part of the European Green Deal and the broader goal of reaching net-zero emissions by 2050, the European Union set itself a goal of cutting carbon emissions by at least 55% by 2030—which is way up from the EU’s previous target of 40%.
To meet the EU’s aggressive targets, the auto industry has set its own goal of getting 30 million zero-emission cars on the European roads by 2030.
By pairing smart EV charging with fleet management, you will enable the use of renewables for energy production and be well on your way to meet your own company C02 emissions targets.
4. What factors will determine how fast evs will enter the fleet market?
Vehicle Price and TCO
As mentioned earlier, the price gap between EVs and ICE vehicles is quickly closing. In a study by LeasePlan, they found that the average total cost of ownership (TCO) for EVs is lower than for ICE cars. The major items used when formulating a TCO comparison or calculation between EVs and ICE vehicles are depreciation, maintenance, car taxes, and fuel costs,
LeasePlan studied 912 scenarios across 13 countries and found:
- EVs had a lower TCO than the ICE vehicles in 508 of the 912 comparison scenarios, equating to a majority at 56%.
- The costs of an EV was 5% lower than for a similar ICE vehicle.
One of the most significant benefits of EVs is the ability to opt for higher replacement cycles. Here’s an example from Automotive Fleet:
- Current ICE Replacement cycle 36 mo. / 120 700 km
- Proposed EV replacement cycle 60 mo. / 241 400 km
In many cases, OEM drivetrain warranty coverage for ICE vehicles is shorter than EVs. EV drivetrain warranties include the most expensive parts—battery and AC induction motor— thus getting rid of the costliest repair items of a vehicle.
EVs have fewer moving parts compared to ICE vehicles which mean there is less maintenance needed and further cost savings. EVs aren’t required to go through emission checks (since emissions are non-existent), and they don’t require much of the regular maintenance required for ICE vehicles such as:
- Regular oil changes
- Replacing various filters: oil, transmission, gas, and air
- Topping off fluids: transmission and radiator
- Replacing spark plugs
Moreover, the brake pads and brake rotor last longer with EVs—around double the distance needed before brake work is required. This is because EVs are engineered to generate a charge back to the battery when you release the accelerator, which recaptures inertia energy.
Cost of EVs - Batteries
Global battery demand doubled in 2021 from the previous year. The sheer demand for EVs means that production of batteries is growing and the technology is constantly improving. However, in early 2022, prices for battery metals increased significantly.
Fuel Price: Electric vs Fossil
In a study by the University of Michigan’s Transportation Research Institute, EVs were found to cost less than half as much to operate as gas-powered cars. At the time of the study in 2018, the average cost to drive an EV in the U.S. was $485 per year, while the average for a gasoline-powered vehicle was $1,117. The price difference does depend on the current gas and electric rates of the location, along with the type of car you drive.
Vehicle Range – Charge Capacity
Range anxiety refers to the concern of reaching a destination before an EV’s batteries run out. The truth is, EVs already exceed most drivers’ needs. Most electric cars can travel an average of 300 km on a full battery charge; the latest Tesla S Long-Range can even go for 610 km on a single charge.
In terms of charge time, EVs can now fully charge in 30 minutes, thanks to the High Power Charging stations (or HPC). Moreover, as of 2021, the ratio for EV per PCP (Public Charging Point) was approximately 7.5 EVs per PCP, and we find that most countries already fall under the recommendations set by the EU in 2014 - 10 EVS per PCP. In addition, there were on average 5 fast public charging points for every 100 km on EU highways in 2021.
Emissions Regulation & Government
Many governments worldwide have already enacted laws that ban the sale of ICE vehicles in the coming years. Already in 2030, Ireland, Netherlands, Denmark, Norway. and India will ban petrol and diesel vehicle sales. Israel will also ban the importation of all fossil-fuel cars.
By 2040, the UK, France, and potentially Germany have committed to banning all ICE sales. Each of these government mandates puts public pressure on OEMs to transition to zero-emission vehicles to meet their climate and air quality goals.
5. electric car fleet management solution options
When you’re ready to transition to electric vehicles, there are different fleet management solution options to consider.
Time is of the essence if you want to take advantage of this opportunity because many industries—energy, petrol, automotive, retail, etc.—are quickly realising the business potential of smart EV charging. Market share gains after 2025 will likely become extremely expensive and latecomers will have a tough time entering an occupied market.
With your own branded EV chargers, you can also sell home charging as part of your EV offering. And, if you really want to extend your brand reach, you can join Virta network of over 440K drivers, which continues to grow. When you join Virta, your public stations will be added to the EV charging station map, which will bring the customers to you.
Virta Fleet Solution — everything you need and more
Now that you (hopefully) understand the benefits, revenue potential, and different options for EV fleet management, we’re here to help! Virta is the leading EV charging platform in Europe, and we can provide you with an end-to-end business fleet charging solution including:
- Unified user experience for the entire user journey: home → office → public charging
- Access to 300,000+ public charging stations throughout Europe
- Analytics and reporting to launch and scale your fleet operations
- VAT compliant transactions across Europe — freedom for your fleet to roam
6. why virta?
Fastest time to value with the lowest risks
Building smart EV charging solutions requires expertise, time, and a lot of resources. However, with Virta as your partner, you could be up and running and offer EV charging solutions in just a matter of days.
The network that will connect you with the demand
When you partner with us, you’ll also be part of Europe’s fastest-growing EV charging service provider and benefit from instant access to over 440k EV driver customers.
Expand your business with the forerunners in EV charging
Charging is an essential part of the transition to EVs. With Virta, you can expand your offerings and associate your brand with a high-quality, frictionless, and leading service.
We’ve got the awards to prove it
Virta is Europe’s fastest-growing EV charging service provider and has been leading the EV charging industry on the Financial Times FT 1000 list for 3 years in a row. We don't claim that our solutions are the smartest on the market for no reason. We’ve been honoured with awards for knock-out technology innovations, product brand, and the most intelligent services.
The transition to EVs for fleets is inevitable and advantageous on almost all fronts. However, if you want to take advantage of the business potential of EV charging, the window of opportunity is closing quickly. No matter what option you choose now is the time to start leading the charge of the EV fleet revolution—our planet depends on it.