The latest EV suitability assessment from Geotab, the fleet tracking and management specialist, finds North American companies that delay fleet electrification risk a hit to their bottom line
Every day that goes by, the financial case for widespread fleet electrification grows stronger. A new study from Geotab, an Oakville, Ont.-based fleet tracking and management services firm, shows that North American companies that continue to use combustion vehicles instead of EVs are paying out hefty sums in avoidable costs.
The study looked at EV suitability for 179,000 vehicles (cars, SUVs and minivans) across 3,500 North American companies. Those companies represent 24 individual sectors. The criteria involved taking the actual daily vehicle usage rates and trip temperature conditions over a year and comparing them to the performance of EVs available on the market. Then the total cost of ownership between the combustion and electric vehicle offerings are compared.
“I was excited to see the results because we’ve never assessed EV suitability on such a large scale,” writes Charlotte Argue, senior manager of fleet electrification at Geotab, in an email to Electric Autonomy Canada. “Looking at the data tells me fleet operators are losing money by not electrifying. The cumulative opportunity in the light-duty fleet space is also eye opening — for cost savings but also for emissions reduction potential.”
Ample suitability — and savings
According to Argue, fleets that transitioned early on or started in the last year are coming up on the right side in several areas: financial savings; practical benefits of low-cost overnight charging; reduced cost and downtime for vehicle maintenance, and advantages provided by government incentives. On the other hand, fleets still sitting on the sidelines are seeing their capital leak through the cracks and watching their competitors get ahead.
Before getting to cost, Geotab’s study looked at EV range and fleet suitability. It found that for nearly 50 per cent of fleet vehicles today there is an existing battery electric vehicle available today that would be range-capable for over 98 per cent of their daily needs.
“Some fleet operators may shy away from a BEV if they haven’t completed a suitability assessment for their vehicles. It’s easy to overestimate how far your vehicles need to go each day if one doesn’t actually look at vehicle mileage,” writes Argue. “This is why leveraging collective data can be helpful.”
In terms of realizing immediate cost savings, 26,000 fleet vehicles or 30 per cent of the total fleet vehicles would have a lower cost of ownership over a seven-year lifetime as an EV than their ICE counterpart — that’s without factoring in the incentives that go along with purchase.
“Just comparing the sticker price of an EV to an ICE favours the gas vehicle. A total cost of ownership (TCO) approach shows that in more cases than not an EV will save the fleet money in the long run, which should justify higher upfront spending,” writes Argue.
Plug-in hybrids and incentives
When plug-in hybrids are included in the analysis, the cost-savings opportunity is even greater. There, Geotab’s research found that 64 per cent of fleet vehicles could be switched to a comparable fully electric or plug-in hybrid option for less money (over the same seven-year service life) before incentives are applied.
The study also looked at the impact of government incentives on the equation. While the value of available incentives varies by province, Geotab found that even with a modest $2,000 rebate, 87 per cent of fleets would be more cost-effective switching to EVs.
A $4,000 incentive extends the advantage to 95 per cent of all fleets, with an average saving of $6,000 per vehicle over a seven-year service life.
Industry experts and trend spotters are hoping 2021 will be the year of the electric pickup truck. At that point, fleet transition may start to look more appealing to companies that rely on the “tougher” utility models — at the very least they will be able to test out a vehicle that actually looks like its ICE counterpart, which brings a sense of familiar comfort to a shy new-EV buyer.
“EVs would be capable of meeting the needs of many fleet applications across different sectors. What was most impressive to me was how many could do so at a cost savings to the fleet owner,” writes Argue, who also says more incentives, better education and access to assessment tools are essential to the transition.
For its own part, Geotab’s next wave of assessment tools are coming in the form of Geotab Energy — a new arm of the company dedicated to helping utilities with demand management as more electric vehicles and EV chargers are added to the grid. Geotab Energy launched in North America in January, with plans for international expansion in the future.