A panel of industry leaders explores the benefits and the best strategies for transitioning to a zero-emission vehicle fleet today
Increasing pressure on businesses to decrease carbon emissions, lower operating costs and remain competitive has made the electrification of logistics fleets a daunting, but necessary, step forward.
However, questions like where to begin and how to reap the benefits of electrification are just a couple of the major starting line questions fleet operators struggle to address.
This month, Electric Autonomy hosted a discussion about how businesses can convert fleet and infrastructure to enable the transition to zero-emissions transportation. Panelists from HSBC Bank Canada, ATCO Electric, Deloitte and Pride EV gave specifics on electrifying a medium- and heavy-duty logistics fleet and highlighted the importance of upfront planning, choosing the right charging infrastructure and leveraging government incentives.
A replay of the full panel discussion, sponsored by HSBC, is available below.
Here’s a summary of the highlights.
When it comes to electrifying fleets, operators have a myriad of concerns they want answers to before making the switch.
Angie Lamarsh, head of sustainable finance at HSBC Bank Canada, says the top concerns fleet operators face include the technological risks and uncertainties related to vehicle maintenance, asset lifespan and how batteries perform — especially in adverse weather conditions.
The second concern centres on charging infrastructure, particularly for clients operating vehicles beyond dense urban areas. This includes how to right-size charging facilities in warehouses, ensuring an adequate power supply, as well as making sure there are charging options along their driving routes.
Clients that operate in waste management services, postal services and EMTs also have specific concerns about power outages and how that will impact essential services, says Lamarsh.
“The last major area of concern I hear from clients really focuses on cost and supply chain,” says Lamarsh. “We always talked about the total cost of ownership, but that upfront CapEx spend is often front of mind, particularly given the last number of years [and] challenges with the pandemic or the current interest rate environment.”
Delays in receiving vehicles can also create challenges. When clients are making decisions to electrify, they often do it quite close to when they actually need the vehicles, but there can be significant supply chain delays in delivery, says Lamarsh.
“[This] can create a bit of a tension point within the team to make those decisions,” she adds.
Performing a feasibility study
To address all of these concerns, each panelist strongly recommends conducting a feasibility study and engaging in upfront planning.
Pride EV, a logistics company based in Mississauga, is electrifying its vehicle fleet. The company began the process three years ago and Javed Nadeem, vice-president of EV infrastructure at Pride EV, attests to the importance of upfront planning.
During the initial planning stages, Pride EV had to address several critical questions from an operational perspective. These questions, says Nadeem, included the size of the electric fleet, the scale of their electrification efforts (whether to begin with a substantial rollout or initiate a pilot project with small steps), which electric vehicle models were appropriate in terms of range and accessibility, which routes were ideal for trial runs, how flexible Pride could be in their operations, and what the expected return on investment would be.
The company decided to start with a small-scale project with some complimentary pilots but faced some hurdles due to supply chain issues.
“There are a lot of steps we learned, especially engaging in early planning,” says Nadeem. “[Early planning] is [one of the] few things we did and it’s definitely paying off now that we are ready to begin with a larger and bigger fleet with this.”
Nadeem draws a parallel between charger technology and smartphones like iPhones, explaining that technology is constantly evolving. Waiting for the final product isn’t practical and it’s better to embrace the economic and sustainability benefits of current technology now, he says.
Adding the right charging infrastructure
When setting up charging infrastructure to support an electric fleet, a substantial amount of planning needs to be done to match charger types to vehicles.
“The biggest mistake I see electric fleets doing today is they’ll procure one or two vehicles and they’ll install just the infrastructure for those two vehicles,” says William York, senior engineer for eMobility at ATCO Electric.
“But what you really should have done is had a feasibility study that told you these are your facilities, this is their electrical capacity and this is how much electric fleet of this type they can support.”
This approach helps prevent companies from incurring additional costs in the future as their electric fleets grow.
“When you go to install that infrastructure, you should identify a location at your facility that can accommodate all of your medium- to long-term infrastructure needs and that you’re installing that infrastructure in such a way that allows you to easily scale up your fleet.”
Nadeem also highlights the importance of obtaining the proper permits from utilities and the municipality for constructing the charging infrastructure.
Supporting aftercare of charger installations
Planning also needs to take into consideration the ongoing maintenance and uptime of the charging infrastructure once it is installed.
Both Nadeem and York emphasize the importance of selecting a reputable supplier and conducting due diligence to ensure that the charging infrastructure design aligns with all the operational, financial and strategic planning needs of the project.
Starting with a smaller-scale approach and ensuring proper maintenance of the charging infrastructure is crucial.
“A simple tip for charger maintenance is cable management systems,” says York.
One of the most common issues with charging stations is cable damage, often caused by vehicles driving over them. Investing a bit more upfront in a cable management system that keeps the cables off the ground can save on costs, especially for DC fast charging stations, says York.
The uptime of charging stations is important, but York recommends putting in slightly more infrastructure than needed, in order to account for downtime.
“I think that more effort should be spent on just a little bit more infrastructure per site to get the reliability on a site basis, rather than a per equipment basis,” says York.
“There’s just not infinite capital to spend on quality assurance, quality control and component manufacturing tolerances. I think it’s better to just buy a second Level Three [charger] and call it a day.”
Unlocking government funding
The extensive work and planning involved in electrifying a logistics fleet and setting up charging infrastructure has significant upfront financial costs, says Samira Dadgar, partner, global investment and innovation incentives at Deloitte LLP.
“Governments provide lots of incentives across the country, but what we hear from clients a lot of times is [they have difficulty] navigating through these incentives,” says Dadgar.
There are various incentives fleets can take advantage of for vehicle purchases, site assessments, and piloting electric vehicle operations.
For charging infrastructure there is the Zero-Emission Vehicle Infrastructure Program (ZEVIP) that gives a maximum of $10 million for a project.
Different provinces also have their own incentives that can be stackable with federal funding, says Dadgar.
In order to take advantage of these incentives, “my best recommendation is really to try to plan ahead,” says Dadgar. “There are incentives that only have one or two intakes per year, so you’ve got to really plan ahead [and] have a proper budget for the next few years.”
In Budget 2023, the federal government also announced a Clean Technology Investment Tax Credit for companies that are deploying clean infrastructure, says Dadger. With this tax credit, fleet operators can get up to 30 per cent of the capital cost back in cash for installing charging infrastructure.
“There is a higher purpose we’re all driving towards as well as the sustainability of the business model and financial returns — and collaboration is key,” says Lamarsh.
“The more that we can be learning from each other and supporting each other, the more that financial institutions and professional services can be building better fit-for-purpose solutions for our customers [and] government can be appropriately fitting regulation.”