Smart fleet planning: How tailored electrification strategies can maximize success
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Opinion
Jun 21, 2024
Maddy Ewing

For most fleets, starting the transition to medium- and heavy-duty electric vehicles is doable now. By conducting a tailored fleet assessment, operators can learn what’s best for their needs and how to begin

Investing in a fleet assessment can maximize the benefits of medium- and heavy-duty vehicle electrification.

For most fleets, starting the transition to medium- and heavy-duty electric vehicles is doable now. By conducting a tailored fleet assessment, operators can learn what’s best for their needs and how to begin

This op-ed was written by Maddy Ewing from Dunsky Energy + Climate Advisors and Meena Bibra of Clean Energy Canada.

When it comes to medium- and heavy-duty vehicles (MHDVs), our minds often go straight to the semi trucks on our highways. In reality, there are a variety of different vehicles and uses. These vehicles include step vans for parcel deliveries, transit buses, school buses, and — yes — those semi trucks transporting goods from warehouses to local stores or over longer distances between cities.

The good news for fleet operators is that there are now electric options for all of these different types of MHDVs. Every fleet is different, however. For this reason, one of the most valuable steps for a fleet, before taking the plunge, is to conduct a tailored fleet electrification assessment.

A tailored assessment tells fleet operators what’s possible to electrify now and in the near term. In many cases, the results are surprising, as companies and other organizations with fleets discover that the journey to reducing their fleet’s emissions and reaping the benefits from the operational savings of EVs can start today.

Understanding each fleet’s needs

Every assessment starts with an itemization of a fleet’s vehicle make-up and use cases. A thorough characterization of the fleet can help operators to identify their low-hanging fruit. Use cases such as last mile, urban and regional deliveries, transit and school buses, yard tractors and drayage are examples of real-world applications that can be electrified today. It’s no surprise that 88 per cent of the federal government’s incentives for medium- and heavy-duty zero-emission vehicles (iMHZEV) go towards vehicles such as work trucks, cargo and step vans.

Take Purolator, for example, which has been successfully deploying zero-emission cargo and step vans across Canada. It has purposefully focused this first stage of deployments on vehicles that are easiest to electrify, which includes vehicles travelling between 30 and 70 kilometres per day.

In fact, real-world operational data shows that 81 per cent of medium-duty trucks and 53 per cent of heavy-duty trucks travelled less than 240 km per day in North America. This is well within the range of many EV models on the market.

On the heavy-duty side, while the weight penalty of batteries is a concern for some fleets, this represents a smaller share of heavy-duty trucks than you might expect. Most heavy-duty vehicle loads are constrained by volume rather than their weight. In fact, 57 per cent of freight truck miles make shipments with less than half-full loads. On top of this, battery density is quickly improving, and over time, that weight penalty will decrease.

All of this explains why conducting an electrification assessment that reflects each fleet’s specific needs is critical. Without a strong understanding of these operational requirements, it’s difficult to understand the impact of electrification on operations.

Building an accurate business case

Of course, technology feasibility and the ease of electrification are one thing, but it’s the business case that often drives fleet purchase decisions.

Operational savings are the principal value-add of electrification. Importantly, these savings are driven by vehicle usage. In other words, the more the vehicle is used, the more savings are accrued. Therefore, properly characterizing future savings hinges on fleet operators ensuring that they’ve accurately accounted for their vehicles’ expected usage. Fleets should also ensure that they’re accounting for revenue-generating opportunities like Canada’s Clean Fuel Regulation or B.C.’s Low Carbon Fuel Standard which could add thousands of dollars in revenue to your business case.

We know that the upfront cost of EVs continues to be a major barrier to fleet electrification. But smaller electric MHDVs like cargo and step vans can show a more promising total cost of ownership that is on par with diesel equivalents, even without vehicle incentives or clean fuel credits. For larger vehicles, the price gap between EVs and internal combustion engine vehicles tends to be larger, and as a result, these vehicles are often still a few years away from total cost of ownership parity (though some fleets are already achieving cost parity, such as Titan Freight with its class 8 trucks).

We expect that upfront vehicle costs will decline as prices for key components like batteries come down. Some organizations predict that some medium- and heavy-duty EVs will reach price parity with their diesel counterparts as soon as 2030. Until then, this highlights the importance of provincial and federal incentives to bridge that upfront vehicle cost gap. For example, in B.C., buyers can stack the provincial and federal vehicle incentive rebates of $100,000 to reduce the upfront cost of a class 6 box truck by approximately 50 per cent.

Finally, it’s critical for fleets to ensure that they’re reflecting reasonable assumptions around the performance of EVs. Real-world data can provide fleets with useful insights. For instance, the Volvo LIGHTS project demonstrated that battery electric yard tractors can achieve a 60 per cent reduction in fuel costs, and are 5-to-7x more energy efficient relative to their diesel counterparts. And data from Consumer Reports shows that EVs — at least on the light-duty side — can reduce maintenance costs by as much as 50 per cent. 

Benefits of starting today

While it’s true that barriers persist for some key segments, it’s possible for most fleet operators to start electrifying today. And in many cases, it’s worth it. Research conducted several years ago found that EVs already emitted fewer emissions on a life cycle basis in all Canadian provinces; those benefits will only increase as electricity generation gets cleaner. EVs can also improve the health of communities. According to Health Canada, air pollution caused over 15,000 premature deaths with an economic bill of $120 billion in 2016. Electrifying just 10 last-mile delivery trucks has the same benefit as 56 households buying an electric car.

Every fleet operator can help jumpstart these benefits if they take the time to understand their fleet and figure out where they can start reaping the benefits of emissions reductions and operational savings today.

Meena Bibra is a Senior Policy Advisor at Clean Energy Canada.

Maddy Ewing headshot

Maddy Ewing is a Senior Consultant at Dunsky Energy + Climate Advisors.

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