Is it time to migrate your fleet to electric vehicles?

Those who closely monitor automobile market trends may agree that the industry’s future appears to be headed in an electric path. However, when delving deep into the e-mobility business, one can witness a tremendous movement toward a pro-electric stance. Most of which comes from the most prominent industry players and governmental units.

In fact, EV100, a global initiative led by the global non-profit, Climate Group, aims to make electric vehicle’s the new normal by 2030. Thus, the transition to electric vehicles (EVs) is now inevitable. Businesses and government agencies can reap significant environmental, financial, reputational, and operational benefits by adopting this technology sooner rather than later.

Luiz Munhoz, MD MiX Brazil, shares his insights about the current state in the EV sector to determine the optimal time to transition your fleet to EVs in the context of challenges and advantages to doing so.

Current context and trends

The first motor vehicles in the 20^th century were all electric. However, they were quickly replaced by combustion vehicles due to a simple reason: the low capacity of the installed batteries and the insufficient electrical grid at the time.

Over the last (nearly) 200 years, the automotive industry has thrived, developing large-scale manufacturing, creating millions of jobs worldwide, and providing an ideal way of life. Today, the car has become a symbol of freedom and a consumer’s dream. At the same time, trucks have primarily replaced most alternative modes of transportation (trains and ships), and the mass public transportation system is responsible for most workers’ commutes to work. As a result, the world now revolves around wheels.

However, all of this success has come at a cost in terms of reliance on oil-producing countries’, fluctuations in market prices, which have caused major global crises, and increased emissions of polluting gases into the atmosphere.

As of March 2023, the price of fuel is volatile. Currently, gas prices are sitting at $3.46 per gallon, but they climbed as high as $5 per gallon in many regions. This coupled with the negative impact of greenhouse gas emissions and global warming encourages a shift to alternative energy sources to reduce a fleet’s environmental footprint. 

Almost 41% of the global passenger vehicle market is now covered by internal combustion engine (ICE) phase-out dates or major national zero-emission vehicle (ZEV) targets, according to EV100. This includes markets as diverse as the EU, the US, Canada, China, India, Chile, and Vietnam.

On a global scale, it was estimated that 9.5 million EVs were on the road in 2022 — this number is projected to skyrocket to 80.7 million in 2030, according to The Electric Vehicles: Global Strategic Business Report. The United States and China are the biggest markets for EV rollout, followed by Japan and Canada, which are estimated to expand by 20.7% and 27.3% respectively.

Heavy vehicles

Making the transition to EVs can be more challenging for heavier fleets because there are fewer electric vehicle models available. However, in the US and Canada different incentives are being put into place to make the electrification of heavy vehicles more accessible — namely the Inflation Reduction Act (US) and the Incentives for Medium-and-Heavy-duty Zero-Emission Vehicles (Canada).

Following in the footsteps of China, which has electrified its entire passenger transport fleet, Europe has decided to eliminate polluting gas emissions from its fleet by 2050, according to the General Directorate of the European Commission for Mobility and Transport. A move that is already being implemented in several countries.

Some Latin American cities, such as Santiago (Chile) and Bogotá (Colombia), with serious pollution problems, have approved laws to electrify their fleet. This is according to data from BYD - a Chinese EV manufacturer. Each electrical bus avoids emitting 121 tons of CO2 annually, equivalent to planting 864 trees per vehicle.

As a result of these new market trends, some automakers have created electric vehicles and expanded their offerings globally.

After developing solutions for buses and small fleets, it was only natural that this trend would spread to trucks. The motivators are twofold: energy costs are generally much lower than diesel costs, and maintenance costs are significantly lower because electric motors are simpler and have fewer mechanical parts to endure wear-and-tear.

However, battery life remains a challenge. Vehicles can typically travel up to 300 km without recharging their batteries, limiting the technology’s application to urban operations. On the other hand, it has the most significant impact on reducing pollution from gases, poisonous particles, and noise.

Coca-Cola and Inbev, for example, are launching electrification programs for their distribution fleets. The reasons are lower fuel costs and maintenance, increased fleet availability, and reduced environmental impact.

Challenges related to battery life

Heavy vehicle batteries typically have a range of up to 300 km or 186 mi, limiting their use in urban operations. Furthermore, the battery charge takes about four hours, making it possible to refuel the vehicles while they are in operation.

New research and battery types, however, are being developed. For example, the best option for storing recycled energy by slowing down or on slopes is the concurrent use of supercapacitors. Although having a low load, they can be charged instantly and don’t heat up. On the other hand, a tram system uses supercapacitors with enough load to move the vehicle to the next stop while recharging. Supercapacitors also have a much longer service life than batteries, and they weigh less.

Ideal driver

In the case of EV operations, the influence of driver behavior is also a critical factor for success, as battery life is a vital component.

The ideal driver strives to minimize energy loss by braking as little as possible because deceleration without braking recharges the batteries. Therefore, to avoid using the brake, the driver should anticipate reducing forward traffic and plan the stops. The other focus point is acceleration; an ideal power provides the best performance for each engine. Therefore, the driver should accelerate using this ideal power to minimize energy consumption. As a result, they should avoid abrupt accelerations.

Using telemetry with electric vehicles

With the importance of good driving habits in ensuring a longer battery life of vehicles and minimizing energy consumption during operation, vehicle telemetry becomes the fleet manager’s and driver’s best ally in achieving their goals. The measurement of the most critical indicators, such as the use of the brake pedal, acceleration power, and regenerated energy, allows identifying the best drivers, the most difficult places, and areas for improvement.

In addition to driving, the battery charging process is critical. They should not discharge below 10% because there is a risk of damage, and they should not charge above 90% because it reduces battery life. It limits their use to 80% of the total load in practice. Furthermore, proper load monitoring multiplies the number of battery life cycles by more than 100.

Batteries typically cost 40% of the vehicle’s value.

Use cases

Urban buses – Some transportation companies have already begun testing small fleets in urban operations in Brazil. The length of the routes is the most difficult challenge. The size of the major Brazilian cities is enormous. As a result, the lines usually outlast the battery life, limiting the application to shorter, higher-density lines that serve the city’s core.

However, the advantages in terms of maintenance and fuel costs and reduced idleness are significant. Furthermore, the environmental benefits of lowering gas emissions and noise pollution increase political interest in adopting the technology.

On the other hand, the sector suffers greatly from reduced mobility due to the pandemic policies and other competitive models (such as uber, motorcycles, electric and manual bikes). It also includes exemptions that reduce the number of paying passengers, leaving little money to invest in new technologies.

Waste Management – the garbage collection operation is a low-speed operation. The vehicle runs with street sweepers and collects the garbage, passing through all the streets of the neighbourhoods and discarding, later, in a dump. Because of the low speed, distances are not high, and the operation is suitable for adopting electric vehicles. In addition, the strong environmental bias that municipalities seek to associate with garbage collection encourages investment in technology. There are several benefits for the waste collection company: reduction in maintenance costs, idleness, and fuel costs (the cost of electricity is 40% lower than the cost of diesel in the same operation).

Conclusion

Despite the significant evolution in recent years, we still see the timid participation of EVs in the transport of cargo and passengers. The first initiatives are linked to public concession transport, driven by environmental and political appeal. However, these operations have important financial results, with significant reductions in maintenance costs, idleness, and supply costs. It can be an excellent incentive for the private sector to adopt these vehicles on a large scale.

There are still technological challenges in developing batteries that allow greater vehicle battery life and/or reduced load time. It also includes adopting other technologies (such as supercapacitors) at a reasonable cost to generate a return on investment (today’s electric vehicle costs 50% more than a diesel vehicle).

Finally, there are infrastructure challenges in the supply network, which is currently only suitable for urban operations with a recharge in company units and the country’s energy generation matrix.

We believe that these obstacles will be quickly overcome because the entire world is following this trend, and there is much research being done on more efficient battery technologies. However, the increasingly visible effects of global warming and the pandemic, which provided a small sample of what a world with less pollution would be like during lockdowns, caused the public to be more aware of environmental sentiment, increasing political interest in developing these technologies.

Still, we see power generation as the most difficult challenge, but the increase in investments, particularly in wind power generation, suggests that this limitation should be reduced over time.

The tendency for private initiatives to adopt the technology will increase as vehicle battery life increases and vehicle costs decrease proportionally.

On the other hand, the importance of driving habits affects the operation, as well as the charging of batteries, invests in electric vehicles boosts the adoption of telemetry, as this will increase the distance and durability of batteries, which is the most significant barrier to the large-scale adoption of electric vehicles.