EV (electric vehicle) fleet conversion is the process of converting a fleet of gasoline or diesel-powered vehicles into electric vehicles. It’s becoming increasingly popular among fleet managers, prized for its positive impacts on sustainability and fuel efficiency.
Unsurprisingly, EV fleet conversion isn’t free – but it can yield significant financial rewards down the line, with EVs found to dramatically reduce fuel costs when compared to their gas-guzzling counterparts.
In this article, we’ll unpack how much this transition costs, some of the potential challenges it can pose, and how to go about it.
What Is EV Fleet Conversion?
EV fleet conversion – which is also known as fleet electrification – is the practice of converting older, gasoline and diesel-powered fleet vehicles into electric ones. This is normally done by phasing out traditional models that use internal combustion engines (ICE) and introducing new EVs or hybrids.
Fleet conversion has grown in prominence in recent years due to a number of factors. For example, it’s cheaper in the long run, and EVs are much more sustainable than vehicles that rely on fossil fuels.
The main driver, however, is legal compliance. Several states across the US have mandated that a proportion of fleets must be electric by a certain year. In California, all new trucks sold must be electric by 2035.
EV Fleet Cost Analysis: The Cost of Transitioning
EV fleet conversion is expensive. Recent research from Ryder System, a fleet management solutions company, finds that an all-electric fleet of light, medium, and heavy-duty vehicles is up to 67% higher in total cost to transport (TCT) than an equivalent fleet of fossil fuel-powered vehicles.
Added to this, managers can expect to shoulder the financial burden of making their facilities EV-friendly. Catering to a fleet of EVs requires significant infrastructure investment – which has a knock-on effect on the performance of your existing fleet.
However, electrification does yield substantial monthly savings. We ran a number of different scenarios through GEM’s EV Fleet Savings Calculator to see how much difference fleet transitioning would make to monthly costs. The results speak for themselves.
Fleet managers can make sizable savings by switching to electric. And with benefits starting from as little as 10% electrification (see: image 1), there’s no pressure to break the bank and start wholesale transitioning.
EV Fleet Conversion Challenges
The research paints a compelling picture, but it has so far failed to secure buy-in across the board. In fact, 35% of fleet managers cite an ‘unclear business case’ when asked why they haven’t electrified their fleets, according to research from Accenture. Below, we’ve listed a few of the challenges involved in EV fleet conversion – which may shine a light on why the industry is hesitant to embrace the change.
Navigating a complex vendor ecosystem
Sadly, it’s not as simple as swapping out one vehicle for a new one. To make the switch to EVs, fleet managers are required to overhaul the entire ecosystem that their vehicles are a part of. EVs need charging stations, a supply of clean energy, appropriate infrastructure, and trained drivers, to name a few. In an emerging landscape, it can be difficult to identify the right vendors to meet these needs.
Steep upfront costs
These changes require substantial investment, which can deter a lot of fleet managers. According to McKinsey, over 50% of them highlight infrastructure investment and vehicle costs as a ‘significant obstacle’ to adoption. Added to this, the global energy market has undergone a period of volatility in the last few years, due to lingering impacts of the COVID-19 pandemic and war in Ukraine. As a result, energy prices are fluctuating.
Fleet downtime
It’s also worth considering just how disruptive fleet conversion can be. The process can take months and, while there’s no need to swap out an entire fleet at once, this will cause significant downtime with vehicles off the road. Before committing to fleet conversion, managers will have to factor in time lost to essential maintenance – which can be hard to estimate. This becomes even more complicated when the supply chain is disrupted, which, as alluded to above, is not impossible.
How to Convert Your Fleet to Electric Vehicles
To ensure a successful conversion, fleet managers should draw up a comprehensive adoption strategy. We’ve highlighted some things to think about below.
Choose your preferred EV model
This will depend on a few factors. How big is your fleet? What is the average distance covered per trip? What cargo is your fleet transporting? Answer these questions and it’ll give you a better idea of the right EV model for you. Perhaps unsurprisingly, Tesla is the biggest manufacturer in the world by some distance.
Evaluate how many vehicles you can replace
Factoring in downtime, think about how many of your old vehicles that you want to swap out at once. This will also depend on how long it takes to line up replacements and get them ready for departure.
Deliver necessary training
You’ll need to plan and schedule training for drivers, and any other relevant personnel. As mentioned, swapping out gas or diesel vehicles for electric ones is more complicated than it sounds.
EV Fleet Charging Facilities: What You Need to Know
Keeping your vehicles charged is an essential part of managing an electric fleet. Fortunately, your facilities can be customized to meet your exact requirements. Plug-in hybrid vehicles (PHEVs), for example, can subsist on Level 1 charging equipment – going from empty to 80% in as little as five hours. At the same time, larger vehicles will require more powerful charging solutions. This is where direct current fast charging (DCFC) stations can come in handy.
EV batteries store energy as direct current (DC). The electric grid, however, provides alternating current (AC) power – which is then converted into DC inside the vehicle. DCFC stations cut out the middleman by charging EV batteries directly, so they’re more powerful and efficient.
On the road, public charging stations can be a great solution for vehicles in a bind. Most of them offer Level 2 charging – with DCFC facilities becoming more prevalent. Make use of an online mapping tool, such as the Department of Energy’s Alternative Fueling Station Locator, to identify potential spots along your routes.