The planet faces a different kind of danger, sustainability. Over the past couple of years we have seen business owners take up the challenge and commit to going green. One way in which this is happening is fleet electrification.
With the aid of renewable energy, we have been able to lower energy costs and electric bills. There are also ways to earn tax credits and rebates, and help the environment in the reduction of fossil fuels. This also helps lower the cost of electric vehicles. More importantly, the federal government is also promoting clean energy.
Recently, President Joe Biden announced the plan to electrify the governments the entire fleet of vehicles. According to a report by the General Services Administration, the US government owns about 645,000 vehicles. 225,000 vehicles belong to the Postal Service and more than 170,000 by military agencies. Out of these, only 4,475 are electric.
This announcement is a fulfilled campaign promise of President Biden. This executive order will limit the importation and purchase of foreign products.
This accomplishment will take time and is will change the landscape of the transportation industry. This announcement generated a buzz with the increase in the buying of shares amongst motor-producing companies.
Before the government’s move to replace their fleet of vehicles, parcel delivery services had already seen the need for electric vehicles. UPS, last year, spent millions of dollars in ordering 10,000 purpose-built electric vehicles from Arrival.
The production, from all indications, is bound to follow a process of assembly with low capital and produced in micro-factories generating low carbon footprint.
Why Fleet Electrification?
This alone should get you thinking if you run a business using a fleet of vehicles. Why? Electric Vehicles (EV) are becoming increasingly popular. Despite the pandemic, sales of electric vehicles accelerated beyond projections.
According to a study, a record 3.2 million electric cars were sold compared to the 2.2 million EVs sold the previous year. Experts are looking fleet electrification to reduce the toxic greenhouse gas and pollutants in the air. This has the potential to lower fuel usage and costs.
Embarking on fleet electrification can be a daunting process when you consider the immediate costs to do so. The landscape of the fleet industry is constantly changing.
Here is how to prepare for fleet electrification:
Survey Your Fleet
The first step towards preparing for fleet electrification to take a critical survey of your fleet. You should work closely with your Fleet Manager to ascertain the purpose of each vehicle. This will include a comprehensive review of their daily mileage, age, and specific tasks they carry out.
This can include where each vehicle is kept when not in use and the various maintenance done to each vehicle.
The reports can be gotten manually via the regular vehicle logs and made available by the Fleet Manager. You can make use of the telematics data to get the reports automatically.
With this data at your fingertips, you can determine which of the vehicles is a perfect fit for the electrification process.
Analyze Your Procurement Process
More often than not, the cost to purchase a vehicle is typically in the procurement budget, and the operational budget typically covers maintenance and checks. There is a discrepancy in this, particularly when it comes to reconciling cost maintenance savings with the upfront costs in procuring EVs.
You need to work closely with your budgeting and procurement team to develop a guideline that will take care of the purchase and maintenance of EVs.
Upgrade Your Electrical Structure
Another step you can take towards preparing for fleet electrification is to review and upgrade the electrical infrastructure of your establishment. You need to work with your Facility or Utility Manager to come to terms with the existing electrical service that is currently operating in your facility.
Find out if there is an upgrade that needs to be done with the installation of charging stations. You can also find out if your utility offers a special rate for the charging of EVs and if there are other services you can utilize with the rates. There may be even be energy related tax savings in regards to any commercial properties you own.
If this is something you and your business is interested in give us a call to discuss further. Our partner LeasePlan is an expert in this field and can help us help you. You will be able to make informed decisions and take advantage of opportunities to electrify and manage your fleet.
Published by Marc Freedman
Marc currently serves as our Chief Cost Evaluator, expertly advising our client management team on how to help you successfully achieve your business and financial growth goals. A respected mentor to all he consults with, he is an avid collaborator and contributor to the spend consultant community, guiding thought leaders to formulate, design, and install the best operational solutions available to their clients.