Converting to electric vehicles: 7 key opportunities for fleet owners

Electric fleets create more sustainable business practices

For the world to continue moving at the current pace, sustainable change needs to be a way of our lives. One way fleet businesses can be more environmentally conscientious is by transitioning some or all of their fleets to electric vehicles. 

Before a business adopts electric vehicles into their fleet, there is a significant learning curve that comes with owning a battery-powered vehicle. To optimize your investment in electric fleets, it is important to understand what it takes to operate them and the myriad unexpected details tied to adopting EVs into your fleet.

As EV sales increase, change is coming to fleet mobility

Traditional fleet management is changing due to an increase in electric vehicle adoption. The Street’s Ian Krietzberg reported on a continued rise of EV sales in the U.S., with 2023’s numbers on track for EVs to represent 9% of all new car purchases – this is up from 5.8% in 2022 and 3.2% in 2021. Goldman Sachs Research also forecasts EV’s to make up half of all global car sales by 2035.  

For businesses and public sector organizations, integrating EVs into your fleet is now inevitable. There are significant environmental, financial, and operational benefits that come from embracing this technology. Although the adoption of electric vehicles for fleets is becoming increasingly more popular, there are still some major misconceptions out in the marketplace. For a successful EV integration, there are certain steps to follow to optimize your experience and the experience of your drivers. 

Since EV adoption sharply rose in recent years,  fleet managers, who have chosen to adopt EVs without partnering with an EV adoption expert, have been experiencing operational and technological issues that might have been avoided. No two businesses have the exact same needs when it comes to their fleet, which means there’s not a single clear-cut answer to solve everyone’s EV transition needs. It is important for customers to find a trusted fleet management partner to help them adopt electric vehicles.

Why transition to an EV fleet?

Although there are many complexities to converting traditional internal combustion engine (ICE) fleets to an electric fleet, there are significant benefits that it can bring to your business. First and foremost, electric vehicles can lower operational costs in several ways. These include:

• Reducing the total cost of ownership,
• Decreasing expenditures on fuel compared to charging, 
• Optimizing electricity usage
• And lowering vehicle maintenance costs.

The maintenance costs with electric vehicles are lower than what you’d find with traditional gas counterparts as EVs have fewer mechanical parts that are prone to failure and utilize data for preventative maintenance measures. If charging infrastructures are planned out and the business has a trusted fleet management partner, implementing EVs can improve operational efficiency. The costs of fueling an ICE vehicle as compared to the cost to operate a fleet of electric vehicles brings a drastic reduction in cost when EVs are adopted and offers significant long-term savings. According to the US Office Of Energy Efficiency and Renewable Energy, full battery electric vehicles cost of ownership is $0.061 per mile while ICE vehicles cost $0.101 per mile. This may not seem significant, but over time this can amount to significant savings: Fleet drivers can clock in anywhere from 80,000 to 110,000 miles annually, so those costs per mile can add up quickly. The report also states that maintenance costs for medium-duty and heavy-duty EV trucks come in at 40% less than that of ICE vehicles. The reduced cost in addition to optimized electricity usage can further increase your bottom line and maximize operational efficiency. 

The most substantial benefit to operating an EV fleet is the reduced carbon footprint your business transportation sector is leaving on the environment. The top source of greenhouse gas emissions, which emits 1.9 billion tons of CO2 annually, is cars, trucks, planes, trains, and boats. To sustain company growth and future success, limiting the CO2 your company emits into the atmosphere from cars and trucks might be a great place for your business to start its sustainability journey. If your business operates a fleet of vehicles, look into electrification and make a decision that is best both for your needs and for the needs of our planet.

Here are seven key opportunities to be aware of as you develop your EV adoption plan:

Opportunity #1: Implement a phased transition plan to an EV or a hybrid EV/ICE fleet

Even with all the benefits that come after implementing an EV fleet, the transition period is the most important part to get right. To maximize the benefits EVs have to offer, the correct infrastructure needs to be in place to accommodate the charging required for the car to operate. 

Transitioning smoothly from a fleet composed of ICE vehicles to an all-electric or hybrid fleet makes a great difference in a business’s overall operation. Although electric fleets offer a wide range of benefits in the long term, a smooth transition from ICE vehicles to EVs can set your business up for long-term competitive advantage. WEX recommends a phased approach before committing to all-electric. Understanding all the pieces of this process up front, as the customer, is crucial. As mentioned before, having a trusted EV fleet management partner to walk you through this process is important to ensure you comprehend what you’re getting your business into. A fleet partner will set the right expectations of the required steps outlined above to help you most efficiently transition to operating an electric fleet.

Opportunity #2: Develop a thoughtful charging plan before switching to EV

An electric fleet needs to have a frictionless and efficient charging system that meets the needs of a business. There is no universal charging infrastructure, so charging stations and locations need to be predetermined for any business operating battery-powered vehicles. Charging stations for EVs are not as simple as traditional fueling stations for gas-powered vehicles that accept a fuel card. Charging stations work most efficiently when they are used while the car sits idle, like parked overnight or while not in use for hours at a time. 

Shifting to an all-electric fleet might make sense for one business or government organization, but not for another. It is important to note that not all situations are the same and fleets can be used for varying purposes. The daily range a fleet driver travels is a big factor to consider when first looking at EVs. Depending on the distance a driver covers daily, a hybrid or ICE vehicle may be a better fit than an all-electric vehicle. If a fleet is staying within 200-300 miles per day, an EV would be a great fit for a business with those needs. Each use case is different, which is why businesses benefit from having an expert help them find the best fit. 

Although from a decarbonization perspective there is significant value gained from sustainability, this is only applicable if EV fleets are implemented correctly. EVs need to be adopted and folded into your operations thoughtfully and planfully or else harm could be done to the progress and perception of the future of EVs. For a seamless transition, businesses need to speak with their fleet partner and have transparent communication about what would best fit their needs.

Opportunity #3: Consider the necessary infrastructure needed to support an EV fleet

Depending on a business’ needs and size, fleet vehicles might either be parked at employee homes or be returned to a parking lot overnight. Businesses need to determine where the vehicle sits idle for the most amount of time to optimize operations and make the best use of the battery range of their EV fleet. Charging at home or in a depot requires substantial infrastructure that needs thorough planning ideally before electric vehicles are purchased and become part of your operations. 

When managing a fleet of EVs, the payback system for fueling is not as simple as a gas fuel card that you can simply swipe. Identifying where a vehicle sits idle will help you determine the  best way to charge your fleet and maximize operations.

Opportunity #4: Determine your ability to support EV charging

If a business determines their fleet drivers will charge vehicles at their own home, a dedicated home charger will be required. The first step is to learn if the driver owns their home or not to understand if they can install a home charger. If not, they will then have to find another solution and potentially look into depot charging. If the driver does own the home, the home itself needs to be evaluated for its ability to support a charger and the electricity it requires. These are some of the questions that need to be answered before purchasing an electric vehicle for your fleet.

Opportunity #5: Optimize your EV fleet by determining the correct charging set-up

The location where the vehicle sits idle is an important data point for the business to understand, but the biggest factor to evaluate is which charging setup makes the most sense for your fleet. A standard level 1 charger is typically a 3 pin plug and requires a minimum of 120-volt compatible plug – a common wall outlet. The level 1 charger is great for those who travel around 40 miles daily and want to replenish overnight. Yet most fleet operated vehicles will need more range than this, so a level 2 or level 3 direct current (DC) fast charging setup is recommended. This can range depending on the car and the speed of charging necessary. If your business is interested in a faster charger to give your EV more battery power to have a longer range, then a level 2 charger is recommended. This requires a 220 volt outlet which requires professional installment and may require further electrical work to ensure that the home is up to code. This would be an additional cost for your business which might be avoided if you choose to enlist an expert before you adopt EVs into your fleet. 

While level 3 chargers are the fastest, they are also the most expensive. CNBC’s Cheryl Munk reported that investing in multiple level 3 units can cost anywhere from $500,000 to $1 million. But as the EV market is growing, so is the support for more supercharger installations. Fueling stations like BP and Shell are already receiving support from big oil companies to mitigate the declining number of stations across the U.S. Increasing sales of hybrid vehicles also incentivizes the push for more EV chargers in gas stations. So as charging locations become more widespread, determining the correct EV charging set-up could become easier.

A business that needs a DC fast charging station should look into building a charging depot. If your business identifies a charging depot would best suit the needs of your operations, planning and preparation are key to your success. Building a charging ecosystem takes time and planning expertise as well as an investment in land and equipment. This can be a long process that your business needs to understand and map out before starting.

Opportunity #6: Consider how to best plan for reimbursement for your EV fleet

The reimbursement process for charging at home and when using a charging station en route can be confusing. That is why fleet partners have developed solutions to simplify this process. Companies like WEX partner with EV contractors like ChargePoint to enable easy payments at public fast chargers. An RFID card or a phone application is typically used at charging stations throughout the US to pay for fueling as opposed to magstripe fuel cards. For drivers charging at home, fleet managers will need access to the amount of energy used to allow them to reimburse employees for the electricity used for charging. How this works can be dependent on the installation process and how each business decides to reimburse their drivers. It is hard to monitor electricity usage and how much fleet vehicles charge. Even with all these complexities, an EV fleet is manageable with the right guidance and recommendations.

Opportunity #7: Find a trusted partner to help you transition

In order to successfully transition to an EV fleet, you need a knowledgeable consultant and expert to recommend the right vehicle and walk you through the entire setup process. Understanding not only the deployment and charging process, but which EV to select are important considerations. A trusted partner will help you understand which vehicle is right for you, as well as which charging setup is necessary. All of that initial set-up is directly tied to how charging reimbursements or payments are handled. This can be an incredibly difficult part of the process, since electricity bills are more complex than a simple swipe of a fuel card, so getting it right at the very beginning can make a huge difference in the success of your EV adoption. 

Although EVs have been in use since the 90’s, they are just now being used more frequently in fleet management. This means the technology and solutions fleet partners offer for these vehicles is still being developed. A trusted fleet partner is the most reliable source your business can use for guidance and recommendation when considering a transition. 

It is vital that fleet electrification is done correctly, as this has a direct impact on how well we tend to our planet and how well we plan for our children’s future. Making sustainable and green choices in our everyday lives now affects our carbon footprint and sets us up for a more livable future. You’ll get the most value from your investment into an EV fleet if you partner with a knowledgeable expert like WEX.

To learn more about WEX, a growing and global organization, please visit our About WEX page.

To learn more about WEX’s EV offerings visit our EV page.

Editorial note: This article was originally published on January 18, 2023, and has been updated for this publication.

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Resources:
ANS Corporate
McKinsey
Consumer Reports
ElectricForAll.org
Merchants Fleet
Motor Trend
Amp Up
The Street
Goldman Sachs Research
CNBC