The High Cost of Fuel for EV Fleets

February 21, 2019

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The fuel hungry medium- and heavy-duty transportation sector—which consumes more than 20% of the country’s petroleum—is gaining increasing interest in electrifying. Fleets are looking to become greener, wanting to save money and reduce their environmental footprint— and in that order.

While there are several reasons commercial fleets might be interested in electrifying, many are quickly realizing there is no “one-size-fits-all” approach to electric vehicle deployment given the diversity of fleet operations and challenges surrounding electricity as a fuel.

Unfortunately, many important budget considerations are still largely unknown. The total cost of ownership of electric trucks is promoted to be lower than other comparable alternative fueled vehicles due to lower fuel and maintenance costs. However, electric vehicle technology is still maturing; therefore, the upfront CapEx required to invest in these vehicles is still two to three times higher than a diesel truck.

Outside of assessing the appropriate vehicles from technology providers, fleet managers looking to deploy electric trucks have a bigger task at hand— developing a charging infrastructure strategy. A successful charging infrastructure plan for EV fleets includes: evaluating charging infrastructure hardware; aligning the charging schedule with the fleet’s drive cycle and duty cycles; assessing demand charges, tariffs, and fuel costs which can vary by time of day; thinking about backup power solutions; working with the electric utility to make any necessary service upgrades to account for the increasing power demand; and much more.

The Big Unknown When Fueling EVs

The costs associated with charging a truck are vastly different and can be highly variable compared to traditional gaseous fuels. The largest unknown factor for fleets deploying EVs is understanding the full and exact cost of the energy needed to power their fleet each day.

The costs associated with charging a truck are vastly different and can be highly variable compared to traditional gaseous fuels.

Purchasing electricity as a “fuel” is often a brand-new experience, even for the most seasoned fleet managers. Furthermore, the cost of electricity can vary greatly from city to city and even from utility to utility. Demand charges can be a significant hit to monthly electric bills if not planned for accordingly. With multiple unknowns, fleets can struggle to set a charging strategy that enables them to avoid unpredictable price spikes while simultaneously keeping their vehicles charged and ready for operation when needed.

Many early adopter transit fleets deploying EVs around the nation have already experienced this uncertainty in the form of unexpectedly high utility bills. This remains one of the core challenges to fleet electrification. A well-managed charging solution can be the key to this equation, resulting in fuel cost savings to the fleet end-user.

A Unique Approach to Fleet Charging

The NGV industry pioneered and perfected stable alternative fuel costs by offering turnkey fueling infrastructure and fuel deals to deliver a domestically produced fuel that avoided the price spikes synonymous with traditional fuels. Additionally, by building an infrastructure network of convenient and strategically located NGV fueling stations, the industry was able to offer a similar fueling experience for fleet drivers who were accustomed to diesel.

As fleets look to electrify, several innovative companies are borrowing from this approach and have entered the market offering solutions to make electrification easier.

Several innovative companies have entered the market offering solutions to make electrification easier— from various hardware platforms and equipment to cloud-based network management software.

Companies working to accelerate the adoption of EV fleets are bringing to market similar solutions with turnkey infrastructure and fixed fuel pricing scenarios, enabling fleet managers to purchase electricity the same way they would purchase natural gas or diesel fuel.

These approaches will allow EV fleets to accurately budget for the energy cost of electricity and avoid surprise utility charges that could otherwise eat up any anticipated savings. By assuming financial liability to produce a fleet’s optimal charging results, these companies can not only provide fleet managers with a cost effective, straight forward, and easy-to-use way to avoid demand charges and peak billing, but a more certain way to realize the fuel cost savings of electric vehicles.

Fleets looking to learn more about the evolving EV and EVSE landscape can attend the 2019 ACT Expo, taking place in Southern California on April 23-26. These innovative companies will be on stage and on the trade show floor educating fleets about the challenges of, and opportunities with, fleet electrification. The 2019 ACT Expo will provide an expansive showcase of the technologies, fuels, policies, and organizations driving innovation and sustainability on our roadways.