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What drives a successful fleet electrification strategy?

Several commercial vans parked in a row

Most fleet managers expect to adopt electric models during the next decade and are aware of an industrywide push toward electrification, according to a 2021 RMI study. Image via Shutterstock/ysuel

Fleet electrification for vehicles has become a focus for large players in the United States, such as UPS, which placed an order for 10,000 electric delivery vehicles in 2021, and Amazon, which partnered with electric vehicle startup Rivian, to electrify its transportation. President Joe Biden signed an executive order in late 2021 that directed the federal government to acquire 100 percent zero-emission vehicles by 2035. The Rocky Mountain Institute (RMI) interviewed 91 fleet managers operating large fleets in 2021 as part of a research effort to identify how fleet managers were responding to electrification: 38 percent of them are electrifying vehicles, and 43 percent have electrification goals.

During the "Fleet Manager Approved: Driving Internal Buy-in" panel at VERGE Electrify — a virtual event hosted by GreenBiz last week — two industry experts discussed their views on organizational electrification strategy. The RMI study found that most fleet managers expected to adopt electric models over the next decade and were aware of an industrywide push toward electrification. But, as Meghan Weinman, managing director of transportation electrification at Edison Energy, explained at VERGE Electrify, there is a bottleneck regarding clear communication of the electrification strategy internally. "It’s in part trying to get that buy-in and education with those that are going to be potentially using the vehicles but really providing solutions that really meet a fleet’s needs and meet an organization’s needs," she said.

This sentiment was echoed by Ken Jack, vice president of fleet operations at Verizon. He emphasized that no one size fits all when it comes to an electrification strategy and described Verizon’s plan of action as very involved. "We painted a picture of what the future state looked like in terms of an operation that had gone fully EV, and then started working our way backward: Who are all the people that ended up being touched along the way?" Jack expanded.

For Verizon, the electrification roadmap primarily involved the energy portfolio management team, typically in charge of procuring gas; the operations team, which has to deal with issues of reliability; maintenance teams and the drivers themselves. The critical point for any strategy varies from fleet to fleet. "Some fleets are going to be focused on the cost savings, some are going to be looking at reducing exposure to volatility in the fuel price market, and some are going to be thinking about what it means from a customer engagement standpoint," Jack noted. 

[Continue the dialogue about accelerating electric, clean and equitable transportation and logistics that reduce emissions at the VERGE 22 Transport Program, taking place in San Jose, CA, Oct. 25-27.]

Although each approach will be unique to each fleet, there is still a need to be consistent in messaging across the different parts of a company, which often requires a more hands-on approach, Weinman added. "One of the things that we find is really useful and is something small but can be really impactful is doing a ride-and-drive with your stakeholders," she said, “giving folks vehicles for a day or two once we get the vehicles … and they realize, ‘Oh, OK, this isn’t so different than I thought it was.’" 

Although there is not typically one single decision-maker in a company’s fleet electrification strategy, Jack emphasized that for longer-term planning, having buy-in at the leadership level is important. "Finance and senior leadership should be bought into the idea that they’re doing something for their company's brand equity that is a longer-term investment," he said. Similarly, Weinman found great value in having an "executive champion," or someone at the executive level who has completely bought in to the electrification strategy. 

When deciding what the deployment strategy actually looks like, Jack underscored the importance of understanding how the company is using its equipment on a day-to-day basis, and how electrification will affect preexisting systems. RMI found similar results in its study, where the organization compared planned electrification with incremental electrification, finding that costs were significantly higher when electrifying slowly and less strategically. 

"When you have an integrated approach, you can engage your utility early," Weinman reiterated during the panel discussion. "In doing so, too, rather than just having a short-term financial plan, if you have a more long-term projection, you can start to think about: How do I take advantage of incentive funding? How do I take advantage of utility programs?"

Weinman is especially cautious of shortsighted planning: When investing only into the pilot, longer-term charging infrastructure is not prioritized, and therefore, a longer-term investment is jeopardized, she said. 

For both Weinman and Jack, the crux of internal fleet electrification strategy is not necessarily the education to understand why it is crucial, but having a thorough plan for reaching electrification targets that takes into consideration all components of the business that are affected. Tools to create roadmaps are becoming increasingly more popular, such as Argonne National Laboratory’s AFLEET software. In 2020, the transportation sector accounted for 27 percent of U.S. greenhouse gas emissions, with 57 percent from light-duty vehicles and 26 percent from medium and heavy-duty trucks. Electrifying the sector strategically will allow for massive reductions in climate impact and costs for the fleets themselves, so long as the process is completed with an integrated approach rather than an incremental one. 

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