How Affordable 200-mile Electric Cars Change the Fleet Equation
June 21, 2016
June 21, 2016
It wasn’t the race to put a man on the moon, but the race to an affordable electric car capable of 200 miles was interesting enough. Tesla Motors first set the terms with this range benchmark at a price under $35,000. Then General Motors stole the show with the debut of the Chevy Bolt EV at the Detroit Auto Show in 2015.
Since then, other automakers have gone on the record with plans to release moderately priced, long-range EVs. But what will it mean for fleet owners?
In the past, we discussed the mistakes made when flying blind with electric vehicle fleets. You might run into trouble with:
- Charging in the workplace or on the road
- Experiencing rapid battery drain in highway driving
- Running short on range when customers need you most
- Missing the full potential ROI
The upcoming generation of electric vehicles will have a big impact on these issues when you consider fleet operations, and could be game-changers for the right businesses. Here are ways the equation will change.
Double Time on the Road
The most obvious change for fleet operators is the ability to keep your EVs on the road for double the time. Unless you have a Tesla Model S or Model X in operation, a Chevy Bolt or Tesla Model 3 will double your cars’ effective range.
In fact, the new range quotes are more than double that of first-gen EVs including:
- BMW i3 (81 miles)
- Nissan Leaf (84-107 miles)
- Ford Focus Electric (76 miles)
- Smart Electric Drive (68 miles)
- Kia Soul EV (93 miles)
- Fiat 500e (87 miles)
Rather than having two cars in service, dispatchers could trust a single vehicle to cover most of the runs a fleet vehicle will make. (FleetCarma data shows 56% of fleet cars travel less than 40 miles per day.) Even with “real-world” factors like highway battery drain and climate control factored in, a 200-mile EV is going to offer a major boost.
Lower Entry Cost
Compared to a first-gen Nissan Leaf ($29,010), the best-selling pure electric model of all time, Model 3 will offer a 255% increase in range (to 215 miles) for a 20% price increase. Matched against the 107-mile-range Nissan Leaf ($34,200), Model 3 would offer twice the range at a markup of $800 (2.3%).
Though prices for the current EV lineup may come down by 2017, fleet owners can plan ahead for more range at the same sticker price or less. Chevy Bolt EV ($37,500) will be the first model to enter the picture at the end of 2016, and its markup over Leaf and other models is negligible when considering the range boost.
When you calculate the ROI of EVs, the higher upfront purchase price is a factor to consider. New electric models will cut down on the time it takes to pay back the plug-in premium and help you maximize your return if you manage charging and maintenance wisely.
What is the fleet owner’s biggest fear with an electric car? Usually, it is “range anxiety,” the dreaded feeling you get thinking your driver will not be able to make it to a charger (or back to the garage) before running out of juice. Working with fewer than 80 miles on a vehicle that cannot use a fast charger (e.g., Focus Electric), the concern is legitimate.
Start out with 200 miles and knowing you can add over 40 miles in 15 minutes should calm such anxiety. Every next-gen EV will come equipped with DC fast charging. Whether you have to pay for Supercharger service as an extra in the Tesla Model 3 or carry subscriptions to fast-charging services, the cost will be worth it.
New Business Opportunities
What does the future hold for gasoline cars featuring poor fuel economy? No one knows for certain, but as climate change data looks grimmer by the year, governments may be forced to take more internal combustion cars off the road. In places like China, red alerts for smog have already led to the ban of trucks and ICE cars.
Electric vehicles are usually exempt from the list of banned cars when government agencies are trying to improve air quality. If you are running a business and need to make deliveries on a day when gas engines are restricted, you may have to come up with a backup plan. Electric cars with sufficient range can deliver.
These restrictions are not isolated to Asia. Recently, Parisian officials banned cars registered before 1997 from entering the city center during weekdays. At stake in Paris was not only air quality concerns; traffic also played an important role. As fleet owners survey ways to work around such laws, long-range EVs with access to carpool lanes can be a major asset for your business.
Access to Incentives
As EVs enter the mainstream, governments are seeing them as tools to limit emissions and offer fleet owners incentives to buy and operate them. In the U.S., New York State will get its first-ever purchase incentive ($2,000) for plug-in vehicles in 2016. Tacked onto the federal tax credit of $7,500, incentives make electric models as reasonably priced as they are viable for fleet operation.
Incentives extend beyond the point of sale. HOV lane access is a fleet owner’s best friend when traffic is bad. Likewise, parking spots reserved for EV charging are mandated for new garage construction under New York’s OneNYC plan. Gas cars can’t park there, which has become a big incentive in California garages. In Connecticut’s New Haven, electric vehicles park for free on the street, representing yet another benefit.
When we discussed whether the conditions were right for adding EVs to a fleet, we got into the different factors to consider. Timing is important here. There is a cap of 200,000 plug-in EV tax credits per automaker in the U.S. If you want to take advantage of the best incentives, keep an eye on the count as Chevy Bolt and Tesla Model 3 begin to sell in volume.
The future of electric vehicles is arriving sooner than we imagined. With the right planning, fleet owners can use the next wave of EVs to improve ROI, expand your business footprint, and stay a step ahead of government regulations.
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