Sustainability managers should be pushing for electric vehicles
The sustainability manager – a role of increasing importance
Around the turn of the 21st century, a new management position emerged to help corporations and municipalities evolve to the economic and real-world environmental challenges they were facing. This role was the Sustainability Manager or Chief Sustainability Officer.
Over the following years, the number of organizations with Sustainability Managers has rocketed. These organizations are looking to reduce the impact of their operations on both the environment and society, while at the same time to secure their financial viability. The Sustainability Manager’s role is to monitor their operational impacts, improve performance, and communicate the results of these efforts with internal and external stakeholders.
The Sustainability Manager will be tasked with building a business case for making changes that improve the company’s bottom line, while also protecting or enhancing the company’s reputation. From a fleet management perspective, this means that they will be seeking to reduce fleet operating costs, energy consumption, and emissions of GHGs and air contaminating particles.
For municipalities and businesses with large fleets of vehicles, the fleet can represent the second largest cost center after personnel. In these organizations, it will invariably account for their greatest environmental impact, from its large carbon footprint to creating emissions of greenhouse gases and airborne particles, and other potentially contaminating pollutants such as diesel, engine oils, and oil-contaminated waste materials. As such, it is a vital area for the Sustainability Manager to focus their attention on.
Sustainability Managers, having identified the areas where improvements can be made, must then look for innovative solutions to help them meet their targets. Within fleet management, many are looking to electric vehicles as a natural step to take to reduce their environmental and social impacts, while improving their bottom line.
The push for electric vehicles
Despite some remaining concerns over battery range and longevity, and the slow proliferation of nationwide, publicly available charging infrastructure, the past few years have still witnessed a strong uptake for electric vehicles among both private and public organizations.
And future forecasts are even more impressive. Swiss bank UBS predicts that by 2025, 14 percent of global car sales will be for electric vehicles (EVs), representing a 1,300 percent increase from 2017 when they accounted for only 1 percent of total sales. Meanwhile, Bloomberg’s Electric Vehicle Outlook 2018 report predicts that sales of EVs will increase from 1.1 million worldwide in 2017, to 11 million in 2025. By 2030, they calculate that EVs will become cheaper to produce than internal combustion engine (ICE) cars, resulting in a surge in sales of up to 30 million.
A number of factors are driving this increased rate of uptake. Firstly, the lithium-ion batteries used for EVs are constantly getting cheaper. The cost per kilowatt-hour for a standard EV battery has reduced from $1,000 in 2010 to under $150 now. With these falling costs, some industry figures predict that 2018 will see the total cost of ownership of an EV (including the costs of maintenance and charging) fall below that for conventional cars in Europe.
Secondly, and importantly for those with range anxiety, these batteries are also getting more efficient. The distance you can travel on a single charge is steadily increasing and several automobile manufacturers are creating models that can be driven for over 200 miles before needing charging.
By the end of 2017, the governments of Britain, France, Norway, and India had set deadlines to end the sale of gas or diesel-powered cars, in favor of zero or low emission vehicles such as hybrids, plug-in electrics or hydrogen-powered vehicles. Meanwhile, 10 other countries have set official targets for the sale of electric vehicles. One of these countries is China, which buys more cars than any other country and more than double the number of electric vehicles compared to the US.
A senior analyst Navigant Research, noted that many corporate fleets are putting plans in place to switch to EVs by 2030, and predicted that the effect will snowball such that by 2020, most fleets that can, will have committed to it.
How switching to EVs will benefit your business
Switching to EVs represents a true win-win-win from a sustainability perspective, helping to improve your organization’s bottom line while reducing its environmental and social impact. Breaking these benefits down, converting your fleet to EVs will result in the following:
Reduced fuel usage
The current generation of EVs boast a significantly lower energy cost per mile than their ICE equivalents, helping to make a considerable dent in your fleet’s annual fuel usage.
Research from the Idaho National Laboratory calculates that when electricity costs 12 cents per kWh, an EV with an energy efficiency of 3 miles per kWh would cost about 3 cents per mile. In comparison, a typical gas-powered car with an energy efficiency of 22 miles per gallon costs about 13 cents per mile, based on pump prices of $3 per gallon.
The US Department of Energy’s data shows that the average annual vehicle miles for cars are just over 11,200 miles per year. Based on these data, an EV will cost $448 to run, compared to $1,456 for a gas-powered car; an annual saving of $1,008 per vehicle in your fleet.
The cost of charging can fall further still if your fleet takes advantage of a smart charging solution to increase the number of hours charged during cheaper, ‘valley’ periods and reduce charging during peak hours.
Lower maintenance costs
With a simple electric motor driving it forward, rather than a combustion engine that contains a series of ‘controlled explosions’, the wear and tear on an electric vehicle is significantly less than for an equivalent ICE vehicle. This reduces your fleet’s maintenance costs considerably.
In addition, electric vehicles benefit from having no oil (or oil filters), spark plugs, fan belts or head gaskets to replace at regular service intervals. And with regenerative braking, the cost of replacing brake pads and maintaining braking systems reduces by roughly 50 percent compared to for ICE vehicles.
And reduced maintenance requirements don’t just bring down the actual cost of repairs, but also the incurred cost of having that vehicle off the road and providing a replacement vehicle to cover for it.
Improved brand image
Transitioning your fleet to electric can have benefits that extend far beyond the operating budget. A study by Harvard Business Review shows that sustainability is an increasingly important factor in both attracting and retaining talent. The majority of these employees want to see that the organization’s operations are sustainable, so having a visible fleet of electric vehicles can be a powerful marketing tool for employee recruitment and engagement.
Purchasing EVs shows the company’s intent to create a culture of sustainability, which can then trickle down throughout the layers of the organization with the help of coherent communication, training and staff engagement.
Finally, the use of EVs within the fleet (especially when those vehicles are branded in the company colors and are clearly identified as electric) is a powerful tool for improving the overall brand image with external stakeholders from potential customers, to influencers, to investors.
Reduced environmental pollution
As their engines don’t combust fossil fuels, electric vehicles create zero greenhouse gas or airborne particle emissions from the tailgate. For organizations with operations in towns and cities, this means that your EV fleet will contribute towards improving urban air quality standards, improving the public health of its citizens.
Although the majority of the fuel that powers the US grid is currently fossil fuel derived, the lifetime carbon footprint of an electric vehicle is still significantly lower than an equivalent ICE vehicle. A 2017 study found that even if an EV received almost all of its electricity from coal-fired power stations, it would still produce 25% fewer lifetime emissions than its ICE counterpart (including its manufacture, battery and all of its energy consumption).
As the energy mix of our grids shift towards renewable sources, then this will have an even greater impact. For example, in Sweden, Europe’s cleanest electricity grid, the lifetime emissions savings are as much as 85%.
It’s predicted that by 2050, the US could be sourcing as much as 70 percent of its power from wind and solar, with hydropower and nuclear energy making up most of the balance. In short, as grid emissions fall, EV emissions will drop with them.
How your company can make the switch
Once you have envisaged the environmental, financial, and reputational benefits of switching your fleet to electric, then the next step is to make a strong business case to convince the financial decision makers.
In order to do this, you will need access to the data that will build this case for you. FleetCarma’s Electric Vehicle Suitability Assessment (EVSA) collects high quality vehicle-side data to create a report that lets you forecast the effects of your possible procurement decisions, supporting budgetary decisions by accurately forecasting ROI and calculating the overall cost of ownership per vehicle.
Not only will it build the financial case for you, it will also forecast the reduction of GHGs based on a variety of fleet compositions, so that you can quantify the environmental impact of transitioning.
And finally, Operations and Fleet Managers will appreciate the EVSA’s right sizing assessment of replacement vehicles that ensures an exact fit for the unique duty cycles and activities of each vehicle.
Sustainability Managers will find the EVSA to be an invaluable tool to secure support from all members of the management team for their plans to shift to electric, ensuring a smooth and successful transition.