Fleet Electrification: Why Does it Matter?

When fuel costs are climbing and emissions regulations are getting tighter, your business likely has ESG targets to hit this quarter. Fleet electrification is no longer just an idea, but a strategic move for various businesses alike.

Having an electric vehicle fleet can reduce maintenance and fuel costs, lower your company’s carbon emissions, and instill more efficient operations for your business as a whole. The key to having a seamless electrification transition is capitalizing on the benefits provided.

A data-driven fleet electrification strategy can help avoid all of that by ensuring a smoother transition and stronger ROI, with full compliance with changing regulations.

What is Fleet Electrification?

Fleet Electrification is the process of replacing internal combustion engine vehicles with electric or hybrid alternatives. However, it’s not only about swapping the vehicles themselves; fleet electrification also includes:

• EV charging infrastructure
• Driver training and adoption
• Cost modeling and budgeting
• Alignment with your sustainability goals

Electrification Approaches: What’s Right for You?

It can be difficult to discern what process is right for you and your business, or if leaping into electrification is too costly. Southgate Lease Services can help you come up with a strategy for fleet electrification:

• Full electrification: Convert your entire fleet to EVs. It’s the most environmentally impactful move—and offers strong long-term cost benefits.
• Hybrid fleet solutions: This process uses a mix of EVs and plug-in hybrids. It’s ideal for flexibility, especially in areas with limited EV infrastructure.
• Phased electrification: This process starts with specific routes, regions, or vehicle types, which lets you learn, adapt, and scale over time.

It’s important to consider checking your TCO before starting this process. You can even explore state and federal EV incentives to offset upfront costs.

Southgate Lease Services and Fleet Electrification

At Southgate Lease Services, we make fleet electrification simple, strategic, and financially smart. Our EV fleet leasing solutions and fleet electrification consulting help you:

• Analyze usage and cost data
• Plan infrastructure rollouts
• Model ROI and carbon savings
• Customize your electrification roadmap

Southgate Lease Services keeps your operations running while you modernize your fleet.

Successful Fleet Electrification Strategy Elements

When you are setting out to start your fleet electrification process, it’s important to note that it isn’t just about buying up a bunch of electric vehicles. Building a sustainable, data-driven map for your process is imperative when transitioning to EVs.

Step one: Conduct a fleet feasibility study

Start your transition with a comprehensive fleet assessment, and evaluate the current vehicles’ usage patterns, fuel costs, and total cost of ownership. From there, you can discern which vehicles are best suited for fleet electrification.

Southgate’s fleet analysis resources can provide data insights.

Step two: Define clear goals

Set clear intentions, such as reducing fuel costs, cutting carbon emissions, and meeting regulations like the ones that are outlined by the U.S. EPA.

Step three: Get stakeholders across departments engaged

Having solid stakeholder engagement helps avoid implementation delays and supports alignment across the company by ensuring buy-ins. Transitioning in coordination with the stakeholders also allows for a smoother integration of EVs with existing fleet services like Southgate’s flexible leasing solutions.

Building upon these pillars will curate a foolproof strategy plan. Data analysis with clear objectives lays the groundwork for your electrification transition, and doing so cross-functionally will help see the plan through to fruition.

The First Step: Fleet Assessment

For a fleet assessment strategy to be successful, you must first conduct a comprehensive assessment of your current fleetKnowing how each vehicle operates and how efficient it is with costs is crucial when deciding to transition to EVs.

Analyzing Your Fleet for Electrification

The data you will need:

• Vehicle type and age
• Fuel consumption and maintenance costs
• Daily mileage, idling time, and duty cycles
• Replacement timelines and lease terms

Using tools like Southgate’s online fleet resources can help you gather and visualize this information efficiently.

Identify the Best Candidates for Electrification

Not all vehicles are able to transition to EVs right away. When looking into electrification, focus on:

• Shorter driving routes
• Areas with charging stations
• Vehicles that are close to end-of-life

Prioritize Partial vs. Full Transition

Based on the data results, decide if a partial electrification approach is better than a full transition. Many fleets begin with hybrid models to test the waters and see the impact on risk and cost overall for electrification.

Southgate can support a customized EV rollout plan tailored to your fleet’s needs. Thorough assessment is essential. It ensures your fleet transition is based on concrete data, not just assumptions.

Step 2: Infrastructure & Charging Readiness

Fleets of EVs will need to be charged regularly. It’s up to the business to establish the infrastructure to ensure that the fleet is ready and that the infrastructure can handle it.

How many charging stations does your fleet need?

Start by analyzing your fleet. To decide how many charging stations are needed, you first need to understand your fleet. This includes the number of cars and trucks, types, ages, and mileages of each of your fleet vehicles.

Next, look at the schedules and routes of your fleet, and determine the available charging infrastructure on their typical routes. With that data, you can run example scenarios to explore potential charging strategies. Bringing in experts to assist you with these steps can be essential.

Charging Infrastructure Checklist:

1. Fleet profile
   1. Number of vehicles
   2. Make and model
   3. Age, mileage, and condition
   4. Typical uses and loads
2. Operations data
   1. Mileage—Daily, Monthly, Yearly
   2. Routes
   3. Load requirements
   4. Physical space constraints
   5. Turnaround charging requirements
3. Additional constraints and energy usage
   1. Utility capacity
   2. Route charging infrastructure
   3. Permitting requirements

Collect as much information about your fleet as possible to decide what kind of chargers should be utilized.

Level 2 (L2) Chargers:

This type has a charging speed of about 25 miles of range per charging hour. Typically, these are used for overnight charging.

DC Fast Chargers (DCFC):

This type directly charges the battery for a charge of up to 80% in as little as 20 minutes. These are best for high-utilization fleets with rapid turnaround times. DCFCs also cost more than the L2 chargers and require more from utilities.

Fleet Management services help you sort out the details of energy management, including charging load management, schedules, and tracking of data such as energy usage and emissions reductions.

Step 3: Vehicle Selection & Procurement

Whether buying or leasing your fleet, you will need to get your drivers vehicles that work with their roles. Develop your selection criteria with the input of the team members who utilize the current cars and trucks. A fleet management provider can assist you in choosing the best method of adoption as well as finding suitable EV options.

Selection criteria to consider:

• Budget
• Usage
• Typical routes
• Load requirements
• Parking or lot space constraints
• Compatibility with the current charging infrastructure

Discuss your criteria with your fleet management provider to develop a procurement strategy that works best for your business. A phased rollout or maintaining a hybrid fleet of both standard and electric vehicles can be great options. These approaches are especially beneficial for organizations with faster turnaround needs or longer, more remote routes.

The best vehicles for you will largely depend on how they are used and when they will need to be charged. For example, a standard vehicle has a range of about 300 miles on a single tank of fuel, while the average EV has a range of about 280 miles on a single charge, which can take 8 to 13 hours depending on the vehicle. For long-haul drives, an EV may not be the best choice, especially for more rural or heavily loaded drives. But, for local driving like a commuter route, they may be a sustainable option.

Step 4: Financial Planning & Incentives

Purchasing any new vehicle is a huge expense for your business. The upfront costs versus long-term savings are important for the bottom line of your business. On average, EVs have begun to be on par, if not better, for long-term cost effectiveness. A light-duty EV’s operation and maintenance (O&M) costs an average of $0.06 per mile, compared to a standard vehicle’s $0.10 per mile. Remember to include fuel prices, routine maintenance, and selling price in your decisions. You can calculate the exact costs of your fleet with a Vehicle Cost Calculator.

There are plenty of incentives for switching to an electric fleet or even taking on a hybrid model. Tax credits, grants, and other federal and state benefits may apply to your EV purchase. Search for state-specific incentives on the U.S. Department of Energy website. This can offset some of the initial cost to help with savings.

A fleet management provider can help assess your eligibility for these incentives and determine other cost-saving measures, including financing options.

Step 5: Implementation Roadmap

Your business’s implementation plan should be unique to the budget, use, and goals of your fleet. However, there are some general steps to aim for a successful rollout.

Planning is key

Your business likely completed a large part of this phase while deciding to transition your fleet to electric vehicles. Keep proper documentation as you move forward with planning and executing your fleet transition. Information is vital to successful planning and rollout.

Key steps for planning your rollout:

• Determine budget
• Develop selection criteria
• Understand charging infrastructure needs
• Determine long-term goals for fleet transitions
• Consider the acceptable amount of business disruption
• Establish a timeline for vehicle replacement

Execution – Phased vs. Full-scale Rollout

A phased rollout of EVs can prevent many of the challenges that businesses face when considering fleet changes. It is more cost-effective, less disruptive, and allows for adjustments as they are needed during the process. Determining the best timeline relies on knowing vehicle usage details as well as the typical replacement schedule for your standard vehicles. As you move through your rollout phase, monitoring will be important for better vehicle procurements in the future and the success of your fleet electrification.

Key steps for a phased rollout:

• Phased rollout based on usage and replacement cycle
• Set up monitoring to track individual vehicles:
  • Energy usage and costs
  • Charging patterns
  • Utilization
  • Maintenance costs
• Train staff on EV-specific maintenance and care
• Monitor charging stations

Feedback is necessary

Be open to feedback from your drivers as you move through the fleet electrification process. They will be your key resource to understanding any challenges or limitations that present themselves. You will already be documenting every step of this process, so be sure to include scheduled assessments and conversations with your drivers.

Step 6: Operational Integration & Fleet Management

Key steps for continued rollouts:

• Provide avenues for driver feedback
• Schedule assessments for vehicles against goals
• Document all successes and challenges

Having support throughout fleet electrification can make all the difference. Southgate Lease Services offers 24/7/365 support, ensuring that your transition is as smooth as possible.

If you’re feeling overwhelmed by the thought of integrating EVs into your existing fleet, you’re not alone. Consider these three points to make the process easier:

• Merging: Review current vehicle data to determine which routes would most benefit from EVs and plan to gradually introduce these vehicles. Think about distance, location, charging needs, and sustainability.
• Training: Staff and drivers should be trained in EVs for safety, including emergency response procedures, how to charge and operate the vehicle, and mechanics on high-voltage systems.
• Planning: Prepare for EV maintenance, such as battery monitoring, software updates, and routine checks. Southgate’s fleet tracking tools record vehicle health and flag issues before they become critical, allowing you to plan ahead and stay on the road.

Step 7: Monitoring, Optimization, and Continuous Improvement

After integration, the job’s not finished yet! Monitoring strategies allow you to see how the transition is going and improve long-term performance.

Setting measurable targets and key performance indicators (KPIs) allows you to track cost savings, emissions, and fleet utilization. These metrics provide a comprehensive view of maintenance and fuel expenses, energy use, compliance with environmental regulations, productivity, and ideal fleet size.

Southgate’s cost control monitoring and fleet management resources provide operational data, making it easy to assess your EV fleet’s performance and refine your strategy. Stay in the know and quickly respond to any changes with Southgate’s telematics.

Common Challenges and How to Overcome Them

• Infrastructure bottlenecks: Plan for possible delays and evaluate your power needs and fleet operations. Telematics on mileage, routes, and vehicle performance can schedule efficient routes along roads with EV charging stations. According to Energy on Wisconsin, Wisconsin was awarded $78 million for 53 EV charging stations along major roadways.
• Changes in management: Revamp your management strategies to oversee an electric fleet through goal setting, clear communication, and training. Identifying goals like increased efficiency or lower costs allows proper staff training and communication.
• Supply chain delays: Supply chain delays in inventory, technology, and transportation can increase costs and impact customers. Southgate’s smart fleet management reports provide insights on fleet inventory, vehicle replacement suggestions, maintenance history, operating costs, and driver mileage to avoid delays through better management and scheduling.

FAQs: Electrification Strategy for Fleets

Change often comes with concerns, but that’s not an excuse to stay stuck in the past. Here are a few common misconceptions:

EVs are too costly. While EVs require an initial investment, they help save on operational expenses through lower fuel costs, reduced maintenance, and government incentives.

EV batteries are unreliable. Motoring Research reports that in 8,300 long-term EVs studied, average battery health was 93%, with most above 80%.

There are no places to charge EVs. According to Argonne National Laboratory, the U.S. has over 210,000 public EV chargers at more than 76,000 stations, with more being built regularly.

Electric vehicles take too long to charge. Charging time depends on the vehicle model, with some taking as little as minutes to charge—faster than charging a phone!

Tailoring the Best Electrification Strategy for Your Fleet

With EV adoption on the rise, it’s crucial to integrate a tailored electrification strategy. There’s no one-size-fits-all; your approach should match your fleet’s specific needs.

At Southgate Lease Services, online tools provide analytics and feedback for a customized EV integration approach. Flexible lease and finance solutions make the transition easier.

Step into the future, and contact Southgate to begin planning today!