Peter McDonald
The fleet industry needs to embrace the post-covid world – and ensure that they are prepared for whatever comes their way
As ever, the role of the fleet manager is adapting again to a new normal. A cocktail of new challenges and opportunities is being sent their way.
On the positive, there’s now no doubt they need to electrify. Having spent years proclaiming EVs to stakeholders who didn’t see the immediate needs and benefits, fleet managers are now finding these stakeholders in the main are incredibly supportive. In fact, in many instances they’re major enablers of the transition, potentially asking “Why didn’t we do this years ago?”.
However, while this element of the job has got much easier, the procurement of vehicles has got much harder. There’s not just a shortage of EVs, ICE vehicles also have lengthened supply chains.
The normal supply of dealer stock or ordering six months ahead has changed to scarcity of any stock and 12-to-15-month lead times, or even longer for vans. Keeping the driver population happy must be a real challenge!
The other big challenge will be the cost of vehicles and energy. Many fleet managers will have been arguing the case for BEVs on a TCO model, where the cheaper energy will balance the higher leasing costs. The scarcity of supply has meant those EVs have less discount applied and are much more costly at purchase. Meanwhile, the cost of energy has also increased, making the costs of running an EV fleet much higher. There’s an inevitably that the fleet will move to EVs, but these cost changes will be causing frustration to many.
Fleets such as DPD, Centrica, SPIE and National Grid that electrified early will be held up as fleets that have learned the most and now have a competitive advantage
So, what’s the fleet manager to do?
It’s my view the proactive fleet manager is still proclaiming the case for electric. And, in fact, those fleets such as DPD, Centrica, SPIE and National Grid that electrified early will be held up as fleets that have learned the most and now have a competitive advantage. The trick for others will be how to introduce EVs in this new environment.
In merit order, I’d propose the fleet manager is then trying to achieve a number of targets.
Firstly, maximise home charging of electric vehicles wherever possible. Home charging is much cheaper than public charging and, given the grid is less utilised at night, the cost of energy will almost always be cheaper at this time. Fleets will need to motivate and incentivise drivers to have residential EV chargers and where possible use them overnight.
Secondly, identify the lowest cost home tariffs. Residential energy tariffs vary considerably in cost, both between suppliers and time of the day the vehicle is being charged. Currently the smartest tariffs are time-of-use tariffs giving cheaper energy at predictable hours. The next generation of tariffs will be type-of-use tariffs, recognising that the vehicle is essentially a battery. While sometimes the vehicle will need to maximum charge, in most instances drivers will have them parked on driveways for up to 12 hours, but the vehicle many only need 3-4 hours of charging. These new tariffs will allow cheaper electricity costs by giving the energy provider some control of when the vehicle is being charged. The interesting point for the fleet manager is that these new tariffs won’t be available on all hardware – only drivers who have installed second-generation smart chargers that can speak to the grid and that have integrated with the energy providers will be able to access the new tariffs.
The short-term will be about making sure that drivers install eligible hardware, and then motivating and incentivising drivers to switch to these new tariffs to massively reduce cost.
The great positive externality is that the lowest cost times to charge are also the lowest CO2, so promoting charging that’s aligned to grid supply will also make the fleet much more sustainable.
Thirdly, the fleet will want tools to them help them report and give insight into energy cost and CO2. With ICE vehicles the CO2 was calculated at tailpipe, the cars with the best MPG were the most sustainable. In the new world, the CO2 will be calculated by energy input, it will be more about when and where the electrons were taken.
Fleets will need the ability to take data to create benchmarking and insight. There will be substantial financial and environmental differences based on charging behaviour. The most successful fleets will be the ones that manage these inputs, setting up a platform that gives high quality and easily accessible data will be key. It’s the enabler for cost and CO2 management. Going forward at least we can say with some surety these are the two key things the Fleet manager in 2025 will be trying to deliver!
Peter McDonald is mobility director at Ohme. Prior to his current role, he spent two decades working for automotive manufacturers including Nissan, SEAT and the wider Volkswagen Group.
