For fleets, going green is a high priority—but making green is an even higher one.
“There is a significant uptick in the cost [for electric vehicles]. At the end of the day, we are a for-profit business, and we need to make the bottom line work,” said Steve Saltzgiver, Group Director of Fleet Operations, Coca-Cola Refreshments, Inc., discussing his company’s partnership with Missouri-based Smith Electric Vehicles at last month’s Green Truck Summit in Indianapolis.
Coca-Cola and other large fleet operators such as Staples, FedEx, and Frito-Lay are in the process of crunching the numbers to determine if electrified vehicles make sense in their fleets—and if so, where exactly. “They are not one-size-fits-all,” Saltzgiver noted. “You want to make sure it’s in the correct application...and you need to understand the [EV] limitations.”
The correct application is “almost any truck” used in an urban environment, according to a recent study conducted by researchers at MIT’s Center for Transportation and Logistics. They found that the operational costs for electric delivery trucks used on a daily basis within cities can be 9-12% lower than with diesel-powered trucks.
Return on investment (ROI) was a hot topic at this year’s Green Truck Summit, whether experts were discussing the electrification of vehicles, retrofitting of propane autogas systems, or other technologies. And eventually—if not now—ROI must be realized without government assistance.
“The goal again is to produce biofuel without subsidy…Electric vehicles, without subsidies. We’re talking, ‘This is the best technology; don’t need any help,’” said Dr. Steven Chu, U.S. Secretary of Energy, during his keynote address that kicked off the Summit. “Whether it’s going to be 5 or 10 or 15 years from today, I don’t know, but it’s around the corner.”
According to Mark Greer, Green Fleet Market Manager for Altec Industries, it can be difficult to monetize all of the benefits that contribute to payback, such as the environmental stewardship gained by operating a green fleet. But the main “hard benefit,” he noted, is savings in fuel costs, particularly as diesel prices climb.
Reduced maintenance can be another benefit. Longer brake life was one example cited by several experts. According to Scott Carson, National Sales Director for Smith Electric Vehicles, one customer discovered that the brakes lasted five times longer on the EV compared to its conventional diesel-powered trucks, positively impacting the payback equation.
BAE Systems discovered through customer research that the “payback requirement” for heavy-duty hybrid vocational trucks is less than five years. According to Dr. Mike Mekhiche, Program Director for HybriDrive Solutions, the company’s new parallel hybrid system offers payback in about three to five years. Other experts said payback out to seven years or longer—i.e., at some point within the vehicle’s anticipated life—could be enough for fleets to green-light green technology.
But still, a green fleet is attained at a premium, and the price gap between electrified and conventional technology must shrink for widespread adoption, stakeholders agreed.
“We really need pricing to come down, but how do we get there with EVs?” asked Ken McKenney, Sustainable Fleet Program Manager for Verizon, discussing the keys for electrification expansion in fleet vehicles. “I think we need to get standardization in the battery [in terms of size] and BMS [battery management system] language protocols…If that could be standardized, it would eliminate some of the anxieties that fleet managers live with [servicing their vehicles].”
And, importantly, standardization could help to drive down costs, he added. That’s what will ultimately put more electrified vocational vehicles to work.