Chesky_W/Getty Images
Getty Images 656090298
Getty Images 656090298
Getty Images 656090298
Getty Images 656090298
Getty Images 656090298

Conversations About Fleet Electrification Bear Repeating

Oct. 24, 2022
Several speakers who represented fleet owners and vehicle manufacturers had a clear message for utilities when it comes to fleet electrification.

In early October, we held our first T&D World Conference and Exhibition in Charlotte, North Carolina, where T&D World’s editorial staff spoke to and heard from many subject matter experts. In the next few months, we’ll share some of what we learned from these experts in upcoming articles. Transportation electrification, especially commercial fleet electrification, was among the main topics discussed throughout the event and even though I wrote about it in March, I think it’s worth sharing additional, more recent information.

Several speakers who represented fleet owners and vehicle manufacturers had a clear message for utilities when it comes to fleet electrification: Fleet owners are electrifying, many fleet vehicle OEMs have staked their future on electrification, and utilities must be ready now…not three, or five, or more years down the road. Those outside the utility industry don’t understand why a utility needs months to answer questions about charging infrastructure availability, rate structure data, and other information they need to help them determine when and what to electrify. They are even more perplexed when their utility tells them it could take years to build the infrastructure necessary to support their plans to move to electric vehicles. Some fleet owners have ordered vehicles and expect to charge them where and when required as soon as those vehicles are put into service. Several companies, including Amazon, Frito Lay, DHL, Anheuser-Busch and others have already integrated electric vehicles into their fleets and most plan to add more.

For most fleet owners, the initial incentive to switch to electric vehicles was linked to decarbonization and sustainability commitments. Typically, one of the main reasons fleet owners make the switch to electric vehicles is because their customers and stakeholders expect them to decarbonize. More recently, however, fleet owners are discovering that when compared to new diesel trucks, total cost of ownership (TCO) is lower for electric trucks in certain vehicle classes, use cases, and markets. I even heard some experts say that electric trucks offer improved driver experience that can lead to increased driver retention.

Of course, electric vehicles don’t make sense in all use cases and adoption varies from state-to-state and region-to-region. The commercial and industrial (C&I) sector is, however, in most areas moving faster than solitary passenger car adoption and usually requires much larger infrastructure investment from utilities.

“There are several levels of size, route and purpose, that so far show electrification makes a lot of sense for fixed and short-haul, medium-duty carriers, but not yet for the cross-country haulers,” said Dave Schaller, the industry engagement director at North American Council for Freight Efficiency (NAFCE), an organization supported by the trucking industry. Schaller spoke about the future of fleet electrification during a pre-conference seminar at the T&D World event. He said NAFCE was founded to help solve issues of diesel efficiency, but electrification is taking hold and the organization is now studying and reporting on fleet electrification opportunities and challenges.

Mike Rowand, another industry expert in the transition to electricity transportation, echoed Schaller. “Fleet electrification is real, it’s happening and it’s big,” he said. Rowand emphasized its potential to impact electric utilities by offering a few statistics. The total spend for electricity in the U.S. is roughly $1 billion/day. It took about 120 years to get to this point, he explained. Likewise, the total spend on gasoline is the same; around $1 billion/day. It took about 100 years to reach that level. In the next 25 years, if half of all gas spend moves to electricity, that’s a 50 percent increase in electricity use just for transportation, not factoring in additional growth from all other users and sectors.

“This is giant scale and magnitude,” he said. Unlike anything the industry has seen before.

Charlie Allcock, who worked nearly 30 years in business and economic development at Portland General Electric and has been an independent advisor and consultant on smart cities and transportation electrification for the last five years, also spoke. “Commercial EVs are crossing a tipping point,” Allcock said. “Infrastructure is emerging as a key issue and utilities’ ability to add grid capacity by the date (needed) is unclear.”

He also added that there is no chicken and egg question here — charging must come before vehicles. He warned that the typical utility response on timing of new capacity cannot support the expected wave of new demand. He suggested that utilities begin building before the infrastructure is required. “Building ahead of need is a challenge with regulators, but it needs to be done,” Allcock said.

The experts believe the need is urgent, but Rick Mihelic, also of NACFE, presented another important perspective. There are about 8.8 million single unit (medium duty) trucks and 2.8 million truck/tractors (heavy duty) in service in North America today. The annual production capacity in North America is currently 350,000 medium duty and 320,000 heavy duty trucks. This means that unless production increases dramatically, which isn’t likely, it will take nearly 20 years to electrify the entire North American fleet (minus those trucks that aren’t a fit for electrification), which is good news for utilities.

Most people who attended the seminar understood that the electric power industry, especially the T&D sector, is experiencing phenomenal change and is under pressure from not only transportation electrification, but also rising fuel costs, the addition intermittent renewable energy sources and storage, aging infrastructure, supply chain issues and much more. One speaker in another session described the level of investment needed in U.S. transmission infrastructure as “breathtaking.”

Most people in the room, however, also agreed with NACFE’s Schaller, who noted that fleet owners and utilities are not communicating the way they should be. “The conversation is very challenging,” Schaller said.

The communication between all parties in the e-mobility ecosystem must start somewhere, which is why this year’s T&D World conference included this seminar.

Voice your opinion!

To join the conversation, and become an exclusive member of T&D World, create an account today!