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At Leke Services, we partner closely with the leaders at the forefront of the mobility energy transition. We’ll be sharing best practices from around the industry and more in our curated roundups. Sign up for our deeper dives and check out our Perspectives here
Regardless of the uncertainty regarding policy mandates, managers still need to consider transitioning to zero-emission vehicles primarily due to the promise of lower costs of ownership. This critical transition presents both challenges and opportunities for fleet owners that justifies a comprehensive examination. This week, we will discuss the key factors stakeholders should consider when pursuing the electrification of their fleets.
Considering that there is no future with less EVs on the road than there are today, developing strategies for effectively integrating this technology into your business operations should start immediately to allow as much time to make the right moves as possible, while avoiding mistakes.
- The outlook for EVs in the US
- Managing initial costs
- Planning the transition
Currently, there are approximately 3 million electric vehicles (EVs) on U.S. roads - a 3% share. Even with revised studies, forecasts still project a growth to nearly 30% of vehicles on the road by 2030. Two primary forces are driving the industry towards electrification:
- Policy and Emissions Requirements: Governments & global companies like IKEA and Amazon are implementing reduction mandates, and this is certain to continue even with variations by location.
- Cost savings: electric vehicles hold the promise of significant cost savings due to less moving parts and adaptable technology that have are starting to prove much more versatile than conventional combustion engines.
While upfront capital expenses for EVs are higher, the total cost of ownership (TCO) is expected to be lower in the long run. Factors that drive this typically include lower fuel costs and reduced maintenance that adds up to a potential long-term savings of $6,000 to $10,000 over the life of most EVs.
Fleet owners often encounter challenges in financing the upfront costs for vehicles and infrastructure investments. However, some factors can help mitigate these initial costs:
- Incentives (tax credits, rebates, grants)
- Innovative business models and ‘-as-a-service’ offerings for vehicles, charging, and energy that turn capital expenses into operating expenses.
Fleet managers and owners must decide whether to proactively lead this transition or maintain the status quo until external pressures mandate the change. While current operations may feel comfortable, failing to adapt risks leaving companies unprepared for the inevitable industry-wide shift.
The transition to zero-emission fleets does not necessarily require significant upfront costs even though there must be operational changes. A phased approach is the most effective method to progressively adapt business operations and personnel to new technologies while still providing long-term benefits in terms of cost savings and environmental impact. As a leader, your role is to navigate this transition strategically, balancing short-term costs with long-term goals and environmental responsibilities.
We invite you to get your free electrification plan for your fleet here— our team will customize it just for you, and it only takes a few seconds to complete the diagnostic.
