Opinion: Tobias Kern of fleetcompetence Group on fleet electrification
Tobias Kern, managing partner, fleetcompetence Group, says it’s time to be positive about batteries.
Fleet electrification is progressing, but it is clear that – with the exception of Norway – it is a long way from becoming mainstream. Some might argue whether it will actually ever be relevant to fleets; however, on the other side of the coin, they might be surprised to hear the range of possibilities, which are already achievable.
Considering the broad bandwidth of opinions on electrification, one key question remains: beyond the evaluation of pure rational facts, is electrification also a matter of the right attitude? People typically fall into one of two categories: EV optimists and EV pessimists. Based on the attitude, different views on typical EV challenges can be derived from a number of angles:
For pessimists, range limitation is still perceived as one of the killers for any electrification programme, which prevents drivers from using full electric vehicles. However, it is surprising how many drivers cope with EV ranges when taking the time to analyse the usage patterns in more detail. And if full electric vehicles don’t matching all the range requirements, PHEV technology is still an alternative, although thorough regulations are needed to keep the use of the combustion engine as low as possible.
For special requirements, such as ‘towing trailers with LCVs’ or specific equipment options, the pessimist will often find some road-blocks to electrification. The optimist might assess the operational requirements in detail first, in order to understand the ‘must-have’ compared to ‘nice-to-have’ features, proving at least a certain share of the fleet can be electrified. The current vehicle range covers many needs – and more models continue to be announced.
Limited infrastructure for charging
From a purely pessimistic view, drivers will run out of electricity and get stranded because of the lack of charging points right at the moment of need. Accepting those limitations in the short-term and starting to actively plan trips and charging stops means changing one’s habits. However, this should not be an unreasonable hurdle. Furthermore, drivers may find more charging stations than expected – did you ever call your client or supplier to find out if visitor parking is equipped with a charging station?
Interestingly, the pessimists would probably be surprised about the outcome when doing a thorough TCO analysis by also considering the impact on taxation, governmental subsidies and charging infrastructure. Over the last 12 months, the tremendous shift of cost levers such as residual values, tax impact through WLTP, increasing fuel prices and enhanced vehicle rebate offers support the development to come close to, or even exceed, the break-even point. Obviously, the levers impact the TCO differently depending on the country. So, bad news for pessimists: the trend in Europe for a beneficial business case is positive.
Level of complexity
It is a fact that the development and introduction of an electrification program is a complex topic, where pessimists might see an over-kill for the fleet department. However, it is also a fact that electrification is only one subject of change next to numerous others such as WLTP, IFRS16, mobility, influencing fleet strategies. Looking positively: one will surely not get bored over the next few years! Better to get used to change by embracing the advantages resulting from it?
As an underlying aspect to all the areas above, people tend to be hesitant or even resistant to change their habits. New topics – such as electrification – require people to move out of their usual comfort zone, which requires time.
Consequently, introducing an electrification programme means managing the change process in the first instance. The pure market factors start speaking in favour of electrification – at least for a certain share of fleet vehicles – however, the right attitude to overcome the challenges of electrification seem to lack behind and thus turn out to be the real showstopper!