How Fleets Can Electrify Light-Duty Commercial Vehicles

Real world data along with insights from global fleets show why fleets should electrify, and how.

The 180 million light-duty commercial vehicles across the world, including sedans, sports utility vehicles (SUVs), vans, and pickup trucks, account for nearly half of global greenhouse gas transportation emissions. These emissions are roughly the same amount produced by aviation, shipping, and heavy-duty freight combined. Fortunately, many forward-looking fleets are committed to decreasing these emissions as they look to lower their carbon footprint.

There are many approaches to decarbonizing a fleet, but one of the most impactful is switching to battery-electric vehicles. Electrification’s long-term cost savings also offer a powerful motivator. As fleets contemplate how best to electrify their vehicles, one thing has become clear — the challenges they face require them to think and operate differently.

As with any industry, to make informed decisions leaders need robust data and analysis. That’s why RMI worked with Element Fleet Management — the largest publicly traded automotive fleet manager in the world — and their Global Alliance partner, Arval, using anonymized performance data from their global client fleet to explore the feasibility and benefits of light-duty commercial vehicle fleet electrification.

The analysis, detailed in the 2024 Global Electrification Report: Accelerating Fleet Decarbonization, draws on the real-world experience of fleets operating in Australia, Canada, Mexico, New Zealand, the United States, and a broad European market. Our analysis also categorizes the benefits of fleet electrification and strategies for overcoming common challenges.

We found that in many geographies, EVs are becoming increasingly cost competitive with their gas-powered counterparts. In Europe, sedans and SUVs in Element-Arval Global Alliance (EAGA) fleets are already achieving total cost of ownership (TCO) parity with gas vehicles on a cost per mile basis. The difference in TCO for EVs and internal combustion engine (ICE) vehicles is generally lower for high-mileage vehicles such as US vans and pickups in EAGA fleets. Since EVs tend to have lower fueling and maintenance costs, they can accrue savings over their lifetime relative to a comparable ICE vehicle. And as more EV models enter the market and battery prices continue to decline, this TCO gap will reduce further.

EAGA fleets are also achieving significant emissions savings. Some are realizing a 90 percent or greater reduction in tailpipe emissions. Naturally, countries with high levels of renewable sourced energy, such as Canada, New Zealand, Norway, and France, have the largest emissions reduction potential.

Our recommendations, detailed in the report and outlined below, can help business leaders and fleet managers develop and successfully implement a thorough change management plan, regardless of where they are in their decarbonization journey.

Recommendations

1. Create a roadmap for fleet decarbonization

Although it may seem obvious, the importance of creating a roadmap bears repeating, as many fleets make the mistake of moving forward with their electrification efforts without detailed transition plans. For instance, some fleets purchase EVs without planning how and where drivers will charge them.

So, what does a detailed transition plan look like, exactly? Fleets need to:

• Prepare by taking stock of existing operations to develop a baseline, understand fleet and driver needs, and identify potential opportunities for decarbonization.
• Plan by developing strategies to electrify fleets that include timebound implementation activities.
• Pilot smaller-scale deployment to test new operational models and/or vehicles.
• Scale electrification and decarbonization activities to the full fleet.
• Monitor, evaluate, and optimize fleet use to improve operations.

The report includes concrete actions fleets can take as they’re going through these steps, as well as the benefits that will result.

2. Assess EV readiness

Any successful electrification efforts require a deep understanding of the EV ecosystem. Without it, they run into avoidable bottlenecks, delays, and costs. The following factors deserve particular attention:

• Electrification plans’ alignment with companies’ sustainability goals
• Electrification and charging scenarios
• Knowledge of what EV modes can handle the trip length, load, and other operating needs of the vehicle they are replacing, and the associated charging infrastructure
• Possible reimbursements for charging infrastructure and energy
• Driver, fleet manager, and other stakeholders’ familiarity with electric vehicles (EVs)

Fleets will also need to assess a region’s EV market by:

• Comparing the TCO between fossil-fuel powered vehicles and EVs available in the region;
• Assessing the availability and strength of public charging infrastructure, including home charging and other charging solutions;
• Assessing current and forecasted market availability of EVs;
• Understanding technology trends such as charging standard harmonizations;
• Assessing grid mix to determine how “clean” battery charging is; and
• Understanding consumers’ (both individuals’ and companies’) willingness to buy an EV.

3. Apply telematics data to enable EV transition and operations

You can’t manage what you can’t measure. All fleets, regardless of where they are in their decarbonization strategy, will benefit from the collection and analysis of telematics data.

Those planning to transition can use existing data on trips, distances traveled, fuel use, and dwell time to identify which ICE vehicles are best suited for EV replacement. Fleets in the midst of deployment can use the same data, as well as driver behavior, to inform their infrastructure planning. And fleets that have already made the transition can use such data to optimize their operations. The report lists the many other benefits of data analysis.

4. Design first EV deployment to inform wider fleet needs

A gradual, staged approach to fleet electrification helps fleets successfully transition to EVs. Smaller-scale deployments provide fleets with an opportunity to learn how EVs will impact their operations in real-world conditions. These pilots and the performance data collected can be used to inform and streamline future larger deployments. Such pilots can also help alleviate drivers’ range anxieties and elicit their perspective, insights they can integrate into their change management strategies.

From the Why to the How

As this report’s research and that of many others shows, fleet electrification is feasible and can not only benefit the environment, but also companies’ bottom lines. The question we must answer is not why, but how. This report seeks to answer that question.

To dive deeper into these findings, the methodology, and robust change management recommendations for decarbonizing fleets, check out the full report.