EV Suitability Depends on the Use Case (ACT Expo 2024 Recap)
More so than any other year, battery electric vehicles were the talk of the ACT Expo 2024 conference, and the focus in the ride and drive and expo hall as well. But speakers broadly agreed that BEVs are still not suitable for every use case. Factors determining the extent to which BEVs are suitable, and the pace and scale that make sense for the fleet’s transition include the fleet’s approach to sustainability, the types of vehicles in the fleet and their duty cycles, and the extent to which electrification supports the company’s operational mission.
The fleet’s approach to sustainability
Moderating a CEO roundtable on scaling vehicle electrification, Art Vallely, President at Penske Truck Leasing, categorized the market into three groups. “The first group is comprised of the very large fleets that have made ambitious sustainability commitments and are willing to put money behind testing zero-emission vehicles, regardless of the ROI.” The second group “are eager to transition the fleet to ZEV when total cost of ownership and vehicle performance are on par with traditional fuels.” The third group “have put the zero-emission transition out of their minds for now given the lingering freight recession.”
Broadly agreeing with Vallely’s categorization, John O'Leary, President and Chief Executive Officer at Daimler Truck North America (DTNA), said that the second group makes up about 80 percent of the market. But, he said, “For those operators, it won’t work to wait until all the stars are aligned. There are opportunities to electrify even a small portion of the fleet where it makes sense given factors like vehicle routes, power capacity, and cost of electricity. These opportunities are where the big value add is right now.”
Mathias Carlbaum, President and Chief Executive Officer at Navistar, agreed, saying to fleets, “You can’t wait to go zero-emission. If you’re not trying what’s available today you’ll be behind the adoption curve. At least try one ZEV to understand how it could work within your fleet. Because the reality is that ZEVs are not going away.”
Jonathan Randall, President at Mack Trucks North America, said, “We work with our customers to find routes where ZEVs can work and carve out a piece of their operation for transition to zero-emission.” Carlbaum agreed that a fleet “doesn’t have to tackle whole challenge at once. Find the main routes that work best for transition and take it from there.”
The types of vehicles in the fleet and their duty cycles
Another determinant of the pace and scale of a fleet’s ZEV transition is the type of vehicles. Broadly speaking, the transition gets more difficult the larger the vehicles are. “Light duty is mostly depot charging,” explained DTNA’s John O’Leary. “Light duty electrification at the depot certainly presents challenges, but it’s as you go up in size to medium-duty and heavy-duty vehicles that depot charging becomes less viable and you have to think about the charging network and how the various routes will be served. It forces broader thinking.”
Speaking specifically about heavy-duty, Mack Trucks’ Jonathan Randall said, “The largest share of the Class 8 market is fleets of less than 10 trucks. We need to get those folks in.” For medium-duty, the company developed an offering designed to completely derisk the transition. “We can bill customers an all-in cost per mile. At the end of the five-year term they just give us back the truck.” There has been a lot of customer interest in that offering, Randall said, but no uptake yet.
Speaking on a panel with a cohort of transportation leaders from Walmart, Senior Engineering Manager Brooke Weeks explained that the company’s fleet is comprised primarily of four asset types: light-duty vehicles for last mile delivery, over-the-road tractors, yard trucks at distribution centers, and refrigerated trailers. “For each asset, transitioning to zero-emissions has its own unique challenges and complexities,” she said. “So each asset is at a different stage on the transition journey.”
In the last mile segment, Walmart has over 1,100 electric delivery vans currently deployed, Weeks said. “And that fleet will continue to grow.” The company also has deployed electric yard trucks in California “and we’ll take our learnings there into a network-wide expansion.” Over-the-road tractors and refrigerated trailers present a more difficult electrification challenge. “We’re in the initial pilot phases for those segments and there’s a lot of complexity we still need to solve.”
Similarly, Mack Trucks’ Jonathan Randall explained that 75 percent of the heavy-duty truck market is on highway, and the other 25 percent – which represents about half of Mack’s business – is vocational. “The solution for mixers and logging trucks, for example, is probably not battery electric today,” he said.
In contrast, said DTNA’s John O’Leary, school buses represent an ideal use case for electrification. “By the end of this year 10 percent of new large school buses will be BEV. We’re seeing a nice upward slope of adoption. It’s an example of a great application meeting great products and great incentives that drives strong adoption.”
Testing is key to determining which types of vehicles are best suited for electrification. Walmart developed a comprehensive approach that includes validation testing and operator testing. “We run new vehicles on very specific types of routes in very specific locations and measure very specific KPIs,” said Weeks. “That gives us confidence that we know the operational impact when we deploy the vehicles into our fleet. We also solicit feedback from drivers to make sure the vehicles are not only hitting our KPIs but also boosting driver satisfaction.”
The extent to which electrification supports the company’s operational mission
Chad Harris, Senior Director of Product Management at Walmart explained that the company’s “different vehicle types, duty cycles, and use cases” require “a mix of ZEV solutions.” Supporting the mission of the business is the top priority. Walmart Transportation Vice President Ryan McDaniel explained, “Customers are counting on us for their basic needs. They won’t accept a late delivery because the driver had to stop en route for charging or because the power grid was down or because the electric tractor broke down and there wasn’t a maintenance person who knew how to fix it.”
For Walmart, it is “unacceptable” to pass higher costs associated with BEVs on to customers, explained McDaniel. “We have to find a path where TCO is at least on par if not better than with diesel.” Levers include the cost of the vehicle, operating costs including fuel and maintenance, and charging infrastructure costs. “When it comes to cost there’s also an operational component,” said Warren J. Moore, Vice President of Dedicated Delivery at Walmart. “I’m proud of the strides we’ve made to make operating electric vans on par with ICE vehicles. We’ll continue to get better through routing, how we load, etc.”
Despite a very different use case than any fleet has, Adam Wright, CEO at Pilot, explained a similar approach to electrification in his fireside chat with GNA President Erik Neandross. “People want to use their EVs for the great American road trip,” he said. Serving those vehicles, and their drivers, requires a different approach than for ICE drivers. “A lot of EV drivers sit in the car while it’s charging rather than coming into the store. EV drivers do have different preferences than ICE drivers typically do (kombucha v. soda and hard boiled eggs v. hot dogs). Our business is to convert fuel customers into store customers, so we have to figure that out.”
Determining the right approach for fleet electrification
When it comes to deciding how to start fleet electrification, Navistar’s Mathias Carlbaum, said, “Overlay operations data with utility capacity and energy price data to find the geographies, customers, and applications that are best for electrification.” Identify the “microclimate” best suited for pilots, he recommended.
Walmart’s Brooke Weeks acknowledged “the challenges are difficult to solve and there’s a lot of complexity.” The first step is “choosing the right vehicle that minimizes risks to service (safety, service, cost),” she said. “We measure normal fleet KPIs to make sure EVs don’t impact the level of service we’re providing to our customers.”
From an infrastructure developer’s perspective, how a customer approaches the transition affects our decisions about how best to design and operate the charging facility. As Voltera CEO Matt Horton explained on a panel titled The EV Charging Depot Ecosystem, “The first step is understanding the customer and their use case.”
For an in-depth description of the various charging infrastructure solutions in the market and how they fit with various use cases, check out Playbook 3: Finding the Right Solution for Fleet Electrification at Scale. If you’re ready to see which solution might be best for your fleet, take the EV Charging Infrastructure Solution Recommender.