Autonomous vehicles are receiving a lot of media attention when it comes to the future of fleet management, but their full-scale implementation is still a while off. Fleet managers are searching for a competitive advantage today, especially when it comes to reducing costs and limiting ecological impacts. Where can they look for the next edge?
The answer might lie in going electric. Taxi companies, utility providers and delivery fleets around the world are transitioning to electric vehicles (EVs) and reaping the benefits. European taxi companies in particular are going electric, with Amsterdam offering an interesting case study. The city has installed 2,800 charging stations—and is looking to increase this to 4,000 in the near future—while also banning diesel vehicles from its central Low Emission Zone. As a result, nearly 20% of all Amsterdam taxis are already electric.
Is your company the next in line in this electric revolution? Giving up fossil fuels may be easier than you think.
Why Switch? The Plugged-In Perks of Going Electric
Why should you take your fleet electric? One of the biggest considerations is cost. With both fuel and insurance costs on the rise, keeping fleets on the road is more expensive than ever. Taxi companies need to find creative ways to save, especially when faced with competition from services like ride hailing. Electric vehicles may be the answer to this problem. With an efficiency rate of 73%, compared to just 13% for conventional vehicles, all-electric vehicles are much better than their traditional counterparts at effective energy use, keeping money in your pocket.
Electric vehicles are also designed to remain on the road and out of the shop. Compared to conventional vehicles that rely on an internal combustion engine, electric vehicles have significantly fewer moving parts, which means less potential for failure and fewer required repairs.
North America’s first Tesla taxi, for example, started operating in Québec City in 2014 and reached 100,000 miles (160,934 kilometres) in August 2016. There was no Tesla Supercharger in the city, so owner Christian Roy charged the vehicle at home, which he says cost around US$3,660 over the total distance. In contrast, his previous vehicle had required $700 in gas every month. Add Tesla’s eight-year unlimited-mileage warranty to the equation, and he says the pricey Model S has been incredibly cost-effective.
Going electric can also present secondary benefits to your fleet, drivers and business. Making the change to an electric fleet can improve a company’s image, especially amongst a millennial customer base that is more likely to shop eco-friendly. A recent study has shown that operating EVs is actually less stressful for drivers due to a lack of engine noise, while taking fossil fuels out of the mix helps improve physical health by halving driver exposure to toxic emissions.
EVs could save your business money, attract new clientele and improve the working conditions for your drivers. But if the changeover were a breeze, everyone would have done it by now. EV expansion is experiencing growing pains, and it’s important to consider these hurdles while you prepare to make the leap to electric.
When Should You Switch? The Challenges of Going Electric
While the cost of running and maintaining EVs can be beneficial to your bottom line, the initial cost of acquiring an electric vehicle is high compared to traditional vehicles. This is why it is worth checking if there is a rebate program available in your jurisdiction before making the switch. For example, a trial running in the city of Coventry offers taxi companies a £2,500 rebate for electric taxi orders, free charging and zero commission fares on taxi app bookings. Amsterdam also offered €5,000 subsidies on electric taxis until 2017, but ended it because widespread adoption made the incentive unnecessary. Fleet managers need to research the available rebates in their jurisdictions, and lobby local governments to establish incentives if they are not currently available.
While the initial costs of acquiring an EV can be reduced by rebate programs, discounts are of no help if there is a lack of charging infrastructure along your routes. In Canada, for example, there are only 5,000 public charging stations throughout the country, with most concentrated in major cities. In the U.S., there are still only 22,000 public charging stations classified as level 2 and DC fast charging. It is critical that taxi companies wishing to go electric ensure that adequate infrastructure exists. This may require an investment in private charging stations and in lobbying local governments to make a commitment to electric infrastructure.
The long-term savings—both financial and environmental—make going electric a compelling option. For areas where rebate programs do not exist or infrastructure is limited, taxi companies should take a leading role in encouraging local governments to make investments in the electric vehicle space.
Image: Shutterstock / EQRoy