*Fleets are all around us and include municipal buses and police vehicles, taxis & ride shares, last-mile delivery vans, and much more!*

Fleet electrification is my entry point into the renewable energy space where I will dedicate the next decade of my career. But in order to help deliver world-class software solutions for electrification, I first need to understand the critical problems these transportation businesses face.

Why Product people love good problems

One of the best lessons I learned as a software product manager was to fall in love with the problem, not the solution. I reinforce this with all my teams because product managers are often the only people in the room who recognize the hazards of diving into solutions prematurely.

Most of the people we collaborate with in our world, including CEOs, sales teams, account managers, and especially our customers & end users want to quickly jump to what always seems to be the obvious answer:

"Just put a button there!"

This rush to build something before properly digging in to understand the actual problem leads to unnecessary waste. In fact, the software industry is notorious for releasing product features that do not come close to hitting the intended mark, which is creating real value for the customer.

When your team is contemplating building any solution, it is beneficial - if not imperative - that you evaluate and confirm the actual problem that needs to be solved. This increases the chances of getting the solution right and reduces the time and money wasted on pursuing wrong turns.

Exploring the problem space for fleet electrification

Fleet electrification isn’t the problem of course, but it is connected to our changing climate. Electrification is a solution and actually only one of many potential solutions we must apply to the planet-sized problem. It is helpful to understand the size and scale of that problem first by zooming way out beyond commercial fleets.

The energy sector used to top the list but in recent years, we have made considerably progress in introducing clean, renewable energy sources into the mix which has yielded many positive impacts on the environment.

Around the globe, commercial vehicles are one of the biggest culprits. The transportation sector is now the leading source of harmful emissions, with vehicles collectively contributing more than 25% of global greenhouse gases (GHG).

The root problem is that we are putting millions of internal combustion machines on the road that directly contribute to the accelerated warming of the planet. Something clearly has to be done, but we won’t fully solve the problem by encouraging individual households to swap their gas guzzler for a zero-emission EV.

Most climate change media stories are reinforcing a false narrative. They suggest that the problem lies with individuals and the energy sources & consumption choices we make in our personal lives. Like the original campaigns to promote recycling and to re-evaluate our carbon footprint, this is at best a deflection and does not advance the cause.

Electrification-oriented strategies frequently highlight the risk of focusing too much on the collective actions of individuals. As with installing solar panels on your roof or replacing your gas-powered furnace with an electric heat pump, switching to an EV for your daily commute and occasional family road trips won't fully solve the problem.

The desired net-zero and carbon-free future states will require comparable commercial, industrial, and government action as well.

The US is second only to China in terms of GHG emissions by volume. The EPA reports that road vehicles, specifically light-, medium-, and heavy-duty trucks account for the lion's share of emissions in this country:

*These* *EPA numbers* *paint a clear story around where help is needed in Transportation*

By agreeing that commercial transportation (i.e., trucks, delivery vans, semis, etc.) is the primary source of the problem, we can move forward on identifying strategies to achieve better outcomes.

Vehicle electrification is one of many transportation solutions

Proponents of all-electric vehicles insist that we have to find a viable path to replace gas- and diesel-powered engines with their electric alternatives. And this argument is gaining traction around the world.

It is no longer far-fetched to think that in 30 years, all personal mobility will be electric as we transition our own transportation options over to passenger EVs, e-bikes, electric scooters, and hoverboards of course. But personal mobility and household electric vehicles are not the whole story.

To address the core problem of eliminating harmful CO2 emissions from vehicle tailpipes, it is necessary to consider where electrification, as a viable option falls on the spectrum of potential solutions:

Option 1. Improved fuel-efficiency options for internal combustion engines (ICE)

Vehicle manufacturers have proven they can create more fuel-efficient cars & trucks, and state and federal regulations have long provided various "incentives" for these advancements. Reducing the amount of gasoline we burn to travel the same distance, DOES lower overall emissions, although the improvements are incremental. This approach also prolongs our dependence on (increasingly finite) fossil fuels.

Option 2. Low-carbon and/or alternative fuels including natural gas, biodiesel, and renewable diesel

You have likely noticed these municipal or utility vehicles on the road that are adorned with prominent decals highlighting bold marketing messages like "clean natural gas" or "powered by cleaner burning, renewable biodiesel". These ventures aim to convert vehicles away from traditional ICE fuels to reduce the impact on the planet. And while each of these options will have varying lifecycle emissions depending on the corresponding feedstock and production methods in use, all continue to emit harmful tailpipe emissions.

Option 3. Low emission vehicle alternatives, including hybrids

Hybrid cars and trucks may ultimately turn out to have been an interim solution while we wait for fully electric vehicles to reach sufficient scale, but it is a fact that any vehicle that uses its internal combustion engine less often is emitting fewer harmful GHG into the atmosphere. The automotive industry has already produced multiple hybrid versions including parallel, series, and plug-in, all of which demonstrate new, creative ways to continue utilizing gas-powered engines.

Option 4. Battery electric vehicles (BEV)

At this point along the solution spectrum, we have eliminated ICE machines altogether and are powering vehicles on electricity alone. This is where the real impacts of the energy transition start to appear as the world revamps and rebuilds massive infrastructure to support EVs of all kinds, both on- and off-road. It must be noted that for this solution to have a planet-sized payoff, the electricity for recharging needs to derive from clean, renewable sources.

Option 5. Hydrogen fuel cell powered vehicles

A little further down the road we might incorporate other viable transportation alternatives. Hydrogen fuel cell vehicles are already in production, albeit at low volumes. There isn't sufficient refueling infrastructure at the moment to support consumers but again, if we are looking for possible solutions that indeed address the root problem of GHG emissions, we should include (clean) hydrogen as another data point.

Of the options included here, only one is going to have a substantial impact on reducing global emissions AND is viable to be deployed at scale.

Choosing to electrify fleets

The term fleet electrification refers to the deliberate and likely measured process of transitioning all ICE vehicles over to electric models. It prescribes a desired future state where there are no internal combustion vehicles in rotation and thus no need for the supporting fueling infrastructure or related maintenance-related skills/parts/etc.

So, the small business owner with a “micro fleet” of 2-5 trucks or the department in charge of the United States Postal Service fleet with over 40,000 vehicles will commit to retiring (or converting) all the current gas- and diesel-powered vehicles and ultimately operating ones powered solely by (clean!) electricity.

Businesses serving this fleet electrification space will build out products and services that tout the reduced total cost of ownership (TCO) of switching over to electric vehicles. Those value propositions may also highlight positive impacts on the communities (cleaner air) and ideally, on the planet (reduced emissions) but it is not yet clear whether those arguments will further incentivize fleet operators.

We now turn our attention to the viable fleet electrification scenarios and the subset of transportation problems specifically related to fleet operators.

Problems for fleet operators

Fleet owners and operators will face significant challenges when converting to electric that are unique to this segment of the transportation sector when compared to other modes such as planes or ships.

Moving from the known/familiar place of acquiring, refueling, and maintaining ICE vehicles to a new place where all of that changes highlights two primary areas of concern:

Transition-related problems

Large, complex migrations from one technology to another tend to share some common characteristics, and we should expect to encounter these in the fleet electrification transition too.

Deciding where to start - a chicken or egg problem

There are multiple moving parts in play but for the next few years at least, the availability and interoperability of all these new “parts” will impact decision making. For example:

The number of EV options for fleet operators to choose from has recently started to expand, but among the growing number of available models, the supplies are limited
There are compatibility issues among the EV charging station components that only multiply as the number of vendors and equipment options expand

Fleet operators are grappling with decisions about how fast to move on building out a new charging infrastructure at their facility while ensuring they can support a growing electrified fleet.

Deciding when to start

Pressure on fleet operators will mount over the coming years and it won’t just come from earnest salespeople pushing lower-cost electric vehicles and charging equipment. The calls to reduce CO2 emissions are being heard from stakeholders, from customers and even from employees. But it is still unclear what specific set of incentives will ultimately trigger the start of the transition.

Fleet managers also wrestle with questions like:

What are the penalties of stalling or delaying the decision to transition?
When will the right mix of financial incentives (rebates, credits, etc.) become too attractive to pass up?
How quickly will the public charging networks come into being and should that affect the timeline of building out a dedicated refueling infrastructure at our depot?

Supporting an interim hybrid model

Perhaps the most difficult challenge in transitions is when the old and new technologies don’t overlap. The new electric charging infrastructure will share very few components with the existing gas and diesel one. Throughout what is likely to be a multi-year migration, operators will still need to support the remaining ICE vehicles in their fleet.

So, even while operators should expect that a fully electric fleet will be less costly to manage, they must factor in the duplicate costs during the transition period, and that will impact profits and growth.

Supporting multiple depot locations

And all these transition-related problems will multiply when overseeing multiple fleet facilities. While fleet operators should expect to accelerate their deployment plans after sufficient ramp up, these kinds of physical & infrastructure transformations are not so easily stamped out even after having landed on a viable solution.

Steady-state problems

One of the more attractive arguments for transitioning fleets is that operators already know what the future must look like. It boils down to two familiar problems. First, on any given day, a vehicle must be able to perform the primary function it has been allocated for. And second, the operator must be confident that they can optimize the collective costs of managing the fleet.

Maintaining uptime

The concept of uptime is relatively simple. Any operational vehicle should be available to get from one place to another reliably and deliver on its intended purpose. For example, the fleet operator should be able to count on that vehicle to transport passengers, move freight, respond to an emergency, monitor an area, deliver goods, etc. and then be available for its next rotation.

A broader notion of uptime refers to the collective capabilities of the fleet vs. any given vehicle. As a fleet grows in size, the logistics challenges multiply where timely decisions must be made about what vehicle to deploy for any given route.

The electrification solution introduces complications because the “refueling” times are considerably longer for electric vehicles, although this may be addressed with future advances in battery technology, battery swapping options, and improvements to the charging infrastructure. The availability of operational chargers at any given location introduces yet another constraint for the operator and adds new variables into their scheduling algorithms.

Managing refueling costs

Along with managing the overall capacity/availability of the fleet, there is the additional and unfamiliar complexity associated with “refueling” electric vehicles. I have already mentioned that current EV models take much longer to recharge than their gas and diesel predecessors. But what is even more critical, is that the fuel costs associated with electricity are much more dynamic than in the ICE model.

These are the early days of building out the EV charging infrastructure and there is still much to learn about how best to predict where and when to recharge electric vehicles. Operators should expect to establish dedicated depot charging facilities and that comparable public charging stations will spring up in cities and on highways. For some fleet types, there may also be viable options for charging at home.

To the extent that the utilities will provide the majority of the expanded electricity needs, it will be imperative that operators (and drivers) dynamically adjust the charging schedules to factor in fluctuating energy rates over the course of a given day in order to optimize their overall costs for the fleet.

Wrap Up

Those of us advocating for and helping to accelerate the energy transition will be eager to move into the post-ICE world. And once the fleet operators have put all the migration challenges behind them, they will be able to return to the primary concerns of managing an electric vehicle fleet.

In this article, I have only concentrated on the businesses and organizations that operate commercial and municipal vehicle fleets, but as we seek to achieve electrification of transportation at scale, we also need to address the other major parties who will have their own related problems to solve:

Utilities need to accommodate expanding electricity demands from vehicle charging while making progress on decarbonizing the grid(s)
EV charging companies must deliver viable charging solutions that can scale and evolve over years
Car and truck manufacturers must accelerate the supply of new vehicles

I am eager to actively participate in this particular intersection of electrification and mobility. As a product leader, I continue to “love the problems” to better deliver useful, viable and valuable solutions for this industry.

Fleet electrification: falling in love with the problem