It was just so exciting to see everyone at AFLA in San Antonio! From the networking events to the sessions, from the keynotes and dinners to the stay at the beautiful La Cantera Resort, and even the impromptu conversations in the hallways, the event was simply a delight to attend. So, what did we learn during our three days of meetings?
As always, the AFLA sessions provided a wealth of information from a well-rounded slate of speakers providing multiple points of view. Historically, when the industry gathers, there are always topics of mutual concern. This year, top of mind topics were supply chain slowdowns, chip shortages, OEM manufacturing pauses, and the electrification of fleets.
Electrification is not only everywhere in the mainstream media but was also a pervasive topic of conversation with the professionals at AFLA. Some fleet managers are ready to roll, some are ready to at least listen to the possibilities, and most are not sure how soon the resources will be there to support all of the anticipated changes. Attendees were all looking for more information on sustainability, multi-modal fleets, climate change, the development of infrastructure, government incentives, the status of legislation and the TCO of EVs. Two very informative panels focused on just these topics: “EV Infrastructure & Recharging Solutions” and “EV Assets and Calculating TCO”.
In the “EV Assets and Calculating TCO” session, we cautioned that you must be “realistically optimistic” in EV adoption. In addition to fixed and variable costs included in calculating EV TCO, the soft costs of fleet and driver needs must be considered for a total cost of adoption. These include training, availability, internal communications, updating fleet policies and managing driver expectations. All of the costs need to be balanced against tax and fuel savings benefits. In the end, the big question is when will EVs make sense for you? Is this the right time?
And if you are ready, the vehicles that you need may not be available. Vehicle availability differs by segment. While EV sedans are coming to market quickly, delivery vans and pickups are still developing. Like ICE vehicles, EVs are stuck in the supply chain and chip shortage stall.
Further, decisions must be made on what types of electric vehicles. PHEV vs. BEV? The BEV will have significantly lower maintenance costs. When used optimally, PHEVs are a great option for certain segments—assuming that drivers use them correctly. However, if hybrid drivers fail to charge vehicles and continually default to gas usage, there will be all of the maintenance costs of an ICE vehicle without gaining anything in emissions reductions or MPG. Without fleet policies, drivers will opt for the easiest refueling method, which currently is a gas station. Employee buy-in is crucial at all levels.
The impact of transitioning to EVs is not isolated to the fleet department. Other departments are stakeholders in the process, from HR to Sustainability to Finance. Company polices need to be built around EVs. This is a time for fleet departments to realize that they must move from being tactical to becoming the corporate strategy leaders for electrification. Easily said, when you’ve been pushing for years to get the headcount to move beyond being tactical!
A key component in the electrification evolution of fleets will be the final version of the hotly debated infrastructure bill. It is estimated that we will need 10 times the number of chargers currently in existence to meet goals set for 2030. Will the final bill get us to where we want to be? No, but it will be a start. [Editor: It passed!]
This is a revolution that will require patience. In the meantime, continuing with all of the traditional means of sustainability could be your best interim strategy. You know what this means: maintain vehicles for efficiency and savings, watch tire pressures, plan routes, and use your telematics to monitor excessive idling, fast accelerations, and hard braking. All of the current sustainability recommendations still apply. When you are ready for the transition, consult your FMC for the expertise provided by their many experts.
No matter how slow-moving this revolution seems, it is quite clearly coming. Yes, there will undoubtedly be growing pains and stalling points for certain sectors. However, this is a juncture in time where economics, environment and public opinion are driving the change. Prepare or don’t but be aware that there will be no going back.
Editor’s Note: FMW thanks AFLA for granting us permission to publish this article which appeared in October 2021 AFLA Insights.