By Richard Mallek, Director of Business Development/ FLD Remarketing
May 29, 2022
As most fleet professionals know, the excitement around electric vehicles has been building steadily throughout our industry over the past few years. And while Covid definitely slowed this growing phenomenon, the subject has dominated conversations across our space before exploding to prominence at this year’s NTEA Work Truck Show in March.
In the few short months since then, EVs have also been the hot topic across fleet, including at this year’s NAFA Institute & Expo in April, the Ford and GM Summits held in May, and – presumably – will continue to do so at the upcoming Global Fleet Conference slated for early June in Miami, and the AFLA conference planned for October in Tucson. As it stands, several factors seem to be driving the head-long push towards EVs, including the massive injection of government money into the space, as well as the realization that OEM’s have essentially gone “all in” on electrification: re-tooling factories and developing new products and services.
As a leader and pioneer in fleet remarketing for 45 years, the team here at FLD has definitely taken notice of the proliferation of EVs. And while many service providers are starting to shift their business models to include elements of electrification, it’s likely going to be several years before we become actively involved in remarketing this new age of vehicles. So, while most of the fleet world is nothing short of giddy about the introduction of electric vehicles, many substantive questions remain around EV remarketing.
From our perspective, the EV world is still much like molten lava, reminding us of what the industry experienced when telematics first crept on to the scene. Still hot, still flowing, and still a long way from sorting out the eventual winners who will go on to be goliaths of the industry, and the losers who will fall on the scrap heap of anonymity.
Along the way, billions – if not trillions – of dollars will change hands in the years it will take EVs to become fleet’s vehicle of choice. And while most fleet observers feel this will happen, not everyone is completely convinced.
Many Unanswered Questions, Significant Challenges Ahead
Without question, our team here at FLD is decidedly bullish on EVs. That said, we’d be remiss if we didn’t point out to our customers, partners and friends in the industry that in our opinion there are many significant hurdles to clear before widespread EV adoption by fleets hits full stride.
Why?
Right now, the two biggest roadblocks to widespread EV adoption are the many challenges around vehicle charging, and the reality that today’s electric work vehicles have limited range.
When it comes to charging, there seems to be more questions than answers at this stage of the game.
For starters, the EV charging process is not as simple as fueling a traditional vehicle, and it can take significantly more time. Time that eats into a fleet or driver’s workday, something that really isn’t an issue with internal combustion engines.
An even bigger problem?
Finding a place to charge a vehicle, a difficult proposition in a country that currently has approximately 150,000 charge points. Simply put, there aren’t enough chargers to meet what currently amounts to a small demand, much less the staggering number of vehicles it would take to run America’s fleets. Nor does there appear to be the infrastructure to rapidly support large charging operations, a situation that won’t change for the foreseeable future no matter how much the government and private industry get behind the effort. That raises a lot of questions about the viability of EVs and how fleets will deal with this problem given the massive influx of EVs expected in the next few years. Currently it’s simply a numbers game, and the reality is that even if manufacturers produce minimal amounts of EVs, it could be a long time before there are enough places to charge them to make them viable options for fleets.
Besides charging, the limited range of most EVs presents a challenge for fleets. Especially given that many vehicles – when fully loaded – can’t complete a full day’s work before needing to be recharged. If vehicles have to be charged mid route, where will that occur given the lack of charging infrastructure?
And what about the realities of procuring the vehicles themselves?
While manufacturers are happy to take “reservations” for new orders does anyone really believe that Amazon will soon take delivery of the 200,000 electric vans it recently agreed to purchase? Or that Pepsi will be driving around in the thousands of Tesla semis they’ve requested?
And while corporations are quick to bandy about terms like “sustainability” and “green initiatives,” there are still many unanswered questions about whether EVs are actually better for the planet given all that goes in to making the massive lithium batteries that power them.
And lest anyone forget, the industry is facing several other challenges that could slow the move to EVs, including chip shortages, supply chain issues, and a lack of drivers, all issues that continue to persist years after the dawn of Covid.
In our opinion, these questions will have to be answered before fleets can confidently deploy EVs in wide enough numbers to have a marked effect.
Mass EV Remarketing Likely Years Away
From a remarketing perspective, widespread resales of EVs are likely still years away as there are still so few EVs in the space (and most of those Tesla’s for now.)
From a practical standpoint, there are also still questions around remarketing EVs, including what the process will look like, and what best practices will entail. For starters, how will fleets transport used EVs when they’re ready to be remarketed? Not only because of challenges around charging and range, but for a host of reasons no one fully understands yet.
And what about the auction sites and dealers themselves?
Currently, many auction sites are understandably uncomfortable running EVs through their existing protocols and facilities. As the recent fires aboard a massive transport ship transporting 4,000 luxury and electric vehicles across the Atlantic Ocean showed, putting out fires involving large, powerful batteries presents its own set of problems. And from a larger perspective, there are also many questions around how batteries in remarketed vehicles will be recovered and stored.
Salvage and storage facilities will also face a unique set of problems with EVs. After all, where does one store hundreds of vehicles that could possibly be an environmental or safety hazard? What if these assets have been damaged? And what if the batteries are no longer viable? All of these important questions will need to be answered before EVs are widely remarketed.
About the Author
Richard Mallek is Director of Business Development for FLD Remarketing, a committee member with AFLA, and a 15-year veteran of the fleet space. You can reach him at [email protected], or by calling 1 (800) 754-1522 any time.
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