{"id":4398,"date":"2020-02-10T13:53:13","date_gmt":"2020-02-10T12:53:13","guid":{"rendered":"http:\/\/en.advancedfleetmanagementconsulting.com\/?p=4398"},"modified":"2020-02-10T13:53:13","modified_gmt":"2020-02-10T12:53:13","slug":"4398","status":"publish","type":"post","link":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/2020\/02\/10\/4398\/","title":{"rendered":"TCO for EVs: Working Toward a Solution"},"content":{"rendered":"

TCO for EVs: Working Toward a Solution<\/strong><\/h3>\n

As we move toward the third decade of the 21st Century, fleet managers are faced with more and more options when developing vehicle selections. \u00a0One of those options that has been around the longest are electric vehicles.<\/p>\n

The benefits of EVs can be enticing, such as very little in the way of maintenance costs, a range of government subsidies to offset higher purchasing prices, and \u201cfueling\u201d the vehicle with electricity that is far cheaper than gasoline. But there are drawbacks as well: lack of widespread national charging infrastructure, limited driving range, and the associated range anxiety that goes with it.<\/p>\n

Automotive Fleet spoke with Yann Kulp, eIQ Mobility\u2019s VP of business development, who cofounded the company with CEO Sila Kiliccote.<\/p>\n

AF<\/em><\/strong>: How long has eIQ Mobility been in existence?<\/p>\n

Kulp<\/strong>: We formalized the idea of developing a company that not only can provide a single per mile cost for EVs, but work with our customers in planning, implementing, and managing an EV solution in July 2018. The company was incorporated in December 2018, and was fully funded in January 2019, so about 11 months in operation.<\/p>\n

AF<\/em><\/strong>: It looks like the eIQ solution leans heavily on detailed analytics of substantial streams of data. \u00a0Doesn\u2019t the word analytics strike fear into those who aren\u2019t \u201ctechies?\u201d<\/p>\n

\"Yann
Yann Kulp, eIQ Mobility\u2019s VP of business development<\/p>\n

Photo courtesy of eIQ Mobility.<\/p>\n<\/figcaption><\/figure>\n

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Kulp<\/strong>: I suppose in some cases it does, but it shouldn\u2019t. Fleet managers use analytics every day. The operation of a fleet of vehicles throws off reams of data, some of it important, some not so much. Fleet managers use the data that is actionable, meaning that it can be used to take action or solve problems in developing vehicle selection, benchmarking costs, even building fleet policy and procedures. Calling it analytics doesn\u2019t change the fact that gathering and analyzing data is the foundation of the fleet management profession.<\/p>\n

AF<\/em><\/strong>: \u00a0What was it that prompted you and your team to address the issue of EV data and TCO?<\/p>\n

Kulp<\/strong>: Clearly, fleet management analytics have for a long time focused on internal combustion engine (ICE) vehicles. Fleet managers have developed an expertise and experience in capturing and using the data that ICE vehicles create. There are, however, substantial differences between the operating data for EVs and ICE units, most prominently in that variable expense that dominates either fuel.<\/p>\n

AF<\/em><\/strong>:\u00a0How are such differences manifested? \u00a0What are the major elements?<\/p>\n

Kulp<\/strong><\/em>: Again, fuel costs for ICE vehicles are relatively simple to capture and track. Though the cost at the pump does vary by location, that cost is expressed in simple dollars and cents, i.e., \u201cx\u201d dollars per gallon of fuel, whether it\u2019s gasoline or diesel. The only variable in ICE fuel costs is the price at the pump, and that cost is expressed either financially, cents per mile driven, or efficiency, miles per gallon of fuel. Plus, fuel pricing is fairly stable in the short term (days) and only fluctuates in the longer term (months and years).<\/p>\n

EVs, powered by electricity, have a far more complex data set involved in developing \u201cfuel\u201d costs, and there are 3,200 utilities in the U.S. But the industry is fortunate that nearly all cost data is now accessed digitally, and that benefit helps us to capture that data set for the fleet manager.<\/p>\n

AF<\/strong><\/em>: \u00a0What are the elements that eIQ captures, and how do they impact \u201cfuel\u201d costs?<\/p>\n

Kulp<\/strong>: Think about your home electric bill. \u00a0The cost of electricity differs in a number of ways from place to place and time to time. That cost can literally change depending upon the time of day, mode of transmission, time of year, even the weather. The concepts of demand charges, time of use, or peak power are new for fleets. So, the cost of charging a battery can vary depending upon whether it\u2019s charged overnight, during the day, during the week or on a weekend, etc.<\/p>\n

What we\u2019ve done is develop a data driven platform that captures data from utilities, fleets, EV and charger manufacturers, and other sources, which then builds a detailed cost model for fleets to use to determine the technical feasibility and best implementation of an EV strategy.<\/p>\n

We capture data on weather patterns (weather can have a substantial impact on EV range), details on driver activity \u2014 how far a driver drives doing the job \u2014 and contrast the nominal range of the vehicle, that is, the range an OEM advertises, with the expected range based on the above mentioned variables. And we can do that for thousands or tens of thousands of vehicles anywhere in the country in just a few days.<\/p>\n

AF<\/strong><\/em>: \u00a0As you know, TCO requires\u00a0other data as well. for example, ICE vehicle maintenance, tires on the variable side and depreciation and insurance on the fixed cost side. Does EV data differ for these other costs as well?<\/p>\n

Kulp<\/strong>: It does. However primarily on the maintenance and repair side; it is nearly nil for an EV, no fluid changes, no engine to maintain, and so the cost per mile driven is a great deal lower. \u00a0For tires it is a little different. \u00a0Depreciation is depreciation, the difference between original cost and resale return, and both are captured in the same manner as they are for ICE vehicles.<\/p>\n

\"eiQ
eiQ has developed a platform that captures data from various sources to provide fleets with a detailed cost model to use to determine the feasibility of implementing an EV strategy. Photo courtesy of eIQ Mobility.<\/p>\n<\/figcaption><\/figure>\n

That said, the sample of historical data for most EVs is a great deal smaller than it is for ICE vehicles, particularly for used vehicle values, making depreciation more difficult to project. Our flat cost per mile options include one which depreciates the full value over the course of time in service; TCO might be a bit higher, but it eliminates risk. Or, the customer can choose an open-ended model.<\/p>\n

AF<\/strong><\/em>: What about that original cost? \u00a0Aren\u2019t those costs higher for EVs than for equivalent ICE models?<\/p>\n

Kulp<\/strong>: They can be, in isolation, however it is important to include in that cost the various incentives at the federal, state, even local levels, even from utilities, to apply to a purchase cost. Those incentives, plus the dramatically lower costs of fuel, and minimal maintenance costs help to make EVs more price competitive. \u00a0We track every incentive in the U.S. and include them.<\/p>\n

AF<\/strong><\/em>: \u00a0Let\u2019s talk a bit about what kind of planning a fleet user needs to do to implement an EV program. \u00a0What kind of charging infrastructure is needed?<\/p>\n

Kulp<\/strong>: Yes, that is one of the two most often quoted objections to EVs we hear: \u00a0lack of charging infrastructure, and the resulting \u201crange anxiety\u201d users have. \u00a0But that so-called lack of infrastructure is only for outside, public charging.<\/p>\n

Our research and analysis on more than 45,000 vehicles has determined that most fleets, when properly deploying EVs, don\u2019t need anything more than a fairly simple Level 2 charger. In most cases we recommend they install a Level 2 charger in an employee\u2019s home or at their depots.<\/p>\n

AF<\/strong><\/em>: \u00a0What kind of deployment?<\/p>\n

Kulp<\/strong>: First, companies need to know how their vehicles are used; how many miles are driven in what period of time. Every fleet we\u2019ve worked with knows this inside out, and they have access to fuel card or telematics data. Certainly, a fleet vehicle that is driven hundreds of miles per day, tens of thousands of miles per year is not the best application for an EV. But most fleets are local and regional, with business conducted in a more compact geography, and vehicles driven less than 100 miles per day. \u00a0Such use doesn\u2019t require that kind of public EV fast charging infrastructure. Vehicles can plug into a Level 2 charger and be fully charged the next morning. \u00a0Our research finds that over 90% of company fleets in the U.S. can operate EVs using overnight charging.<\/p>\n

AF<\/strong><\/em>: So companies need to know how their vehicles are used and how far they\u2019re driven daily.<\/p>\n

Kulp<\/strong>: Exactly. When we show our analysis to customers, so called range anxiety can be turned into range awareness knowing how far a vehicle is driven, and the expected range, drivers don\u2019t need to be concerned with charging the vehicle while they\u2019re driving it.<\/p>\n

AF<\/strong><\/em>: What about charging times? \u00a0Don\u2019t EVs take hours and hours\u00a0to charge?<\/p>\n

Kulp<\/strong>: I think this is an area where the OEMs can do a better job of communicating with their customers. There are three charging options: Level 1 via a 110V outlet, Level 2 via a 220V charger, and Level 3 fast charge (DC versus AC). Most of the marketing material I\u2019ve seen says that a Level 1 charges in 22 hours, Level 2 in 8 hours, and Level 3 in 20 minutes (to 80% charge).<\/p>\n

But this is charging a \u201cdead\u201d battery to full charge; one would no more run an EV battery dead than they would a gas tank dry. Charging times depend entirely upon how much charge the battery has when connected to the grid. Let\u2019s say an EV is driven 75 miles a day, and the expected range is 150 miles. At the end of the day the battery already has a 50% charge in it; plugging it in a Level 2 outlet at 5 or 6 p.m. for a couple of hours will find it fully charged in the morning.<\/p>\n

It\u2019s that simple, and that\u2019s the message potential EV users need to get.<\/p>\n

AF<\/em><\/strong>: Makes sense. So eIQ Mobility captures reams of data, both internally and via vehicle telematics. \u00a0What is the ultimate product?<\/p>\n

Kulp<\/strong>: Right now, we\u2019ve developed EValuate, a fully functional analytical platform that uses data to help companies with the ultimate electrification and sustainability decisions. This includes helping decide the best models to use, optimal routing, charging options, and even emissions reduction outcomes from the recommendations. This product is available now.<\/p>\n

Sometime in the first quarter of 2020, we\u2019re targeting the launch of our management software product, which companies will use just like they use existing fleet management software for ICE vehicles, but specific to EVs. And just as important is our work with fleet management companies to provide \u201cfull solution\u201d contracts, where EV users will pay a fixed price for the life of a vehicle in the fleet, a fixed price that can include full depreciation, even the telematics product.<\/p>\n

AF<\/em><\/strong>: Talk about \u201crange anxiety,\u201d this kind of product can eliminate \u201cbudget anxiety\u201d in the use of EVs.<\/p>\n

Kulp<\/strong>: And that is the ultimate goal. Imagine knowing up front nearly exactly what a vehicle will cost over its useful fleet life. \u00a0We\u2019ll take fully actionable data and translate it into a single cost for the life of the EV. You can learn more at our website, www.eiqmobility.com<\/a>.<\/p>\n

by Bob Cavalli<\/p>\n

Source: https:\/\/www.automotive-fleet.com<\/a><\/p>\n

FLEET MANAGEMENT AUDIT<\/h3>\n

Fleet management is the use of a set of vehicles in order to provide services to a third-party, or to perform a task for our organization, in the most efficient and productive manner with a determined level of service and cost.<\/p>\n

Fleet management activities are shown in the following graph 1:<\/p>\n

\"fleet<\/p>\n

Graph 1: fleet management activities<\/p>\n

The proposal audit analyses and assesses all fleet management activities shown in the graph 1, and its main goals are:<\/p>\n