Electric Vehicles: The Future of Fleets

March 18th, 2020 | by Diptii Tiiku, Senior Director of Corporate Marketing | Posted in: Insight on Things

Electric Vehicle Fleets

The way the world moves is changing rapidly. Electric Vehicles (EV) are at the forefront of this change. It’s not just people that are beginning to realize the benefits of an EV. Companies are using EVs to revolutionize their business practices too. By 2030, Amazon will add 100,000 all-electric vehicles to its delivery fleet with the first vans hitting the road as early as next year. 

Companies in the car and ride sharing space, such as Lyft and GIG, have been heavily investing in EVs. For these companies, replacing or augmenting internal combustion engine (ICE) fleets with EVs is becoming the new normal as the operating costs savings of Electric Vehicles becomes more evident.

Growing Demand 

The demand for car and ride sharing has increased dramatically over the past few years. In 2017, 10 million people were using a car sharing service. By the end of 2020, Frost & Sullivan estimates that there will be 36 million users with an annual growth rate of 16.4 percent. They explain that several factors are driving the growth: 

  • Cheaper: Shared mobility eliminates expenses including car payments, fuel, insurance, parking, and maintenance
  • Freedom: Services offer more freedom and flexibility with a variety of mobility styles
  • Convenience: Apps have made it easier and faster to request rides or vehicles than traditional services
  • Societal gains: Ride and car sharing reduces private vehicle ownership, taking cars off the street, making city living more accessible

Benefits Electric Vehicles Bring to Car Sharing and Car Hire Fleets

With demand for shared mobility on the rise, shared mobility companies are under pressure to find environmentally friendly, cost-effective ways to service this growing marketplace. EVs provide a key component to running a profitable shared mobility offering. 

Reduced Service and Fuel Costs

Typically, a shared vehicle is driven more than a privately owned vehicle. This naturally leads to increased maintenance and servicing needs, which are costly expenses for fleet operators. With EVs maintenance costs are considerably lower; no oil to change, fewer moving parts, and less brake wear as the energy is recaptured by the motors. (Tires, however, are consumed 30% more quickly by EVs!) These savings more than offset the high purchase cost of EVs.

Beyond the service savings, it’s well known the low pricing of electricity makes EVs more cost-efficient to operate than gas-powered vehicles. Mile for mile, it costs less than half as much to operate an EV than an ICE vehicle.   

Savings for the Customer

The reduced fuel and operation costs also represent savings that can be passed along to the customer. With this in mind, GIG Car Share, powered by AAA of Northern California, has built the largest all-electric car sharing fleet in the U.S. By using EVs, they’re able to service more customers for as low as $0.40 per minute. (A rate that includes street parking, charging, and insurance.) 

GIG Carshare

Reduced Carbon Footprint

More and more countries, regions, and cities around the world are setting aggressive carbon reduction targets. Companies offering mobility solutions that reduce emissions are helping to accelerate progress toward these goal numbers. As a result, cities have been welcoming to car share operators offering EV fleets. 

In Madrid, parking in areas of the city center is entirely free for zero-emission vehicles. This made it the perfect place for Groupe Renault and Ferrovia to launch ZITY a 100 percent electric car-sharing service—with great success. In just six months, 100,000 users had signed onto the service, leading ZITY to expand operations into Paris.

In some countries, the move to electric vehicles is more than goodwill, it’s a mandate. The Indian government has declared that all new vehicles must be electric by 2030. BluSmart is taking a leadership role in India and launched a zero-emission fleet of 70 rideshare vehicles in 2019 in New Delhi with plans to quickly expand into other cities with a fleet of 500 electric cars. 

BluSmart Ridesharing

Meeting Consumer Demand

Governments aren’t the only ones demanding more eco-friendly transportation options. A recent consumer study revealed 50 percent of consumers around the world are interested in owning an EV. In the U.S., that number jumps to 63 percent. Lyft is looking to help these consumers opt for eco-friendly transportation even before they purchase their first electric vehicle. 

As part of Express Drive—a rental program that provides vehicles to drivers who don’t own a car—the company deployed a fleet of 200 EVs in Denver. This represents Lyft’s largest EV deployment to date as they move to a 100 percent electric car hire network. To make it even easier for consumers to go eco, they’ve added Green Mode to their app, which allows customers to request an EV ride specifically. 

Overcoming the Limitations of Electric Vehicles

Even with the myriad benefits of EVs, the limitations of these vehicles have historically prevented companies from making a move to electric. Thankfully, state and federal agencies, manufacturers, and others are working together to help companies overcome these obstacles through both incentives and infrastructure. 

Incentives Minimize Cost of Ownership

While EVs come with a higher price tag, cities, states, and nations are finding ways to incentivize electric vehicle ownership. Madrid’s free city-center parking is just one example. Others are offering purchase rebates as well as registration and ownership tax benefits. 

Lyft’s Denver EV deployment was made possible, in part, by legislation Colorado passed in May of 2019. The new law allows rideshare rental services to qualify for an EV tax credit previously only made available to consumers. At up to $5,000 per vehicle, credits like this make it much more affordable to build an EV fleet. 

Expanded Network of Charging Stations

With existing infrastructure built around ICE vehicles, some fleet managers are concerned they won’t be able to charge vehicles as easily as they can fill the tank. This concern is diminishing as more government agencies, utilities, and companies expand the network of charging stations. Since 2015, the number of charging stations in the U.S. has more than doubled to more than 21,000. That figure = will continue to grow as more companies commit to expanding the charging network

With all the developments in the industry, we expect to see many people experiencing getting behind the wheel of an EV. Mobility companies laying the EV groundwork now will be in a winning position as eco-friendly become mainstream. 

Author: Diptii Tiiku, Senior Director Corporate Marketing, Ridecell

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