In recent years, the landscape of fleet management has been undergoing a significant transformation, driven primarily by the rise of electric vehicles (EVs) and the increasing emphasis on sustainability.
Traditional fleet management organisations (FMOs) that have experience managing internal combustion engines are now facing competition from new entrants who are challenging the status quo with innovative approaches. These new players are not only offering different perspectives on fleet management but are also leveraging their experience with electricity to take a bullish view on EV future values to redefine the total cost of ownership (TCO) for companies aiming to achieve net-zero emissions.
A new approach to fleet management
Traditional FMOs have built their business models around internal combustion engines and the associated services, such as maintenance and fuel management. However, with the advent of electric vehicles, new entrants are emerging with a focus on integrating modern technology and sustainability into fleet management. These newcomers are moving beyond the traditional skill set of FMOs, aiming to offer a more comprehensive and forward-thinking approach.
Electricity retailers, for instance, are utilising their experience in converting their own fleets to electric to assist other organisations in making the transition as seamless as possible. They combine traditional FMO capabilities—such as reporting, servicing, and maintenance—with additional support in energy management and charging infrastructure. This holistic approach ensures that fleet managers are well-prepared for the transition to EVs and that the necessary infrastructure is in place.
A new wave of fleet consultants are also playing a crucial role in this transition by analysing existing fleets and identifying opportunities to reduce their size before transiting to EVs. They analyse the movements and utilisation of the fleet to develop a long term fleet strategy linked to mobility rather than the number of vehicles.
By incorporating government incentives and grants to present a comprehensive Total Cost of Ownership (TCO) for EVs, the new entrants are able to escape the conservative residual values being applied by FMOs to help clients implement new electric fleets.
Leveraging energy expertise
One of the significant advantages of new entrants in the fleet management space is their deep understanding of the electricity grid. These companies often have a background in energy, allowing them to offer valuable insights into the installation of electrical works and the implementation of charging infrastructure. By leveraging their extensive experience, these new players can ensure that the infrastructure is not only safe and compliant but also cost-effective.
A key aspect of this cost-effectiveness is the management of energy consumption. New entrants understand that a significant portion of energy bills for large businesses is associated with capacity and demand charges. By optimising charging schedules and utilising load management systems, they can help organisations avoid peak energy periods and reduce these charges. This approach can lead to substantial savings on energy bills and improve the overall TCO for EVs.
Smart charging technology is another area where new entrants add value. By using software overlays and data links, they can schedule charging during off-peak hours, further reducing energy costs. For businesses with solar panels, this approach can be even more beneficial, as excess energy generation during the day can be used to charge the vehicles at minimal cost. This level of control over energy usage is not available with traditional fuel models, making EVs an attractive option for fleet managers looking to reduce TCO.
The impact of carbon credits
As organisations strive to achieve net-zero emissions, the concept of carbon credits is becoming increasingly relevant. Carbon credits allow companies to offset their emissions by investing in projects that reduce or capture greenhouse gases. When calculating the TCO of a petrol or diesel vehicle, organisations should start considering the cost of purchasing carbon credits to offset their emissions. This additional cost can significantly impact the TCO of internal combustion engine vehicles, making electric vehicles a more attractive option.
For example, when comparing the TCO of a petrol car to an electric car, the cost of carbon credits for the petrol vehicle must be factored in. This cost can make the TCO of an electric vehicle more favourable, especially when considering the long-term savings from reduced energy costs and maintenance. This logic is even more compelling when applied to trucks and other heavy plant equipment, where the TCO for electric-powered fleet assets can be substantially lower.
The fleet management industry is at a pivotal moment, with new entrants challenging traditional FMOs by offering innovative solutions centred around electric vehicles and sustainability. These new players bring a fresh perspective to fleet management, leveraging their expertise in energy and technology to provide comprehensive support for organisations transitioning to EVs. By integrating smart charging, load management systems, and carbon credits into their TCO calculations, these new entrants are helping companies not only achieve their sustainability goals but also realise significant cost savings. As the industry continues to evolve, the role of electric vehicles and carbon credits will undoubtedly become increasingly important in shaping the future of fleet management.
