Here’s what you need to know before you take your fleet electric
More and more on-demand and shared mobility businesses are evaluating when and how to electrify their fleets.
As climate change and pollution become increasingly critical global issues, more and more on-demand and shared mobility businesses are evaluating when and how to electrify their fleets. If it were simply a matter of social responsibility, it would be an easy decision to make. But for most companies in this segment—especially small-to-medium enterprises (SMEs)—it’s also a matter of economic viability.
After all, fleet electrification requires significant investment in vehicles and charging infrastructure. How can an SME approach e-mobility in a way that maximizes the return on that investment (ROI)? Is saving on the cost of energy enough? Are there strategies business can take to increase those savings? And how can electrification open opportunities for new business models and revenue streams?
In this three-part series, I will begin to explore some of the answers to these questions and focus on the tangible solutions that can support SMEs in their electrification journey today.
ABB partnered with münchner taxi zentrum (mtz) in Germany to explore the opportunities around both energy savings and new commercial models. mtz is a taxi operator in the greater Munich municipal area, operating 10 fully electric Jaguar iPace vehicles in a fleet of 100 vehicles. They use five 50 kW DC fast charging stations to keep their EVs on the road. The insights gained from this study can be applied to a host of other SMEs that are seeking ways to maximize ROI as they electrify their fleets.
One of the key challenges for these companies is the inflexibility of their charging requirements. Since time spent charging is time spent not earning money, they schedule charging so that all vehicles can be on the road during peak demand times. Unfortunately, these peak charging times often coincide with the times when energy is most expensive.
The study found that investment in energy generation or storage capabilities may deliver incremental cost savings, but that alone does not deliver a compelling ROI for businesses of this size. Solutions that offer peak demand management (PDM) capabilities, however—especially digitally enabled solutions—may offer considerable value against the cost to implement them.
One effect of growing peaks in energy demand will be challenges to grid capacity, stability, and resilience. Independent distributed network operators (IDNOs) have an opportunity to mitigate this threat by investing in the peak management assets (such as energy storage) that businesses find uneconomical to invest in themselves.
SMEs can go beyond cost savings to revenue generation by capitalizing on their charging infrastructure. One way to do this is by selling spare capacity. With relatively inexpensive digital platforms, they can easily market and schedule parking and charging services to other businesses that operate EV fleets.
The opportunities that exist today will continue to evolve with the increasing penetration of distributed energy resources (DERs) in the grid and emergence of Energy-as-a-Service (EaaS) models. Increasing regulations for energy trading and data ownership will also have an impact. Businesses that are able to capitalize on these opportunities today will not only reap the economic rewards but will also play a significant part in guiding the evolution of energy policy in the electrification revolution.
In part two of this three-part series, I’ll take a closer look at the peak demand management systems that can help companies optimize their energy use. In the meantime feel free to read the full study.