Electric fleets: a commercial challenge

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By: Jonathan Shine, Evida Power, Friday, July 29, 2011, AutomotiveWorld.com

Whilst the electric passenger car market is enjoying a period of exciting developments, the commercial electric vehicle (EV) segment lags far behind and remains in its infancy. There is a strong desire on the part of businesses to move to greener forms of mobility, and the need is very apparent. A shift to EVs not only enhances a company’s image and demonstrates its corporate and social responsibility towards the environment, but also puts it ahead of its competitors when bidding for important contracts.

There are also other undisputed advantages of moving away from fossil fuels. These include widespread government incentives, cost-effective vehicle maintenance (as there are fewer moving parts to maintain compared to a combustion engine), and, of course, the fuel costs of an electric vehicle are a fraction of the cost of diesel. Electric fleet vehicles are also able to operate without any noise or pollution disturbance in built-up urban areas, which in many instances would otherwise have restricted vehicle operation, thereby potentially enhancing profitability.

There is a strong desire on the part of businesses to move to greener forms of mobility, and the need is very apparent.

Despite the strong demand from fleet operators, such as logistics providers and local government authorities, the lack of availability of affordable models for this market is partly to blame for the delay in the growth of the zero-emission commercial vehicle sector. The EVs on sale today are expensive because they originate from conventional diesel road-going models (i.e. they have been retrofitted), and are built in very low volumes, meaning EV makers cannot benefit from economies of scale. Furthermore, they are often powered by costly battery packs, which are the consequence of expensive and lengthy research and development (R&D) programmes.

There is no single solution that will speed up the rate at which commercial EVs are adopted, but three factors will play a key role in allowing this segment of the motoring industry to begin to mature: the scope of future government incentives (which are currently heavily focused on passenger cars), affordable technologies and holistic solutions that support operational integrity and capex limitations. Businesses will equally have to change their approach by taking a “whole-life” vehicle view, as financial savings will be returned over the long term, rather than at the point of purchase.

There is no single solution that will speed up the rate at which commercial EVs are adopted, but three factors will play a key role in allowing this segment of the motoring industry to begin to mature.

Competitively-priced models, which give organisations a strong economic case to make the switch from diesel, will also emanate from an industry-wide solution through the collaboration of several technology providers like Evida, rather than being the result of one isolated cost-cutting innovation.

To realistically achieve this commercially viable alternative, the vehicles need to cost fleet customers at least 30% less than the price they are being asked to pay today. This can be achieved through being designed from the ground up as an EV, without the requirement for retrofitting, and through being built in larger volumes with more affordable battery packs, to be able to offer both attractive and significant cost reductions at source and on sale. More importantly, future zero-emission commercial models have to provide users with a high level of quality, proof of service and reliability.

The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.

Jonathan Shine is the Co-Founder and Vice President of Business Development at Evida Power Ltd.

Evida Power Ltd is a leading supplier of lithium-ion power systems, with operations in the USA, China, Israel, and the UK. The business prides itself on providing individually tailored solutions, built upon proven lithium-iron phosphate (LiFePO4) chemistry technology, and works with an array of clients, spanning from EV manufacturers to some of the world’s leading zero-emission projects. For more information about Evida Power, go to:http://www.evida.com/ or email info@evida.com

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