UPS/GreenBiz Study Identifies Motivators And Barriers To Electric Fleets
October 11 2018 - 9:00AM
- Fleet owners are drawn to sustainability benefits and
lower ownership costs
- Infrastructure and vehicle availability remain
challenges
Attaining environmental benefits and lower cost of ownership are
driving more commercial fleets to electrify, according to a UPS
(NYSE: UPS) and GreenBiz study released today. In the “Curve Ahead:
The Future of Fleet Electrification” report, industry leaders
identify the main motivations and barriers to electrification, as
well as strategies to move the commercial electric vehicle market
from niche to mainstream.
The top motivation to go electric for 83 percent of large
businesses surveyed is sustainability and environmental goals. A
lower total cost of ownership – factoring in both direct and
indirect costs and savings over the life of the vehicle – is the
second biggest driver, cited by 64 percent of respondents. In
addition to the fuel savings, electric vehicles (EVs) typically
require less maintenance than traditional internal combustion
engine vehicles, which means lower maintenance costs.
Despite an appetite for electrification, many fleet operators
face challenges. Fifty-five percent of respondents cited the
initial purchase price of electric commercial vehicles as the top
barrier. Forty-four percent view inadequate onsite charging
infrastructure as a barrier and 92 percent advise their facility is
not “very well equipped” to accommodate commercial charging needs.
Yet the study also found less than half of the companies surveyed
are working with governments or utilities to address charging
infrastructure.
“The challenges of cost and infrastructure requirements can be
daunting, but we’ve begun to see solutions emerge,” said Scott
Phillippi, UPS senior director of automotive maintenance and
engineering. “In the U.S., we recently ordered 50 electric-powered
delivery trucks that we anticipate will be at cost parity with
conventional diesel-powered vehicles. And in London, we were able
to find a solution for our charging needs through a collaboration
between government and private organizations. The business case,
combined with growing preference for EVs from cities and national
governments, will help us to reach a tipping point to large-scale
EV fleet adoption.”
Fleet managers and industry experts interviewed suggested
strategies to overcome such challenges, including starting small.
Instead of undertaking a large-scale fleet overhaul, many companies
will prioritize electric options when replacing vehicles and even
consider electric leasing options to mitigate the initial purchase
price. Converting from internal combustion engines to electric
depends on specific vehicle uses, the size and distribution of
fleets across regions, the costs of electricity and access to
charging infrastructure.
“Despite the complexity of transitioning commercial fleets to an
electric future, the vehicle technologies and options to upgrade
infrastructure are quickly improving,” said Paul Carp, GreenBiz
Group’s director of research and senior analyst. “Continued
industry collaboration will be critical to accelerate fleet
electrification across a wide range of use cases.”
As the market for electric commercial vehicles matures, 70
percent of companies report working closely with vehicle
manufacturers and suppliers to identify the latest electric vehicle
technologies and features. This communication is important given 32
percent of survey respondents cited inadequate product availability
as a barrier. UPS is working with commercial vehicle manufacturers
such as ARRIVAL, Tesla, Thor Trucks and Workhorse, providing data
and performance feedback to help foster product availability and
create fleet solutions that fit its unique needs.
UPS also works with manufacturers, governments and utilities to
leverage innovative technology, such as smart grid charging in
London that enables the company’s electric-vehicle fleet to charge
without an expensive power supply grid update. The project, made
possible by engaging UK Power Networks, Cross River Partnership and
UK’s Office for Low Emissions Vehicles, is an example of how
collaboration can overcome vehicle electrification barriers.
The research findings will be explored in depth at the GreenBiz
VERGE conference in Oakland, California on Oct. 16. To download the
white paper, visit ups.com/sustainability.
The 2018 UPS and GreenBiz “Curve Ahead: The Future of Fleet
Electrification” study presents the findings of qualitative
research, along with an online survey conducted by GreenBiz Group
in June 2018 among more than 200 respondents within the GreenBiz
Intelligence Panel.
UPS has a long history with electric vehicles, having first
introduced them into its U.S. fleet in the 1930s. UPS now has more
than 1,000 electric and hybrid electric vehicles deployed
worldwide. The company’s fleet of approximately 9,300 alternative
fuel and advanced technology vehicles now drives more than 1
million miles each day.
Since 2008, the company has invested over $1 billion in
alternative fuel and advanced technology vehicles and
infrastructure. This strategic investment redirects a purchase that
would normally support the acquisition of a diesel or gas-powered
vehicle to an alternative fuel vehicle. In fact, UPS has committed
that by 2020, 25 percent of annual vehicle purchases will be
alternative fuel or advanced technology vehicles. This shift toward
alternative fuel vehicles and the infrastructure that supports them
has helped UPS to drive the electric vehicle market to cost parity
with conventional fuel vehicles, while also realizing both fuel and
maintenance cost
savings.
About UPS
UPS (NYSE: UPS) is a global leader in logistics, offering a
broad range of solutions including transporting packages and
freight; facilitating international trade, and deploying advanced
technology to more efficiently manage the world of business. UPS is
committed to operating more sustainably – for customers, the
environment and the communities we serve around the world. Learn
more about our efforts at ups.com/sustainability. Headquartered in
Atlanta, UPS serves more than 220 countries and territories
worldwide. The company can be found on the web at ups.com and its
corporate blog can be found at longitudes.ups.com. Our new
sustainability eNewsletter, UPS Horizons, can be found at
ups.com/sustainabilitynewsletter. To get UPS news direct, follow
@UPS_News on Twitter.
Kristen Petrella
404-828-4182
kpetrella@ups.com
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