Electric vehicles (“EVs”) are sure to replace conventional gas-powered vehicles over the next few decades. Several countries are looking to become carbon-neutral economies, and the transition to electric vehicles is bound to have a major effect on vehicular travel. Plenty of experts believe that electric commercial fleets will be a crucial component in the move toward electrification given that the enterprises behind fleets have the required budgets and stand to derive the most benefits.
Unlike petrol- and diesel-powered cars, EVs rely on rechargeable lithium-ion battery packs. The charging costs are a fraction of what it costs to refuel a fleet, and because they have significantly fewer moving parts, they cost less to repair and maintain. Electric vehicles produce minimal emissions as well, making them an important tool for municipalities and companies that want to cut down on their carbon emissions. A recent survey found that 90% of fleet managers see electrification as an “inevitable” outcome that will bring a wide variety of changes.
First is reduced operational and maintenance costs. Fleet managers will especially save on fuel, as fleets are known to require a high fuel budget. A study carried out in New York City found that maintaining EVs cost the city approximately one-half as much as it cost to maintain each fossil-fuel-powered car. Additionally, EVs depreciate much slower, and they often come with a variety of incentives and rebates to boost EV adoption. As such, fleet managers will save a significant amount in the long run, which will help offset the relatively high costs of purchasing an EV.
Since they run on batteries rather than an internal combustion engine, electric vehicles produce minimal to zero emissions. For municipalities and states that have to meet emissions standards, EVs will be integral to achieving this goal because fleets, such as Amazon’s massive fleet, are known to produce significant levels of carbon emissions.
However, electric vehicles are not all sunshine and rainbows; they are quite expensive and so is the cost of installing home chargers. While a reliable network of public charging stations would definitely be a plus, the best way to charge a fleet of EVs would be to install chargers at the fleet headquarters so vehicles could be charged overnight. On top of that, the local electricity grids will also require upgrades to be able to supply power to a fleet of electric cars.
Fleet managers who aren’t familiar with electric vehicles will also have to acquaint themselves with the EV supply chain, which is different from the petroleum supply chains they are most likely accustomed to. Managers will need a period of learning and adjustment. So while electrification will undoubtedly have plenty of benefits, it will require the cooperation of fleet managers, utility providers and policy makers.
Publicly traded companies such as Ideanomics Inc. (NASDAQ: IDEX) are also involved in facilitating the uptake of electric models of commercial vehicles in a variety of ways, including developing battery-charging solutions aimed at addressing the needs of fleets. These concerted efforts are likely to result in a relatively faster transition to electric mobility in this segment.
NOTE TO INVESTORS: The latest news and updates relating to Ideanomics Inc. (NASDAQ: IDEX) are available in the company’s newsroom at https://ibn.fm/IDEX
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