Three factors driving down costs for EV fleets
With more fleets seeing the benefits beyond sustainability, it’s clear electrification is the way forward. However, accepting the business case for EVs doesn’t mean the transition will be free of trade-offs. But rather than reach for point-by-point comparisons with ICE vehicles, forward-thinking fleets are reviewing the full cost of owning and operating EVs.
With this holistic approach, EVs become more economical. Unfortunately, projected long-term savings haven’t always been enough to counter higher sticker prices for EVs, plus additional infrastructure, utility service, and fluctuating electricity costs.
Recent developments are pushing us toward a tipping point. Newly passed legislation is narrowing the price gap between EVs and conventional cars. Meanwhile, EV solution providers are helping fleets simplify charging, repairs, and even supplier negotiations.
Still, every fleet faces unique circumstances. Here are the three key variables to consider when making your own calculations:
Lower energy costs by de-risking charging
Many fleet managers start by sourcing EVs, only to realize that their facilities aren’t equipped for charging at scale. Installing charging infrastructure can be a time-intensive, multi-stakeholder process, including selecting the site, choosing charging equipment for compatibility, and working with the utility to assess energy capacity.
There are risks even after chargers are up and running. A major concern is demand charges, or higher electricity tariffs that result from charging during peak consumption hours. These charges are not insubstantial; a 2017 Rocky Mountain Institute study showed that they could account for over 90% of a charging station’s electricity costs. Previously, managing these costs meant manually plugging cars in and out at the right time — a tricky feat for even the smallest fleets.
Now, new technology and services can de-risk this process end-to-end. For example, bp pulse’s Charging-as-a-Service bundles site design, infrastructure deployment, software, and maintenance support at a fixed rate, reducing upfront expenditures. To manage electricity costs, Omega charge management software automates charging for lower rates and dynamically responds to a fleet’s evolving needs each shift.
These solutions are proven to lower costs; for example, our collaboration with Red Hook Terminals resulted in an 84% reduction in fuel costs in just the first quarter of operations.
New legislation bridges the EV price gap
The higher purchase price for EVs has long been a barrier to widespread fleet adoption. Now, legislation like the Inflation Reduction Act (IRA) in the U.S. is making EVs price competitive from the very start.
Under the IRA, businesses that purchase EVs are eligible for tax incentives up to $40,000, based on vehicle weight class. They may also be eligible for a 30% tax credit on the cost of their charging equipment, depending on the location of the business.
Local and state-level programs can reduce costs even further. In California, Low Carbon Fuel Standard credit programs provide credits to organizations that use lower-emissions fuels, which are then purchased by emitters. By leveraging Omega’s data analytics and reporting features, your fleet can actually create new revenue streams from decarbonization.
Fewer repair bills mean a lower cost of ownership
Maintenance is a major cost consideration for fleets, but EVs can lower those bills. Since they contain fewer moving parts to repair or replace, EVs enjoy longer lifespans with reduced depreciation and downtime. However, these benefits are only accessible if chargers are running smoothly, too.
Yet few fleets have the in-house software expertise to keep complex charging technology operating continuously at peak performance. That’s why digital solutions and partnerships are critical.
bp pulse’s Elevate, a charger maintenance service, enables quick problem resolution by monitoring chargers around the clock and automatically issuing alerts when systems are down. Elevate goes beyond standard maintenance programs by assuming full responsibility for charging infrastructure readiness, so your team can focus on their core functions rather than troubleshooting charger operations.
Simplifying and streamlining the transition
Thanks to better technology, expanded service offerings, and new policies, EVs are starting to win on their own merit. Many of these solutions are also charger and vehicle agnostic, giving fleet managers the confidence to pursue EV adoption even as their needs evolve. With an electrified mobility future quickly coming into view, the road to tomorrow’s innovation starts by taking the long view of sustainable fleet operations today.
*An edit was made to this article to remove the mention of NEVI funding as it relates only to public and on-the-go charging infrastructure.
