The future is electric

March 31, 2021

Earlier this year, auto industry giant, General Motors, announced plans to end production of all diesel and gasoline powered vehicles by 2035, and to become carbon-neutral by 2040. Competitor, Ford Motors, has said it will increase its investment in electric vehicles to $11 billion by 2022, and Volkswagen will spend $40 billion on EV development and autonomous driving by the end of next year. 

The people have spoken, and the industry is listening. Even a decade ago, we never would have imagined the seismic shift now taking place in a sector that has both shaped American life and held steady as a vital part of the US economy, employing 9.9 million people and contributing around 3.5% to national GDP.

Advances in technology are moving at an unprecedented pace. E-mobility has introduced a variety of new challenges, not only in terms of vehicle capabilities and engineering, but also in terms of the user experience and design. OEMs are investing heavily in this, as some consider it to be as important as vehicle technology. I have always been passionate about technology, so I’m excited about where the future will take us. In the fleet industry, we’ve started the conversation about electric vehicles and at LeasePlan, we’re already guiding numerous organizations as they build the fleets of tomorrow. Not everything has to happen at breakneck speed though, and we’re working with companies to help them incorporate EV technologies and add EVs to their fleets.

The EV landscape

It’s a connected world out there, in EV terms. EV industry leader, Tesla, has spent the past eight years building a network of nearly 8,000 superchargers (and a further 10,000 slow chargers) that span the country, allowing drivers to completely charge their cars in under an hour. Tesla’s competitive advantage is that its chargers are exclusive to its vehicles, and Tesla drivers can also use adapters to tap into the widespread network of generic public chargers now available.

ChargePoint and the Electrify America network have 1,400 and 1,660 fast charge points, respectively, and companies such as Enel-X, which has 7,000 JuiceBox charging stations around the country, have developed innovative programs that pay EV drivers to plug in. With almost 100,000 public charging connectors across North America, drivers do not have to go very far to access to a charge. Range anxiety among EV drivers is decreasing as we see increased cooperation between public and private entities, and the number of public charging facilities continues to grow.

How is the government promoting EVs?

The government is paying attention to the benefits of EVs, too. The US Department of Energy cited one of the advantages of adopting EVs as reducing our reliance on foreign petroleum, and its price spikes and supply disruptions, since almost all US electricity is produced via domestic sources.

Federal tax credits of up to $7,500 are offered to owners of EVs manufactured after 2010 and states have their own incentives related to alternative fuels and electric vehicles. California alone offers 150 different grants, rebates and incentives based on traditional auto alternatives.

Governments are also supporting the development of public charging infrastructure using a number of different approaches, including a tax credit of up to 30% for businesses installing charging stations. In January, President Biden pledged to replace the government’s 650,000-strong fleet with EVs and build 550,000 charging stations across the country.

Making the switch

Transforming your organization by adopting the newest technologies is a constant activity for successful companies. Transformation is a tool for identifying new growth opportunities or competitive advantages for your business and it’s not something that happens overnight. Incorporating electric vehicles into your fleet may seem like a daunting task, but depending on your organization’s level of preparedness, and the support you have from external partners such as fleet management organizations, it can be achieved successfully. You may even wish you’d done it sooner. 

Building a strategy for making the switch is critical to a smooth and efficient transition. Here are my top suggestions:

  • Take an accurate inventory of the vehicles you currently have and make an assessment of what your medium- to long-term needs will be. How many vehicles do you need to add or subtract? Are there any due to be retired, and could these be replaced by EVs?
  • Plan ahead. Once you’ve made the decision to go electric, you’ll need to make informed decisions about the make and model of EV that will suit your business needs best. Consider speaking with a fleet manager to understand whether you should be focused on cost, battery range, car size or other factors. Finally, your choices may be guided by model availability and your implementation timeline.
  • Financing must also be considered. How do you plan on funding your fleet? Does your budget allow for the purchase of new vehicles in the near term? Have you considered total cost of ownership (TCO) versus the cost of each vehicle? There are expenditures beyond the EV’s purchase price, and exploring the difference between EV TCO and that of a tradition vehicle is important.
  • Finally, what is your timeline? Do you have targets set for reducing corporate emissions? Will you need to consider installing charging facilities onsite? Will your desired EV makes and models be available as you need them? Ensure your transition to EV has a realistic timeline that has the buy-in of all stakeholders in your organization. It’s important to have goals that are centered on stability and sustainability for your business, whether that is financial, physical or environmental.

Ask your questions!

If your fleet is ready to go electric, but you’re looking for more guidance to get you started, I invite you to join me at LeasePlan USA’s Virtual EV Summit, on April 14 and 15. You can register here.

About the author:

As executive vice president of transformation at LeasePlan USA, Smolka is leading the strategy to drive modernization and innovation across the U.S. subsidiary and launch the company further into its journey to deliver what's next for fleet, mobility and connected vehicles. Smolka's career has consistently revolved around digital transformation, developing cutting-edge technologies and leveraging the power of big data to create and deliver value. With a strong history of successes, Smolka is a proven leader poised to transform the fleet industry.