As the price of fuel heads north of $2 a litre, more businesses are considering the use of electric vehicles as a viable alternative — and Australia's previously slow adoption is changing, raising further considerations for directors.
Providing the infrastructure
NRMA member research shows that — after the purchase price — accessibility to public charging infrastructure is the biggest barrier to adopting EVs. “The major piece of infrastructure required is a connected national EV charging network,” says NRMA’s CEO of membership and motoring, Emma Harrington MAICD. “This is a significant investment requiring government support because Australia is a large country with a small population — which makes connection difficult. We also need to invest in the electricity grid to support EV charging, and that needs to be in place before electric vehicles arrive in volume.”
Rather than waiting for a federal policy, some states have been going it alone. The result has been fragmented outcomes, strategies and targets.
“The private sector has also stepped in,” says DeKalb. “We’ve seen growth in this space with companies such as JET Charge, which supplies and installs EV charging infrastructure. Traditional fuel providers are talking about replacing forecourt petrol bowsers with chargers, and retail energy providers are also making plans to support EVs.”
As a result, range is becoming less of an issue. “The larger batteries used in cars now may only need to be charged once a week,” says DeKalb. “When you look at combining workplace charging with what’s already available across the public network, it’s really not the problem some people think, particularly for urban travel.”
However, the lengthy charging time required for heavy vehicles has been a serious obstacle for trucking companies. To overcome this, Australian EV manufacturer Janus Electric is trialling an exchangeable battery system that allows batteries to be swapped in three minutes. In a media release, general manager Lex Forsyth said that, depending on what a prime mover is towing, this will provide a range of 500–600km for a single trailer or 400– 500km for a B-double.
For some, the batteries themselves are a concern — both in terms of reliability and disposal. “Most EV makers offer a separate, longer warranty on the high-voltage battery pack,” says Harrington. “This provides more certainty around battery life as it typically covers eight years, about 160,000km, of driving and also battery capacity if it falls below 70 per cent of the original.”
It also seems unlikely that many old lead acid batteries will end up in landfill. “There are businesses focused on recycling and repurposing batteries when they come to end of their life,” says Harrington. “Up to 97 per cent of a battery is recyclable and, while this is currently a small market, it will continue to grow.”
There’s no single correct approach to transitioning to an electric fleet. “Early on, organisations need a clear picture of how the vehicles in the fleet will be used, where they will be charged and how the fleet will be managed,” says Harrington. “This will dictate where the company needs to provide charging, which could be at a depot, the office, at home or on the move.”
DeKalb advises companies to take their research down to the micro level of the individual car, individual driver and individual driving patterns. “It’s also important to understand that you don’t necessarily need to transition every vehicle to an EV in order to meet your decarbonisation goals,” he says. “You could start the process with hybrids, for example, and invest in driver education to reduce wasteful behaviours such as idling time.”
Boards could also consider different types of fit- for-purpose vehicles, such as electric bikes, cargo bikes, trolleys and drones. A delivery company, for example, could make substantial savings by using micromobility options for the last stage of the journey. The Future of Delivery Report, commissioned by Uber and released in March, found that in urban areas, more than half the cost of a delivery is incurred in the last 1.6km.
“For many organisations, the best way to develop a strategy is by setting up a cross- functional team,” says DeKalb. “The fleet manager will look at it purely from the vehicle point of view so you also need input from HR on change management, finance on total cost of ownership and IT to connect smart charging that supports data aggregation. I’ve seen the transition work best when the team also includes someone responsible for sustainability who is mandated to reduce carbon across the entire organisation.”
However, there will inevitably be roadblocks along the way. “That’s why it’s vital the person accountable for the project is determined to make it work,” says Jafari. “Many companies have made a strong commitment to achieving zero emissions by 2025–30. If you receive a report that this isn’t achievable for your organisation, someone has made a mistake.”
Harrington is confident that the business case for adopting EVs will continue to strengthen. “In the long run, EVs will be more affordable to run and maintain,” she says. “They will also help reduce Australia’s emissions, improve public health and air quality, help to address fuel security concerns and provide Australia with economic opportunities.”
Let’s hope we aren’t too far behind the rest of the world in reaping the benefits.
Top EV sales 2021
Tesla Model 3: 12,094 (almost 60% of sales)
MG ZS EV: 1388
Mitsubishi Outlander PHEV: 592
291 Public fast-charging locations in Australia, with 700 more planned over the next five years
Many fleet managers approach LBM Fleet Solutions with two apparently opposing goals. Often, they’ve been asked to cut the cost of the fleet at the same time as they transition to low-emission — and often more expensive — vehicles.
“Companies are always looking for ways to save money,” says CEO Gerard McLennan MAICD. “At the same time, boards are pushing for zero emissions, and fleets contribute a lot to the overall carbon footprint.”
As a cloud-based software company, LBM takes an all- inclusive approach to efficient fleet management.
“We aggregate data from a wide range of sources such as revenue, enterprise resource planning, fuel and operating costs as well as the plug and play hardware we fit into fleet vehicles,” says McLennan. “We then run analytics over the data to optimise the client’s decision- making process.”
The data can point to the best solution for each situation — electric vehicles (EVs), hydrogen-powered or hybrid. It can also highlight any opportunities for reducing the number of vehicles.
“We aim to achieve around 90 per cent efficiency across the fleet,” says McLennan. “As long as you have enough to meet your requirements, getting higher usage from the assets can fund more expensive vehicles. This way, companies can achieve what they’re hoping for — which is lower emissions and lower costs.”
Some companies mentioned in this feature may have advertised in Company Director, but have had no involvement in determining editorial content.
Already a member?
Login to view this content