May 10, 2022

Fleet Electrification – 10 Reasons to switch to EV Fleet

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Electric Vehicles (EV) have come of age in recent years. Almost every major car manufacturer in the world offers EVs in their lineup, with more models in the pipeline. An EV nowadays is as good or even better than internal combustion engine (ICE) vehicles. As consumer market adopts electric vehicles amid concerns over global warming & raising fuel cost, fleet operators may find migrating to an all-EV fleet a daunting exercise.

This article attempts to demystify EVs for fleet operators, and helps you make a sound & informed decision when the opportunity comes knocking.

This article is separated into 2 segments:

Electric Vehicles tracked by KATSANA EV Fleet Management System

The benefits of running a fleet of Electric Vehicles

1. EVs are much cheaper to run per km 🥳

The cost of refueling an ICE car, or charging an EV varies wildly from one country to another. Thus we make a chart to help you visualize how much cheaper it really is when running an EV compared to ICE, based on current fuel/electricity tariff published on the net.

Here are the assumptions used for the calculation:

  • Average distance per month: 1,800km (this is an average distance for a passenger vehicle in Malaysia)
  • EV used: Hyundai Ioniq 5 Max, 72kWh battery with 400km average distance
  • ICE used: Honda Civic VTEC 1.5 with fuel consumption at 8.5 liter per 100km (average for this model)
  • Fuel price (RON95) & Electric tariff date used – 10th May 2022 – based on publicly available information
  • USD to MYR at 4.40 – 10th May 2022
  • Malaysia RON95 per liter – RM2.05 (~USD1.76 per US Gallon) – 10th May 2022
  • Singapore RON95 per liter – SGD3.10 (~USD8.45 per US Gallon) – 10th May 2022
  • Indonesia RON95 per liter – IDR 17,280 (~USD4.50 per USD Gallon) – 10th May 2022

If you are in Malaysia, to drive 1800km, it will cost you:

  • ICE – Refuel cost per month: RM313.65 at RM2.05 per liter
  • EV – Electric tariff at RM0.218/kWh – Charging cost per month: RM70.632 (🟢 cheaper by 78%)
  • EV – Electric tariff at RM0.334/kWh – Charging cost per month: RM108.216 (🟢 cheaper by 66%)
  • EV – Electric tariff at RM0.516/kWh – Charging cost per month: RM167.184 (🟢 cheaper by 47%)
  • EV – Electric tariff at RM0.516/kWh – Charging cost per month: RM176.904 (🟢 cheaper by 44%)
  • EV – Electric tariff at RM0.571/kWh – Charging cost per month: RM185.004 (🟢 cheaper by 41%)

If you are in Singapore, to drive 1800km, it will cost you:

  • ICE – Refuel cost per month: SGD474.3 (RM1495) at SGD3.10 per liter
  • EV – Electric tariff at SGD0.2794/kWh – Charging cost per month: SGD90.53 (🟢 cheaper by 71%)

If you are in Indonesia, to drive 1800km, it will cost you:

  • ICE – Refuel cost per month: IDR2,643,840 (RM796) at IDR 17,280 per liter
  • EV – Electric tariff at IDR1,444.70/kWh – Charging cost per month: IDR468,082.8 (🟢 cheaper by 83%)

2. EVs are cheaper to service and maintain

This must come as a surprise to you. With all the gizmos embedded in an EV, how is running an EV cheaper that ICE vehicles?

Well the gizmos that you see in an EV are typically just electronics that require no service or maintenance. In an EV, you do not need to do scheduled maintenance as frequent as ICE vehicles. For example:

  • No engine oil or oil filter to be replaced every 10-15,000 kms
  • No transmission oil (ATF) or filter to be replaced every 45-80,000 kms
  • No coolant to be replaced every 75-100,000 kms
  • No spark plugs to be replaced every 100,000 kms
  • No fuel & water pump to be replaced every 100-150,000 kms
  • No timing belt to be replaced every 100-150,000 kms
  • Brake pads need to be replaced less often because EVs rely on regenerative-braking, so you will not need to brake as often as ICE vehicles

We are not implying that you do not need to service EVs at all. Compared to ICE vehicles, you will only service EVs at much, much lesser interval; and mostly involve changing of tires, aircond/cabin air filter or refilling the wiper fluid. 😎

For example, here is the suggested service interval for Porsche’s first EV, the Taycan.

For the recently launched Volvo XC40 Pure Electric, the official maintenance guide suggests:

  • Cleaning interior and exterior of the car
  • Changing wiper blade
  • and.. checking brake system.

Now if we refer to Hyundai Ioniq 5 service schedule, it mostly consist of:

  • Checking tire pressure
  • Inspecting brake pedal
  • Inspecting disc brakes and pads
  • Inspecting boots…

Whats noticeably absent is the need to replace costly engine oil, oil filter, transmission oil and numerous other wear & tear items commonly found on ICE vehicles.

Since scheduled maintenance for EV is minimal and simple, your vehicles are significantly more productive. You will recoup so much time previously lost when dealing with service centers and workshops.

3. EVs are inherently safer to drive

Numerous factors contribute to an overall safer EV compared to ICE vehicles.

Placement of EV batteries – low center of gravity

In EVs, a significant weight of the car is due to heavy batteries powering the motors. These power packs are typically installed at the strongest location in the car chassis which is under the floor underneath passenger seats.

This gives EVs a significant advantage over ICE vehicles, which is a very low center of gravity which improves the overall stability of the vehicle.

This low center of gravity makes it almost impossible to topple an EV, as seen in this video:

Smart, high-spun electric motors improve handling and traction

The added weight of the battery also helps with traction of all the tires, allowing better contact with the tarmac.

Moreover, having electric motors that can spin in split seconds allow smart onboard computers to vary the amount of torque delivered to each wheels. This feature keeps the car controllable under snowy conditions, heavy rains or any skid-prone events.

Generally smarter technologies to keep you safe

EVs are generally built from ground-up using the latest automotive technologies and modern safety standards. Apart from the large screen on the dashboard, behind it are a plethora of assistive features to keep watch of the car and your safety at all times. Most EVs come with some level of autonomous driving that makes quick decisions based on surrounding risks such as pedestrians or incoming vehicles.

For example:

  • On Tesla, there is a ‘Sentry’ mode that captures video surrounding the car at all times. It will record and notify you if it detects any sudden movement, vibration or impacts to the car. The video can be viewed in real-time on your phone, and can be used as a legal evidence in any untoward incidents. 👻

4. EVs are quieter (better NVH – Noise, Vibration & Harshness)

When it comes to NVH characteristics between an EV and ICE, the difference is night and day.

Since an EV relies entirely on electrons (electricity) to spin its motors, there are no noise emitted to move the car. An ICE vehicle require combustion of fuel (tiny explosions) inside the engine to drive piston that moves the crankshaft to spin the wheels. In ICE vehicles, you are essentially driving mini, self-contained explosions which emit noise, and pollute the environment at the same time.

In some cases, the EV can be so quiet that car manufacturers add faux-engine noise to give context to the driver (different sound when speeding, accelerating or braking).

5. EVs are more responsive and fun to drive

Thanks to its electric motors that can generate maximum torque instantly, EVs are much more responsive and fun to drive than a conventional ICE vehicle.

To make a point, in the ICE world, accelerating from 0km/h to 100km/h (0-60 miles/h) in less than 5 seconds are considered fast and mostly reserved to the higher end models such as sports cars and supercars.

In an EV world, getting a 0-100km/h in less than 5 seconds is pretty much commonplace due to the instant delivery of power to the electric motor. 🤩

6. EVs emits ZERO carbon and up to 40% less carbon emission to operate

One popular myth circulating around is EVs emit more carbon than ICE vehicles due to battery manufacturing.

This is only true if we look at just one part of the entire car lifecycle because yes, additional energy is required to manufacture EV batteries. However, over the lifetime of the vehicle, total greenhouse gas (GHG) emission associated with manufacturing, charging, and driving an EV are lower than total GHG associated with ICE vehicles. 

This is because EVs emit ZERO tailpipe emissions since… well, it has no tailpipe 😉

Referring to the chart by the US EPA (Environmental Protection Agency), we can see that EVs generally reduce up to 40% greenhouse gas compared to an ICE vehicle. This calculation already include vehicle manufacturing (e.g. extracting materials, manufacturing & assembling parts, and vehicle assembly) and end-of-life (recycling or disposal). The orange bar include both tailpipe emissions and upstream emissions due to production of carbon fuel or electric.

The caveats to watch out for fleet operators

While things do look bright, there are also caveats when it comes to migrating to a fleet of EV vehicles.

1. Higher upfront cost to acquire

Most notably, EVs in general are priced higher to conventional vehicles.

Typically we are seeing a price difference of between 20-50% more expensive that a non-EV counterpart.

On top of that, EVs are mostly introduced as a premium model/variant that commands higher price.

2. Invest to set up on-site charging infrastructure

Its near painless to own a single EV and charge it at home/your office, using existing power infrastructure.

Things get complicated when you run a fleet of EVs. Now you need to plan on several fronts:

  • Do you have sufficient charging ports/outlets/parking bays to charge the vehicles?
  • Do you need to plan charging time/slots?
  • How do you inform your drivers that its time to charge or to stop charging?
  • Does existing power infrastructure in your office able to deliver sufficient power to the chargers?
  • If the electricity tariff differs by hour (peak vs offpeak), how do you plan to charge at the cheapest hour?
  • Do simple wallchargers at 11kWh sufficient for overnight charging, or do you need High Performance Chargers (HPC) installed?
  • What is the maximum power the EVs can pull from the chargers?

👉🏼 You will need a proven EV Fleet Management platform that integrates tightly into daily operation to make the best in running a fleet of EVs.

3. Battery longevity remains a concern (update: not!)

People tend to associate EV batteries to behave the same as regular smartphone batteries.

The immediate correlation is, smartphone batteries will see reduced capacity after 3-4 years of use, sometimes up to 30-40% of its original factory capacity.

  • Will EVs face the same problem?
  • Do we need to change EV battery (which is a substantial cost in itself) that frequently?
  • Can I still use the car after 8-9 years? Will it last that long?
  • Is it a smart decision buying second-had EVs?

All these concerns are valid, although the severity might be overblown. Refer to the image below:

In recent data released by Tesla based on real life use of EVs, we can see that its battery still retains 90% of its capacity after 200,000 miles (320,000 km). For a passenger car, this is roughly 15 years of driving a distance of 2000km a month.

4. Uncertainty of vehicle resale value

Even though battery technology has vastly improved (and we are still seeing 10+ year old EVs on the street), skepticism on the longevity of EV battery lingers.

As 50% of all EVs sold globally are sold in the last 18 months, we are still unsure on the resale value of EVs.

For conventional fleet vehicles, the second hand value is almost fixed in stone, allowing fleet managers and procurement managers to plan vehicle ownership lifecycle to align with financial goals.

With EVs, that remains to be seen.

5. Aftersales service & repair

As EVs are more technologically inclined and do not rely on mechanical components to run (such pistons, cylinder head, valves etc), it require a different kind of mechanics to work on it. In fact, the term ‘mechanics’ might no longer be relevant as the role of the new EV technicians would be akin to an electrician or an engineer.

That brings us to a point where existing car dealerships and workshops are likely under-prepared, under-trained, and lacks the tools required to diagnose and repair EVs.

Solving this would require a completely new training program and upskilling of existing mechanics to understand the intricacies of electronics in the EVs.

We would foresee that instead of replacing individual items on a board, EV technicians will be trained to replace the entire component in a plug and play manner. While the component might be fixable with a simple chip/capacitor replacement, in the interest of time (and cost to the service provider), it is preferable to swap the entire defective component instead of digging deeper to replace a capacitor worth RM0.50 (USD0.10).

This leads to a number of concerns for early adopters of EVs:

  • It will take a while for the vehicle to be diagnosed and fixed
  • Early repairs will be mostly trial and errors as technicians gain more experience to repair
  • Small problems such as leaking capacitor can be very expensive to repair if the whole component is to be replaced

However to end this on a good note, most new EVs come with 6-8 years warranty on the battery and the car itself with some offering additional paid coverage. 😍

Written by Fuqaha, CEO of KATSANA Holdings. Connect with me on LinkedIn.