1 Mar 22

North America fleets seen more environmentally sustainable in coming years

While sustainability for many means supporting long-term ecological balance by not harming the environment or depleting natural resources, this translates – for fleet managers - into utilizing more zero emission vehicles.

For more on what to expect in terms of fleet and mobility in 2022, including a list of some of the most sought after electric vehicles (EV) for the year, download Global Fleet's latest e-book on the matter.

Five of the seven steps to a sustainable fleet and mobility strategy (Global Fleet 2022 e-book)

•    Encourage employees to use video conferencing to avoid travel.
•    If travel is essential, instruct staff to choose transport with the lowest CO2 impact, such as trains.
•    Identify fleet vehicles with journey profiles within the range of EVs. 
•    Identify drivers with off-street parking at home, who can install a domestic charge point. 
•    Assess workplace car parks where EV charge points can be installed. 

Fleets are responsible for three greenhouse gases (GHG), being carbon dioxide (CO2), methane (CH4) and nitrous oxide (N20), harmful emissions which could be reduced with zero emission vehicles.

In North America, only a small percentage of the light passenger vehicles sold in the country fall under this category, or to say those which don’t have internal combustion engines (ICE). As the United States represents more than 90% of the fleet market in the region, this will be the focus below. Also note that alternative fuels such as hydrogen represent a mere fraction of the market so I will be adressing EVs. 

In 2021, approximately 9.75% of new vehicles sold in the US were electrified and if considering 100% battery-electric vehicles (BEV) alone, the share was 4%. While BEV sales increased 89% to 487,460 units, the sale of hybrids and plug-in hybrids (PHEV) increased 84% to 969,407 units.

Although these numbers do outperform EV sales in Latin America, they fall behind those seen in Europe and China. The transition to EVs, however, will pick up in the coming years considering the talks of both the public and private sector with California being the current pacesetter. 

California as a stand-alone market is the 10th largest car market worldwide and that is why EV subscription platform startup Autonomy is kicking off there, according to co-founder Georg Bauer (pictured left). 

“We are currently ordering 500 Tesla Model 3 cars and expect to have 10,000 EVs by year-end 2022,” Mr. Bauer told Global Fleet.

With that said, vehicle production without a doubt is key. However, two missing pieces to the EV transition puzzle are battery production and charging infrastructure.

Today, battery production mainly consists of the Gigafactory in Nevada operated by Tesla and Panasonic and Tesla’s new facility in Austin Texas. According to the US Department of Energy, at least 13 more battery factories are currently being built in the country, eight being joint ventures between automakers and battery manufacturers.

As for charging infrastructure, the US Department of Transportation and Energy - this year - earmarked $5 billion in investments over the next five years to build a national electric vehicle charging network along interstate highways and designated alternative fuel corridors. 

A second grant program (seen at $2.5bn) to further increase EV charging access will also be announced in late 2022. The investments are part of the National Electric Vehicle Infrastructure (NEVI) Formula Program under the federal government’s $1.75 trillion infrastructure law which includes boosting electrification infrastructure and clean energy projects.

President Biden has also announced plans to buy only 100% zero emission light duty vehicles for its fleet from 2027 on, and that all vehicle acquisitions will be emission-free models by 2035. Last year (2021), the federal government had approximately 650,000 cars and trucks of which less than 1% of them were electric.

Meanwhile, there has been a wave of multi-billion-dollar investment announcements for EVs from most of the leading automakers. 

While General Motors has announced US$25bn investments from 2020-2025, Ford Motor Company has recently announced $50bn from 2022-2026, and this does not include plans by companies such as Tesla, Hyundai, Toyota, Volkswagen, Stellantis, Mazda, Lucid, Nikola, Canoo, and a slew of smaller EV startups. 

“We are currently collaborating with companies like Amazon and Uber to offer fully electric commercial vehicles (LCV) for urban transport and logistics and distribution should start in late 2024” EV manufacturing startup Indigo Technologies Chief Strategy Officer Greg Tarr (pictured right) told Global Fleet.

Will all this activity in the market, US fleet managers can expect a wave of EV launches over the next few years, giving them more ways to help their companies reach their environmental sustainability targets. 

According to a report by Bank of America analysts, more than 85 new models are expected to be launched in model years 2022-2025 so fleet managers, keep your eyes open!

Authored by: Daniel Bland