Interviews
24 aoû 22

Hari Nayar, Merchants Fleet: Knowledge is power in EV adoption

Following the signing of the $433 billion Inflation Reduction Act (IRA) by US President Joe Biden this month, many fleet managers throughout the country are pondering whether it is time to electrify their fleet or not.

In this brief interview, Hari Nayar - VP of Fleet Electrification & Sustainability for US-based fleet management company Merchants Fleet - sheds light on the tax credits and government incentives for domestic automobile production and charging infrastructure laid out in the IRA.

Do you feel that the US government is moving in the right direction in terms of giving companies the appropriate incentives and tools to make sustainable decisions?

Nayar: Yes, the new Inflation Reduction Act includes several provisions that extend and improve incentives for companies and consumers who want to reduce their emissions by adopting electric vehicles (EV).

For example, Section 45W provides a new incentive for commercial vehicles with tax credits of up to $40,000 for medium and heavy-duty EVs, whereas the prior incentives were primarily focused on passenger cars. This is a great opportunity for Merchants Fleet clients who are eager to make the transition to EV and rely on us to provide them with the right EV vehicle options for their businesses.


Ford E-Transit line are among the models eligible for tax credits (courtesy of Ford)

Additionally, section 30D originally excluded OEM's after they sold 200,000 vehicles, essentially eliminating Tesla and GM out of the tax credit game. But now section 30D has been revised to promote more domestic production capabilities, by incentivizing US and North American-based manufacturers and battery companies, including Tesla and GM.

Section 30C of the Act also expands and extends incentives for installation of charging infrastructure, with focus on property in economically disadvantaged areas, allowing Merchants to continue our mission of providing more sustainable fleet solutions for our clients throughout North America.

These provisions don’t expire until 2032, which gives businesses time to develop and implement their EV adoption plans, beyond just the next election cycle. Altogether, these provisions align with Merchants’ long-term view of electrification, by giving the industry time to evolve and invest in domestic solutions for sourcing and recycling.

What is needed to help fleet and mobility managers feel more confident in their transition to EVs?

Nayar: Knowledge is power and that is certainly the case when it comes to EVs. The more knowledgeable fleet and mobility managers are about EVs, the more confident they will be with making the transition. Starting with a feasibility assessment can help managers evaluate several factors that will reveal if their fleet is ready for EV transition sooner or further out.

For example, if sustainability is a core value for fleet operations, that may impact when and how one transitions to EVs, compared to if cost savings was the primary goal. Like any other strategic change, transitioning to EVs comes with its challenges. One of these is gaining buy-in from stakeholders, both in the C-suite and in the field.

Sharing information about technologies on the market, infrastructure advances, and projected cost savings can help highlight the benefits of embracing EVs. This can help build momentum and interest. Conducting a small-scale pilot is another way to offer an unintimidating, low-risk opportunity to test EVs and track results before scaling up.

The key to a smooth transition to electric vehicles is upfront planning and a clear analysis of current and projected operational needs, taking into account each stage of the vehicle lifecycle – from acquisition to disposition – and having the right services in place to support operations at each stage.

As the EV integration plan is developed, it is important to work with an experienced partner like Merchants Fleet, for all of the operational aspects such as funding and leasing, upfit and engineering, service support and infrastructure for both home and work charging.

Are EVs the only answer?

Nayar: Of all the options currently available for reducing emissions, EVs are the quickest and simplest route for many of our clients.

No two fleets are exactly the same, and Merchants works with each client to create customized solutions that fit each unique use case, and most of our clients find they can considerably reduce their emissions by switching even a portion of their fleet to EVs.

With provisions from the new Inflation Reduction Act that now include medium and heavy-duty vehicles as well as charging infrastructure, EV adoption is becoming even easier and more affordable for our clients of all sizes.

 

To get an idea of which EV models qualify for tax credits, visit here. And to get a snapshot of the major global car manufaacturers and their main strategies, downlaod the Global Fleet E-Book entitled Car Manufacturers'Global Fleet Strategy

  

Authored by: Daniel Bland
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