EV tipping point: When should Australian companies decarbonise their fleets?

They are quieter, cheaper to run and help organisations meet their decarbonisation efforts, so what will it take for more companies to electrify their fleets?

The switchover to electric vehicles (EVs) in Australia has been slow to date. They currently make up 0.78 per cent of all new vehicle sales in Australia, well behind the UK at 10.7 per cent and the world leader Norway at 74 per cent. There are several factors behind this slower pace and a few reasons to think it’s about to pick up speed.

Sean Stove is the Transport Sector Manager at ABB in Australia. He believes that businesses are now stepping up to electrify their fleet and move to more sustainable forms of transportation.

“As far as transport operations go, we’re already seeing many organisations starting to switch their fleets over. New fleets are bringing new localised manufacturing opportunities to the market, and the operating costs and overall ownership of the vehicles make financial sense,” he says.

ABB is a leading global tech company that develops and provides software, electrification, robotics, automation and motion services. It regularly produces whitepapers, blogs and guides about e-mobility that analyse everything from how EV fleets can be a grid management resource to EV charging and electromagnetic compatibility. If you’re interested, you can sign up to the free newsletter here. 

This article is an example of the newsletter’s insights, and outlines the factors driving Australian fleet decarbonisation. It looks at the current policy environment, cost and range concerns, and tips for companies interested in making the switch to EVs.

The EV policy environment

While several European countries, China, North America, India and Japan, have all offered a range of incentives to encourage their markets to make the switch to electric vehicles, Australia is yet to develop a national approach. 

In its 2021 State of EVs, industry body Australia’s Electric Vehicle Council found that “Australia still has serious challenges when it comes to electric vehicle market share, policies, and consumer choice”. It gave the Federal Government a three out of ten score in the report’s electric vehicle policy scorecard.

However, this doesn’t mean the policy environment for EVs is wholly negative. The states and territories have taken the lead in making EVs more attractive to both businesses and consumers.

Earlier this year, NSW outlined a comprehensive plan for EVs that includes rebates, stamp duty exemptions, fleet benefits and a charging network. Meanwhile, Victoria became the first state to introduce a financial rebate for EV purchases, offering 4,000 subsidies valued at $3,000 in the initial release (20,000 are expected). 

All the other states and territories have specific incentive programs, detailed plans for their EV future or both. In the State of EVs report, every state and territory scored at least six, and NSW topped the scores at nine. 

Total cost

Electric vehicles do have a higher initial cost, but they are already proven to have significantly lower operating costs and a lower cost of ownership. In the US, McKinsey calculated that fleet EVs can achieve a total cost of ownership that is 15 to 25 percent less than equivalent internal combustion engine vehicles.

Range and charging infrastructure

One of the most discussed concerns that companies have is the total distance EVs can travel on one full charge, the time it takes to charge, and how these compare to traditional vehicles.

Currently there are more than 3,000 public chargers in Australia, and they’re being installed at an increasing rate. According to the State of EVs report, in the last 12 months there has been an increase of 24 per cent in DC fast or ultra-fast chargers, and an increase of 23 per cent for standard chargers. Nationwide there are 7.21 electric vehicles for every charger.

Battery and charging technology is improving all of the time, but for companies that don’t conduct travel between urban centres, range is often already a manageable concern. For commercial EVs available in Australia, a range of 200 km and over has become typical, according to the State of EVs report. 

In fact, some companies are finding ways to solve the challenges of range and infrastructure themselves, either by setting up their own charging infrastructure or looking for a technical solution. 

One of the benefits of using your own charging infrastructure is to keep charging costs low by using off-peak periods or to use stored solar or other renewable energy. 

At least one company is already trialling trucks with swappable batteries for use on routes between Brisbane and Sydney to help prevent unnecessary delays. 

How to prepare for the switchover

For any business considering switching over to a fleet of EVs, Stove says the following points should be front of mind.

• Choose for interoperability When deciding on what type of charging technology to use, try and make sure it can be used with any type of vehicle. You won’t want to spend a significant amount of money upgrading your infrastructure before you have to.
  
  
• Understand your energy network load and usage Understand what you can currently charge, and the load management required for adding fleet vehicles in. You can develop a plan to optimise this with localised energy management, storage and energy from renewable sources. Plan ahead for the electrical load that you’ll need for the next five to ten years.
  
  
• Consider the digital journey of your wider business
  As your business becomes increasingly more digital, there are more opportunities to connect parts together seamlessly. Integrating billing, charging optimisation and resource allocation can help you manage usage and operations in a simple way. Consider the other parts of the business that could benefit being connected to your fleet.

By planning through the considerations above, fleet operators can set up the timing to work for them. The team at ABB has significant experience in setting up EV operations with various businesses around Australia and the world and can help any organisation through its planning and implementation phases.

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