EV Ver 2.0

In our last EV installment, we briefly covered preconceived notions, false assumptions, current marketing trends and even touched on a little automotive history which is involved in this topic. The EV topic is expansive, and because of that I mentioned the last time around that I wanted to do an installment about charging. Charging, more than anything, tends to separate the EV-Fleet deployment pacesetters from the wanna-be’s. So at the risk of plowing the same ground as last time, let’s review to illustrate the impact of charging (or lack of it) in private usage, before we tangle with fleet.

As you may recall there was a big uptick in EV sales right after the onset of the pandemic. Various EV’s (passenger cars, SUVs and fancy pickups) appeared on the market in quantity, and there were buyers for all of these vehicles. Now that COVID has receded, that same market appears to have gone soft (except for the recent uptick as the recent tax-credit was sunsetting). This is notable as scribes and manufacturers were forecasting almost exponential growth in this sector, so what gives? I’ve not yet applied for my $180,000 federal grant to do a case study on this, but I pretty much believe I can reconstruct the how’s and why’s of this phenomenon or at least form a rational hypothesis.

Market surge: Simply, when in-office reporting was virtually eliminated in many sectors (COVID era), the work that went home typically required only internet, a cell phone and a laptop. These types of jobs tended towards administrative, financial and tech sectors, often upper-middle income vocations offering more discretionary cash than service-sector jobs can provide (those folks were still reporting to work, by the way). These newly home-based workers took inventory of their environmental ethos and started reconciling their actions with their desires. Voila! EV’s started flying off the shelves! Those buyers saw little downside. They could afford the purchase and they could charge the cars in their own garage. If they were apartment or townhome dwellers, they had commercial chargers available around their complex (or at least available at their grocery store parking-lot). Either solution could readily keep up with the 80-150 mi/week they drove during this time – mostly recreational nights-out or chasing household sundries.

Market retreat: And now much of the workforce has been re-mobilized due to the return of brick-and-mortar reporting mandates. So, the EV’s that were bought during the pandemic, which proved fine for running errands or chasing down groceries, were suddenly needed for extensive daily commutes. Those same vehicles started burning through more kWH than modest home chargers could reasonably keep up with, and commercial chargers are/were rarely available within walking distance of work, let alone at work. If they were available, they were most likely only 9.6 kWH level 2 chargers, or the same as typical home-charger capability. Mileage demand on an EV started to outstrip the ability to keep it charged, so conventional or hybrid vehicles started being purchased again for the daily grind. After all, you can still buy gas anywhere. (I’ll have a link at the end of the article to a Go-Fund-Me page to recover that $180K grant I missed out on!)   

So, limited charging infrastructure remains the bane of personal EV adoption and deployment, as it has for well over 100 years now. What are the solutions for the retail market? I’m not sure; there seem to be more companies getting into pay-to-play charging all the time, but those projects are very expensive and scattered. Generally, these companies seek commercial load partners as well as private users to secure a reasonable ROI. Even with that, charger location becomes a developer’s crapshoot because vehicles (and often business client parking locations) are portable, while chargers are not. A developer choosing the wrong location or wrong timing could build an installation providing no revenue and perhaps even endure a forced career change as a result. So, unless efforts are really (really) made to install reasonable chargers when housing is developed, we seem to be at somewhat a fiscal impasse.  

Lack of charging limits commercial EV adoption as well, but for wholly different reasons. Naturally, the more EVs you deploy, the heavier the electrical demand. Let’s choose a vehicle, say a basic EV-crossover with an 86kWH battery. A higher-end level 2 charger (19.2 kWh) will charge our fully depleted hypothetical vehicle in about 4.5(ish) hours and would consume about 92kW to do so (or a 20.5 kWH load). So, charging 10 of these EV’s would consume electricity at a rate of approximately 205 kWH. For perspective, please keep in mind this same electrical consumption could power 7-average middle-class houses for one day, so that 205kWh is not exactly inconsequential.

Also realize that in the Fleet-world a group of 10 units is particularly small. Most operations I’ve been involved in over the years have had 50 or more (to several hundred) units reporting to the same location. Charging 100 similar EV’s on those same chargers would consume electricity at a rate of 2,050 kWH.

Now consider your building(s). My current office is in an old mid-1950’s manufacturing plant converted into a service center. The building is not small; it alone occupies 5.8 acres (along with additional surface parking and several other buildings on a 54-acre campus). Decades ago, huge electrical capacity wasn’t generally needed in commercial or manufacturing facilities (maybe in a steel-mill with electrical furnaces or some such), so it typically wasn’t included in building design. As such the electrical service to run this old building has a primary transformer rated at 2,500 kVA, but to support only the 100-vehicle load discussed above would draw 2,220(ish) kVA by itself. In effect, to have capacity to operate those 100-EVs and the building would require refitting the entire facility electrical system, more than doubling the existing electrical service to support the load.  Also remember; we are only discussing passenger EVs here, not larger commercial trucks with 360-420 kWH batteries.

You could say that all the vehicles would never require a charge at the same time. Likely true, but “would happen” and “could happen” are two different things, and electrical code stresses sizing infrastructure for “could happen”. So, to guarantee reduced load, you would have no choice but to limit the number of available chargers or install chargers with a lower charge-rate capability. Your operations may or may not be able to accommodate the logistics of swapping vehicles on and off a charger between shifts, or a 9+ Hr. charge time. But even if that were feasible, the solution is less than ideal.

So, where does this argument go? I neither categorically endorse nor renounce EV’s in commercial applications. I just caution anyone considering fleet electrification to be aware of what they are asking of the technology.  As mentioned in my prior article, EVs (particularly passenger vehicles) can work pretty darn well in the proper application. My own issued work vehicle is an EV, and it does everything I need. But also, we installed 4-80 amp level-2 chargers to charge our divisional case-study EVs. These chargers required installing an additional 100kVA 480V/3-phase step-down transformer, as we didn’t have sufficient capacity on any available single-phase panel to run these chargers. The cost involved in just that meager electrical project was significantly more than the purchase price of any of our divisional EV’s, and none of those were particularly inexpensive.

If you wanna’ play, you gotta’ pay.

Why are EV’s so polarizing? (Pun intended)

EV proponents point to zero tailpipe emissions, ever-increasing range capability, reduced lifecycle carbon production, reduced operating costs and a pathway to a zero fossil fuel future. EV detractors point to lack of available charging, extended “fill” times, limited range/range anxiety and dirty mining and power generation. Both are correct, so let’s lift the hood on this topic and poke around.

As fleet operators we owe our organizations every due diligence in evaluating new technologies, sorting through their capabilities and trying to visualize a possible fit in our operations. EV’s are getting more capable all the time but are not currently a one-size-fits-all solution. EV’s do some things very well; they have lower routine maintenance requirements, snappy acceleration (outright fast in some cases!), quiet operation and easy depot charging logistics (if you can support the chargers; a topic for another article). The operator can just hook them up to “fuel” at end of their shift, walk away and they’re charged by tomorrow AM. But the limited portfolio of available EV’s still makes the technology a tough fit in many commercial applications.

Product & Service Availability

One of the preemptive criteria of conscientious fleet procurement is that you must be able to support whatever you buy. This means if you buy an EV, you need to buy a product that has an established national sales and service network; or if you run a regional fleet, at least an EV which has good dealership saturation in your local market. This narrows down your available products dramatically and produces mostly passenger vehicles and light trucks. Not that EV’s aren’t being developed in specialty-equipment and limited big-truck sectors, but those efforts are currently just that: specialty and limited.  

And why is this? Automotive manufacturing is not an altruistic pursuit. While boardroom leadership can choose to support ideology over profit-margins (I said, “can”, not “does”), the reality of the situation is that manufacturers must be able to forecast enough market to develop the product, then have it generate enough revenue to pay for development and production costs while still showing earnings. That modeling currently pivots around high-end sedans, SUV’s and (what I would call) Sunday-go-to-meetin’ trucks. The reason is simple; the retail market tends to adopt new technology sooner and buy higher-level trim packages more quickly than the work market does, and it is easier to hide the EV upcharge in a more optioned vehicle. 

Purchasing Considerations

Understand, it is not that fleets are backward-thinking or technology adverse but having financial restrictions can have huge impact on procurement decisions. Let’s say you need to buy 100 half-ton trucks and the EV equivalent costs $15K more per unit/purchase that the ICE unit; that amounts to an effective $1.5M increase across that purchase. That additional $1.5M could have bought a whole lot of additional conventional vehicles (30-35 more when considering a basic fleet pickup).

Workforce perception impacts best intent too. Everyone wants the latest and greatest, so if you have 500 of a certain vehicle type and you re-spec that category, you either replace them all at once or manage expectations. I recall back when A/C was still an option checkbox in order guides (yes, A/C was once an actual option!), an option which my company at that time didn’t typically buy. But when my management made the decision to put A/C into our new service trucks we were only on the second annual purchase of a new truck model. Consequently, we were asked to refit A/C into the 35 units from the prior purchase (for continuity). Fortunately, the workforce gave us grace to defer the rest until scheduled unit replacement. They’d seen us actively changing equipment after a long hiatus and trusted us to do more. 

Operating expenses:

No one should deny that “fueling” a passenger EV costs less per mile than fueling a similar conventional vehicle (at least when charging with off-peak electrical rates). There are also economies to be found in preventative maintenance. Gone are the traditional PMs (Lube/Oil/Filters), emissions inspections and daily fluids checks. However routine systems (brakes, tires, steering, etc) must still be checked routinely. In fact, the price and frequency of brake and tire replacement will go up; the components are larger, more expensive and replaced more frequently due to vehicle weight.

I would consider this a financial wash but then consider the inevitable collision repairs. Currently any collision repair on an EV carries a significant premium (time and money) over a similar ICE vehicle; even worse if the damage gets into the HV electrical-drive system. Don’t believe me? Call State Farm, Shelter, Nationwide, or any other insurer and price EV insurance (if they still even offer it!). Better yet, talk to any of the private owners who’ve recently had their EV insurance cancelled without cause. Insurers are now distancing themselves from EV’s due to inversion of their profit/loss ratio by paying higher EV repair rates. 

Environmental impact:

One of the more touted arguments against EV’s is that dirty (carbon intensive) lithium production processes and power generation will offset any carbon reduction the EV may produce. Well? Sort of. EV’s do offer operational carbon reduction over ICE vehicles (even when charging in coal-country), but they also create more carbon in manufacturing processes as well. In effect, this defers any overall carbon reduction until later in lifecycle  and forces the fleet operator to view it as environmental depreciation.

Let’s say that your inventory only averages 5K miles per unit/per year and you’re replacing inventory every 5 years (to maximize resale value). Don’t be bragging at the local bar that your company’s EVs are reducing global carbon footprint over an ICE solution, because they’re not. It would take more than 25K/mi total service-life before reduced operating carbon offset the additional manufacturing carbon.

But if your inventory averages 15K miles per unit/per year and you rotate inventory every 7 years, you will indeed reduce your corporate carbon footprint over the unit’s life.

Remember, all else being equal battery size regulates the carbon produced in lithium-cell manufacturing. Mining and manufacturing keep getting cleaner, but it is still a “dirty” process. Depending on which source you cite, you will see a mileage accrual of 40-60K miles as the reasonable EV carbon-output tip-over point (assuming a standard 60-86 kWh battery vehicle). Your mileage may vary. 

Market acceptance:

Remember, in the early 1900’s EV’s were already a big thing in the automotive world (read up on Electrobat, Riker and Electric Vehicle Company, for just a few). ICE powered vehicles only started to own the market as they became cheaper, engines became more dependable, ran longer distances and were easier to fuel. EV’s were all but dead by the mid 1910’s due to higher cost, limited range and poor charging infrastructure. Ironic that those same issues plague the same technology 110 years later. 

Synopsis:

EV’s can offer significant advantages if you respect and work within their limitations. But as things stand today, EV’s are only a partial solution to the bigger problem; decarbonization of all transportation and manufacturing. Likely (as history has often proven) no single technology will prove itself a complete solution, but we will end up with a potpourri of different ideas as the fossil-fuel market declines. Those technologies will see categorical winners and losers eventually, but the votes will be cast with wallets, not at ballot boxes. 

Stay tuned! I need to jump into my Bolt EV for a meeting across town. …Hope I remembered to plug it in to charge last night…