special report

Top EV sales 2021

Tesla Model 3: 12,094 (almost 60% of sales)

MG ZS EV: 1388

Mitsubishi Outlander PHEV: 592

291 Public fast-charging locations in Australia, with 700 more planned over the next five years

Source: Electric Vehicle Council

Data-driven decision-making

Many fleet managers approach LBM Fleet Solutions with two apparently opposing goals. Often, they’ve been asked to cut the cost of the fleet at the same time as they transition to low-emission — and often more expensive — vehicles.

“Companies are always looking for ways to save money,” says CEO Gerard McLennan MAICD. “At the same time, boards are pushing for zero emissions, and fleets contribute a lot to the overall carbon footprint.”

As a cloud-based software company, LBM takes an all- inclusive approach to efficient fleet management.

“We aggregate data from a wide range of sources such as revenue, enterprise resource planning, fuel and operating costs as well as the plug and play hardware we fit into fleet vehicles,” says McLennan. “We then run analytics over the data to optimise the client’s decision- making process.”

The data can point to the best solution for each situation — electric vehicles (EVs), hydrogen-powered or hybrid. It can also highlight any opportunities for reducing the number of vehicles.

“We aim to achieve around 90 per cent efficiency across the fleet,” says McLennan. “As long as you have enough to meet your requirements, getting higher usage from the assets can fund more expensive vehicles. This way, companies can achieve what they’re hoping for — which is lower emissions and lower costs.”

Some companies mentioned in this feature may have advertised in Company Director, but have had no involvement in determining editorial content.

In Norway, nearly 84 per cent of new cars sold in January were electric vehicles (EVs). In Australia, the equivalent figure was 0.8 per cent. “Australia is lagging behind the rest of the world, with sales of just two per cent over the past year,” says Behyad Jafari, CEO of the Electric Vehicle Council. “That compares with 15–20 per cent in other developed economies and nine per cent on a global scale.”

Yet, low as they are, these figures represent relatively good news. The 20,665 EVs sold in 2021 constituted a significant leap from the 6900 or so sold the previous year, and the two per cent is up from 0.78 per cent in 2020. There are also some organisations forging ahead with the adoption of low-emission vehicles. In Victoria’s City of Casey, for example, 65 per cent of the council’s pool vehicles are already electric or hybrid — including its rubbish trucks.

“We currently have 13 electric cars, 15 hybrid cars and two hybrid trucks, with a further three hybrid trucks on order,” says Casey’s manager of city presentation, David Richardson. “Our waste contractor also has three electric trucks. The transformation will continue as old vehicles are replaced — and council is investigating the upgrading of power supply and charging infrastructure at our sites to ensure there is capacity to recharge the future fleet.”

In his work with the Electric Vehicle Council, Jafari once had to pester directors to get a hearing. Now they’re pestering him for information. “Most directors understand that a global transition to low- or zero-emission vehicles is underway and there’s no going back,” he says. “Apart from potential material benefits for the organisation, reputations are at risk. Customers, employees, shareholders and investors are increasingly interested in how companies are managing ESG — both how they’re performing now and their plans for the future. There’s still a window of opportunity for companies to be recognised as leaders in this area, but it’s closing fast. Soon we’ll see those that fail to act being punished.”

Too few vehicles

Australia isn’t out of step with the rest of the world through lack of interest. One of the main barriers to purchase is that there are no EVs to buy. Strong consumer demand has seen some popular models selling their full annual allocation within hours of being made available for purchase, according to a recent Electric Vehicle Council statement. The Guardian reported that 18,000 Australians had registered their interest in Hyundai electric SUVs when 109 arrived. They sold out in six and a half minutes. “This is largely because manufacturers have little incentive to send their vehicles here,” says Jafari. “Australia and Russia are the only two countries in the developed world without fuel- efficiency standards or emissions penalties in place. As a result, we’ve become a global dumping ground for more profitable, high-exhaust vehicles that other countries don’t want to buy. We need policies at a national level to put that right.”

Cost of ownership

When EVs are available, some companies have a problem with the price. However, prices are continuing to fall to the point where, in Europe, some cost less than the petrol or diesel-fuelled versions. And, as the NRMA reports, running costs, including energy and maintenance, are materially lower than for equivalent vehicles with an internal combustion engine.

“Companies need to consider the total cost of ownership rather than just looking at the ticket price,” says Lincoln DeKalb, product development manager (future mobility) at SG Fleet. “This is likely to happen more now as people are confronted by rising fuel prices and start to think more broadly about self-sufficiency and fuel security. Moving to a fully electrified fleet could reduce their dependence on international oil supplies and fluctuations in market prices.”

Some state governments are planning to tax EV drivers to counteract a reduction in government fuel excise revenue. However, an EY report for the Electric Vehicle Council found that replacing internal combustion engine (ICE) vehicles with EVs would have overall revenue benefits for government as well as cost benefits for government and society.

“As well as contributing to climate change, vehicles powered by petrol or diesel emit air pollutants such as carbon monoxide, nitrogen oxides and volatile organic compounds that can have a detrimental effect on air quality and human health,” says Jafari. “The report estimated that 80 per cent of the health costs associated with air pollution from ICE vehicles are incurred by government or via health insurance.”

In South Australia, an electric vehicles road usage tax was passed into law in October last year. The plan was that, from July 2027, EV drivers would pay about 2.5 cents for every kilometre they drove. However, newly elected Labor premier Peter Malinauskas is keeping his pre-election promise to repeal the tax. “We want to encourage South Australians to buy an electric vehicle and hitting them with this tax will have the opposite effect,” he said in his policy document.

Providing the infrastructure

NRMA member research shows that — after the purchase price — accessibility to public charging infrastructure is the biggest barrier to adopting EVs. “The major piece of infrastructure required is a connected national EV charging network,” says NRMA’s CEO of membership and motoring, Emma Harrington MAICD. “This is a significant investment requiring government support because Australia is a large country with a small population — which makes connection difficult. We also need to invest in the electricity grid to support EV charging, and that needs to be in place before electric vehicles arrive in volume.”

Rather than waiting for a federal policy, some states have been going it alone. The result has been fragmented outcomes, strategies and targets.

“The private sector has also stepped in,” says DeKalb. “We’ve seen growth in this space with companies such as JET Charge, which supplies and installs EV charging infrastructure. Traditional fuel providers are talking about replacing forecourt petrol bowsers with chargers, and retail energy providers are also making plans to support EVs.”

As a result, range is becoming less of an issue. “The larger batteries used in cars now may only need to be charged once a week,” says DeKalb. “When you look at combining workplace charging with what’s already available across the public network, it’s really not the problem some people think, particularly for urban travel.”

However, the lengthy charging time required for heavy vehicles has been a serious obstacle for trucking companies. To overcome this, Australian EV manufacturer Janus Electric is trialling an exchangeable battery system that allows batteries to be swapped in three minutes. In a media release, general manager Lex Forsyth said that, depending on what a prime mover is towing, this will provide a range of 500–600km for a single trailer or 400– 500km for a B-double.

For some, the batteries themselves are a concern — both in terms of reliability and disposal. “Most EV makers offer a separate, longer warranty on the high-voltage battery pack,” says Harrington. “This provides more certainty around battery life as it typically covers eight years, about 160,000km, of driving and also battery capacity if it falls below 70 per cent of the original.”

It also seems unlikely that many old lead acid batteries will end up in landfill. “There are businesses focused on recycling and repurposing batteries when they come to end of their life,” says Harrington. “Up to 97 per cent of a battery is recyclable and, while this is currently a small market, it will continue to grow.”

special report graph

Tailored strategy

There’s no single correct approach to transitioning to an electric fleet. “Early on, organisations need a clear picture of how the vehicles in the fleet will be used, where they will be charged and how the fleet will be managed,” says Harrington. “This will dictate where the company needs to provide charging, which could be at a depot, the office, at home or on the move.”

DeKalb advises companies to take their research down to the micro level of the individual car, individual driver and individual driving patterns. “It’s also important to understand that you don’t necessarily need to transition every vehicle to an EV in order to meet your decarbonisation goals,” he says. “You could start the process with hybrids, for example, and invest in driver education to reduce wasteful behaviours such as idling time.”

Boards could also consider different types of fit- for-purpose vehicles, such as electric bikes, cargo bikes, trolleys and drones. A delivery company, for example, could make substantial savings by using micromobility options for the last stage of the journey. The Future of Delivery Report, commissioned by Uber and released in March, found that in urban areas, more than half the cost of a delivery is incurred in the last 1.6km.

“For many organisations, the best way to develop a strategy is by setting up a cross- functional team,” says DeKalb. “The fleet manager will look at it purely from the vehicle point of view so you also need input from HR on change management, finance on total cost of ownership and IT to connect smart charging that supports data aggregation. I’ve seen the transition work best when the team also includes someone responsible for sustainability who is mandated to reduce carbon across the entire organisation.”

However, there will inevitably be roadblocks along the way. “That’s why it’s vital the person accountable for the project is determined to make it work,” says Jafari. “Many companies have made a strong commitment to achieving zero emissions by 2025–30. If you receive a report that this isn’t achievable for your organisation, someone has made a mistake.”

Harrington is confident that the business case for adopting EVs will continue to strengthen. “In the long run, EVs will be more affordable to run and maintain,” she says. “They will also help reduce Australia’s emissions, improve public health and air quality, help to address fuel security concerns and provide Australia with economic opportunities.”

Let’s hope we aren’t too far behind the rest of the world in reaping the benefits.