Fleet electrification key to decarbonising road transport in Europe

17 June 2021 Consultancy.eu 4 min. read
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Electrifying fleets – particularly company cars, last-mile delivery vehicles, sales vehicles and shared cars – could be a big step towards the much-coveted decarbonisation of Europe’s road travel segment. A new report from EY and Eurelectric presents the details.

Road transport is an epicentre for the European decarbonisation agenda. The segment is a chief polluter in several European cities, and currently accounts for a quarter of all greenhouse gas emissions on the continent. 

According to EY analysis, a 64% cut in road transport emissions is needed to reach the EU’s 2030 climate targets, while at least 30% needs to be shaved off to comply with specific CO2 emission goals. And this is despite broad-based electrification efforts, with key markets such as the UK, France and several others looking to phase out the internal combustion engine by the end of this decade.

Road transport emissions need 64% cut to meet EU 2030 climate targetsEY and industry body Eurelectric spoke to more than 20 leaders and experts in the electrification ecosystem for ideas on how this agenda can be accelerated. Amid general optimism around the progress so far, many highlighted the myriad barriers that remain to scaled electrification – most notably production limitations, lack of standardisation and infrastructure inadequacy.

On solutions, a central theme emerging from the research is a focus on fleets – defined by the researchers as mass-purchased company vehicles deployed towards a commercial purpose such as transport or delivery. Per the experts, electrifying fleets could bring Europe’s road transport sector to a critical mass of electric vehicles (EVs) – and set the ball rolling on decarbonisation.

The fleet opportunity

Several factors are at play in putting fleet in focus – as explained by EY’s global power and utilities leader Serge Colle. One is the emission load: “fleet accounts for 20% of total vehicles in Europe but travels disproportionately more kilometres and emits disproportionally more carbon dioxide.”

Strong market and operational conditions for fleet electrification

“Then there are characteristics unique to fleets – predictability of journeys, the constancy of daily kilometres travelled, fixed destinations and stopovers – which make it easy to incorporate charging into the working day.” 

“Cost is persuasive too. The total cost of ownership for EVs is fast reaching par with ICE vehicles. Incentives and grants bridge the upfront cost gap. Reduced servicing, maintenance and fuel costs mean EVs are cheaper to run. Together, these factors make the case for electrifying fleets first.” 

Not to say that electrifying fleets is an easy task. On the contrary, the report highlights the complexity of driving such a transition – which requires buy-in from a multitude of stakeholders. Every fleet is different, and the continent-wide electrification drive will likely require a step-by-step approach. 

Road ahead to fleet electrification

Step one is to gauge the market: explore costs, infrastructure, vehicle types and business models. Next is to make the right choice of vehicle, launch the fleet, and prepare a business case to disrupt current operating models. Step three involves keeping a close eye on progress through key performance indicators – across business and sustainability – using data analytics and other digital tools. 

Then comes the continent-wide scaling up process – which requires a secure supply of energy, low-cost production and a better driver experience to push widespread adoption. In short, the fleet electrification process extends to customer campaigns and heavy investments in technology, infrastructure and renewable energy

All for a worthy cause – fleet electrification “will create value and give life to a new ecosystem of interconnected businesses that will come together and collaborate to resource emerging needs,” concluded Eurelectric secretary general Kristian Ruby.