I remember being at a convention back in 2016, when, to much fanfare, a significant European manufacturer unveiled its new electric vehicle.
By the time the convention finished, however, the vehicle was practically redundant due to the tech advancements that had subsequently occurred.
Seven years ago, EV technology was moving so quickly that new advancements soon became yesterday’s news.
That steep development curve is common in most new technology, and at some point the curve plateaus.
Technology will still continue to develop and evolve, but at a significantly reduced pace. Reaching that plateau triggers large-scale adoption – and, from a commercial vehicle perspective, that’s where we’re now at with EVs.
That’s why it’s imperative companies take time to understand the impact the transition to EVs will have on their business, and how they will navigate this transition.
Because it will have a major impact, and it’ll come much sooner than many people realise. Some think the EV transition is 20-30 years away.
No, think more like five to 15 years. In the not-too-distant future, you’ll be unable to purchase petrol or diesel-fuelled vehicles.
Regardless of what’s happening here, the European, Chinese and US markets dictate our vehicle supply, and they’re not going to continue manufacturing petrol and diesel vehicles just for us.
The move to alternate-powered vehicles is coming – quickly – and those businesses that are ready to adopt the new technology will be in a far better position than those that aren’t. The EV challenges that businesses need to consider To transition successfully, businesses will need to have a strategy and processes in place to manage the risks that will consequently present themselves.
A consideration is how the cost and depreciation of vehicles is viewed. New business models will be needed, as the cost of electric and hydrogen-powered trucks will be significantly greater than current petrol and diesel counterparts.
Of course, grants are currently available and carbon credits can be accumulated. But that cost outlay will need to be factored into the long-term financial strategy, and how that return on investment is modelled will need to change. Other factors will need to be brought into the ROI process rather than the direct and obvious.
Some costs may be offset by customers. For example, in the short- to medium-term, customers may be willing to pay a premium to have their deliveries made by an electric vehicle. But other returns will need to be identified and quantified.
Having a consistent and reliable stream of power to charge EVs is another challenge. Is the infrastructure that’s currently in place suitable to charge the number of vehicles you need now and into the future?
Recently, I worked with a company that spent $250,000 to get new transformers in the street to satisfy demand. Without it, they wouldn’t have been able to power their fleet.
Driver education holds the key to adoption The experience of driving an EV is different, and how you transition drivers will determine how well new vehicles are adopted. I know of two fleet businesses that began using electric vehicles – exactly the same models – with very different results.
The first company undertook a thorough training and education program with their drivers; the second practically handed over the keys and that was it. While the first company enjoyed a very successful transition, the second company had a group of dissatisfied drivers to placate.
Training is important, because driving an electric vehicle is different. Range anxiety is real, and regenerative braking and eco-safe driving techniques are key to maximising range.
Regenerative braking, however, mostly happens when the foot is off the accelerator and not on the brake — and for drivers who are used to driving foot-to-brake it will mean a change in driving style.
Those drivers who’ve been managed well, and have been part of a structured change management program, tend to prefer EVs. They are less fatigued and it’s a smoother ride — once you know how to drive them. There are also practical risks to consider. What happens if someone trips over a charging cable? What eventuates if an employee is charging their work vehicle at home and there’s a fire?
These are just examples of the considerations that together, over the coming years, we need to understand and make provision for. The transition to EVs is going to be a logistical and financial challenge. It’s new, it’s different, and it’s not simple or easy.
However, the biggest risk for businesses regarding EVs is to sit there and do nothing. Currently, the EV uptake is voluntary, but this will not always be the case. In the near future you’ll be forced to take action.
Those businesses that have taken the time to map out their EV strategy, adapt to the challenges and maximise the opportunities, will be the businesses that have a far greater chance of success.
Starting your EV transition journey Of course, knowing where to start is sometimes the biggest hurdle. The business I work for, Zurich Resilience Solutions (ZRS), a business unit of Zurich Insurance, offers resilient risk engineering services that support businesses in this transition to electric vehicles.
The early identification of risks and understanding your business’s resilience to this changing environment is vital and the quality and respected risk engineering services are paramount.
We work with businesses to review all processes and procedures, including procurement, driver training and awareness, maintenance, charging infrastructure and placement, through ‘whole of life’ ownership to disposal.
Once those risks are identified and mapped, we offer not only pragmatic risk improvement actions, but also assist you to achieve your resilience goals.
If you’d like to speak to the team at ZRS to help you plan your business’s transition to electric vehicles, email resilience.solutions@zurich.com.au.
About the Author
Fran De Sanary is a Senior Risk Engineer and Sustainable Mobility Consultant with Zurich Resilience Solutions (ZRS). He has been involved in the Heavy Vehicle and Transport industry for over 40 years, including many years working as a Group Fleet and Risk Manager. At ZRS, Fran provides practical and cost-effective risk management solutions for Fleet, Process, and Transport businesses that maximise asset protection whilst minimising financial risk.