Corporate Fleets: An Unlikely Engine for EV Sales

Peter Fairley finds corporate fleets technology 'laggards' and not likely to adopt electric vehicles to their operations.

Published: 20-Jan-2011

Despite the high levels of excitement surrounding electric vehicles, there is reason to worry about this nascent market's capacity to fizzle in a big way. Most of the buzz surrounds electric vehicle introductions from major automakers, such as the Nissan Leaf and the Chevy Volt, for which consumer demand remains to be demonstrated. Today I've got a piece running at MIT's site raising doubts about the likelihood that corporate fleets will soak up EVs if consumers leave these pricey machines languishing on showroom floors.

The TechReview story, a 'news-you-can-use' piece aimed at managers, concludes that big price reductions and adjustments to fleet management practices will be needed to make a business case for replacing gasoline and diesel fleet vehicles with EVs. In short, lithium battery costs push the purchase price too high for most corporate buyers to recoup their investment through efficiencies -- especially if they continue to replace vehicles every three-to-five years. AT&T predicts a return on electric Ford/Azure Dynamics service trucks they are phasing in, but only because the company bucks standard fleet practice and uses its fleet vehicles for 10-12 years.

Fact is that corporate fleets are technology laggards, just beginning to absorb the hybrid-electric vehicles that consumers got excited about back in the 20th Century. Hybrids are considerably cheaper per mile of operation than EVs and therefore likely to boom in fleets before EVs, according to Oliver Hazimeh, director of the automotive practice for Boston-based consultancy PRTM. "We see more hybrids coming online first and then, providing there are incentives, by 2015 it makes sense to switch over to electrics," predicts Hazimeh.


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