Comment: The role of procurement in the shift towards electric vehicles
As Britain transitions to a cleaner low-carbon future, Barney Goffer, UK product manager at Teletrac Navman, discusses what the Government’s plans mean in the context of the procurement process.
The impact of Covid-19 has shaken our society to the core over the past 12 months. However, the threat posed by global warming has not gone away. The UK Government’s focus on global climate change remains high on the agenda and in the race to clean up motoring, the Prime Minister has brought forward the end of the sale of new petrol and diesel cars and vans to 2030, together with a less stringent date of 2035 for new hybrids. Next year will also see London’s ultra-low emissions zone expanded from its current limit, with similar schemes mooted for additional cities across the UK.
What’s clear is the electric age is undoubtedly picking up pace, and 2030 will come around quickly for those with large fleets of traditionally fuelled cars and vans. Nevertheless, change takes time, so those procuring new vehicles will need to act now and devise a new, long-term strategy to support the transition to electric vehicles and ensure they have the infrastructure required.
Vehicle procurement can be a complicated and lengthy process at the best of times. Adding the challenges and complexities of EV adoption – such as a lack of charging infrastructure, vehicle pricing and range anxiety – and the process becomes even more difficult to navigate. What’s more, despite all the regulations, incentive schemes and growing media attention around the future ban, not all operators will necessarily be in a position to make the switch come this deadline.
It’s no surprise then that purchase decision-makers will be asking themselves how to determine the viability of switching to EV – what vehicles, what routes; how they should re-model their OPEX plans; and who to partner with or learn from, in order to prepare for the transition.
When it comes to partners to help make the switch, decision-makers should look outside of their immediate industry – such as technology and energy infrastructure providers – to help them understand the requirements needed to begin the changeover. It’s important to build as much knowledge on how the industry is changing and how the best suppliers in market can support them in the short and long term; then build their procurement plan with that timeline in mind. Additionally, a great example of someone already doing it well is Dundee City Council, which operates one of the UK’s largest public sector fleets of clean vehicles and regularly shares how it’s made electric mobility a reality for the residents of its region, with its pioneering initiatives to encourage the uptake.
When looking into viability and opex modelling, telematics plays a vital role. Moreover, when coupled with artificial intelligence (AI), telematics can help procurement and other stakeholders assess EV feasibility by turning data into decisions. This is done by looking at everything from the average number of trips overall and per vehicle, the distance, regularity, usage times, usage patterns, and time spent moving versus idle. In addition, these AI-powered algorithms can also analyse the data to help determine how many chargers to install; what type of chargers are necessary, and where they should be located.
There’s even the opportunity through AI to calculate the total cost of ownership of an EV switch versus the existing fleet (purchase price, residual value, taxes, insurance, maintenance, electricity costs), as well as the total CO2 and fuel savings the operator would make. In creating an evaluation based on existing data, purchase decision-makers will be able to get a strong sense of the opportunity and what’s necessary to make it happen. But this isn’t something operators need to do just once – data analysis is valuable every quarter as the industry and fleet requirements evolve.
This is especially true in the EV market, where change is going to be exponential – we are literally just at the cusp of the boom. These best practice approaches will enable decision makers to choose the right EVs for today, understand where to focus in future and phase a gradual transition – which is more manageable and less costly.