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State Of The (Commercial EV) Union

Alf is CEO at Ideanomics with more than 25 years of experience in taking companies through aggressive growth. Learn more about Ideanomics.

Over the last four years, I have immersed myself in the electric vehicle (EV) industry, and it has been exciting to witness the determination toward advancements in zero-emission mobility. It has been increasingly fascinating to play an influencing role in what I believe are some of the most critical advances in the commercial EV sector to date.

The EV industry is rapidly maturing in the passenger car market, and it’s not just the pure-play EV manufacturers anymore. Traditional automotive players such as Ford, GM, KIA and more have vehicles in the market that are equal to, or better than the build quality of their internal combustion engine cousins. Similarly, in autosport, Formula-E has adopted the many traits of its Formula-1 older cousin providing the thrill of high-performance racing without the love-it-or-hate-it, deafening sound of motor racing.

Even the two-wheeler electric market is in a similar position to passenger cars, with everything from pay-as-you-go electric scooters zipping around our cities to e-bikes, mopeds and low-power motorbikes used increasingly for urban local delivery. And we can’t forget about high-performance motorbikes that can satisfy both the commuter and riding enthusiasts.

So, what of commercial vehicles? Shouldn’t all mobility be equal in a world with a rapidly maturing consumer sector of EVs? If so, why are things seemingly slower in the commercial space? Indeed, all that talk of instant torque in EVs should have made commercial EV adoption a home run, shouldn’t it? When explaining this to inquisitive minds from outside of automotive, I lean into parallels from the world of athletics. There are primarily fun runners, sprinters and middle-distance runners in the consumer EV segment, whereas, in the commercial EV segment, there are powerlifters, triathletes and marathon runners, for example.

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The commercial EV sector comprises two main categories: transit—movement of people—and transportation—movement of goods. With that comes a wide range of vehicle weight and function classifications, such as operational uses, drayage, cartage, short- and middle-mile freight, long-haul freight, last-mile freight and specialty vehicles. Outside of transit, which has led the way in commercial EV, specialist converters and upfitters have brought the first commercial EV vehicles to market for early adopters. The success of early adoption pilots provided data, use-cases and results proving the operational efficiencies EVs deliver across the transit and transportation value chain. We are finally seeing commercial original equipment manufacturers come to market with the offerings their larger commercial audience is craving.

Understanding The Cost Of Ownership

When it comes to commercial vehicles, the cost of ownership is key. Whereas for internal combustion engine vehicles, it was about the price of gasoline and diesel, in EVs, the battery is at the center of the conversation, with cost, weight, charge times and discharge rates dominating considerations. A commercial truck cannot sit and wait to charge for several hours because time lost is revenue lost for the fleet operator. While there have been some advances in these areas, battery and cell technology have not accelerated at the same pace as other aspects of EV technology.

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Solid-state batteries, the holy grail for reducing the weight of EV vehicles, offer promise but are still on the horizon. Your basic EV battery is just rows of cylindrical cells sequenced for power and performance optimization. In pouches and prisms some excellent and interesting work is being done, in addition to the classic cylindrical cells. Still, these are largely different form factors of the same thing, leaving us with old tech when it comes to today’s EV batteries. We need innovation in the battery industry to help commercial EVs reach the energy convenience of gasoline and diesel.

Commercial Versus Consumer

The commercial sector differs from the consumer in that commercial vehicles are made to order instead of produced in high numbers and parked on dealer forecourts in anticipation of demand. Also, commercial vehicles are not emotional purchases. The commercial fleet operator typically purchases commercial vehicles for function, durability and reliability. Early adopters have often relied on government incentives and grants to verify commercial EVs are fit for purpose, but in my view, that isn’t sustainable.

Financing programs have arrived, and they’re changing the funding dynamic for fleets offering vehicles on a subscription basis. (Disclosure: My company advises on finance solutions.) Subscription models mirror what consumer automakers like U.S. Porsche Drive and third-party car subscription services like Borrow (a California-based startup offering electric vehicle subscriptions) are currently doing. Companies are pioneering financing programs to help fleet owners maximize their operational performance and future-proof their electrification plans to scale.

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The Future Of EV

With the operational data to support EV rollout efficiencies, financing programs and federal mandates to help the needs of the consumer and commercial market in terms of EV charging access, I think we’re now seeing the fleet operator interest many of us have been waiting on in 2022. Fleet operators are looking not only at the vehicles they need but also at the critical infrastructure, which is the energy storage, solar and charging systems, to keep their operations running.

As the drive toward zero- and near-zero emissions continues to gain speed, commercial fleet owners should look for charging and energy solutions that deliver a streamlined process that makes the transition to an electric fleet seamless. Part of that process includes combining technology-agnostic, innovative charging, energy hardware, smart energy management software and energy services.

Commercial EVs are better for the environment and can come fully loaded, with rich, real-time data fed back to the fleet operator, enabling everything from predictive maintenance to route optimization and energy management. This type of data is the win-win needed to make the change over to EVs permanent; it’s good for the environment, it’s good for the fleet operator in terms of cost, and it’s even good for the driver who doesn’t have to endure diesel engine noise. So, look out for those delivery vehicles silently cozying up beside you at traffic lights as you won’t hear them coming and you can breathe a little easier.

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