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Among the many complex and important challenges of getting the net-zero era underway, the electrification of commercial vehicle fleets is one of the most critical. Many fleet operators are starting to realise that this involves a lot more than simply replacing current vehicles with electric ones when they reach the end of their lifespan. And I really do mean a lot more. From planning and deployment to management and maximising value, it can be difficult to know what to prioritise. That is why, at Hitachi, we are providing a complete, end-to-end single-source solution to help fleet operators navigate the road to electrification, in a simple and cost-effective way.
The road to net-zero is as much about business transformation as it is about harnessing new technologies. Part of this challenge is aligning short-term commercial necessities with longer-term strategic goals. The electrification of commercial fleets is an example of just how comprehensive the level of change required is. Purchasing electric vehicles is only one part of the process. Depots must be re-imagined, ensuring adequate charging infrastructure, intelligent power distribution, optimal maintenance schedules and a fresh approach to data and insight.
Finding individual partners for each component of electrification, from strategy, to financing, procurement, systems, depot design, maintenance, software integration and data management involves a series of tender requests. This can quickly start to feel unmanageable. That is where single-source comes in. By providing the expertise, strategic oversight and technical capabilities to manage the entire transition process, complexity and risk are reduced, and real business value is delivered.
Aligning the short and the long term
In my opinion, one of the biggest challenges of transitioning to EVs is going to be about processes and strategy, rather than technology. Bus and LCV fleet operators work in very different, but equally competitive and commercial environments. Many bus operators are at the start of their electrification journey, and this provides a unique opportunity to adopt a long-term strategy that maximises customer experience and revenue, whilst minimising cost and complexity. In comparison, many LCV operators have taken a committed but step-by-step approach. Having tested smaller fleets of EVs, these operators have then scaled up as their operational expertise has been established and their digital, information and infrastructure needs have become clearer.
It is pretty easy to make costly mistakes when trying to balance long-term vision with short-term actions and this can inhibit the impact of an EV rollout. For example, working with a range of siloed suppliers and partners can easily lead to a system of underutilised capacity, dormant energy and duplicated assets, which is a key challenge in today’s economy. Therefore, there is a real need for joined-up thinking from planning to the deployment, management and continuous optimisation of the electrification process. A key question for fleet owners is, which components of this transition are critical to self-manage, and how can we reduce risk and increase efficiencies, by procuring mobility solutions as a service?
The added complexities come in navigating several competing technologies and standards, which must have a high degree of interoperability. Add to that fluctuating energy market prices, and the long-term risks and rewards of battery price and performance factoring, and it’s easy to see how decision making can become overwhelming.
The EV transition benefits both the planet and the bottom-line
The complexity of the EV transition means it can be easy to get hung up on what needs to be done, rather than the reasons why. EV represents a huge opportunity for bus and commercial fleet operators, and a single source model simplifies and de-risks the process by reducing time to market, whilst ensuring greater viability.
Increasingly, consumers are demanding planet-friendly services and are actively seeking alternatives to heavy polluters. As a result, companies that move quickly are likely to have an advantage when it comes to brand image and reputation. But EV can provide a range of operational benefits too. Our goal at Hitachi is to help our customers go beyond regulatory requirements, by leveraging EV as a springboard to business change. The result will be greater efficiency and customer satisfaction.
By gathering and automatically analysing passenger, routing, charging and maintenance data, we have the potential to significantly lower the cost of fleet ownership. Here dormant assets are a key factor. There is a huge amount of spare capacity in our current economic system, which can be made much more efficient, by deploying an integrated and intelligent approach to data.
By using a data-driven approach to mobile and fixed asset management, operators will be able to better distribute their assets and increase revenue opportunities. Just look at charging depots. As power is business-critical, depot owners must plan for current and future energy requirements, whilst powering fleets at or above the maximum threshold of utilisation. However, there are few moments when the full fleet will need to be charged at any one time. And data can inform exactly when and to what extent vehicles should be charged; minimising the costs of expensive grid connections, whilst ensuring business continuity. In the same city, town or region, 20 other fleet owners have the same challenge, each with different charging and fleet utilisation requirements. In this case, the infrastructure far exceeds the demand and creates more costs, management requirements, and capacity than is needed. The solution is to aggregate demand, assigning vehicles intelligently to power-supply over the full-estate, and in doing so, maximising utilisation, capacity, and cost-savings.
Introducing single source and Depot as a Service (DaaS)
EV has the potential to simplify rather than further complicate fleet operations, but only if we take a consolidated, centralised approach to the way that depots are built and managed. Again, using a wide variety of partners makes this a lot harder. Single source is not only a way of simplifying the entire EV process, but it can also help reduce transitional risk too. Having all the expertise and technological capability you need under one roof means you know that there is end-to-end strategic oversight across every part of the process, including…
- Vehicle auditing and EV planning
- Financing assets
- Intelligent vehicle maintenance
- Vehicle charging
- Efficient depot design
- Battery management and end-of-life solutions
- Creating new revenue sources, such as surplus power allocation
- Leveraging EV to increase and retain your customer base
Whilst the traditional route of selecting individual and often competing suppliers, can increase direct control, it also adds significant risk and complexity, which may quickly overshadow benefits. However, the real challenges come later down the line when integrating different technologies with a potentially disjointed method for collecting, managing, and analyzing data.
As a result, it is clear that processes and infrastructure must be consolidated. Depot-as-a-service (DaaS) redefines the back-end operation of fleet management; providing a tailored approach to ensure each company’s unique needs are met, whilst simplifying and integrating the day-to-day, freeing time and risk. This can be attributed to customer experience, growth, and revenue gain. In doing so, DaaS brings together multiple technologies, standards, and systems, which must integrate seamlessly – not just today, but permanently in a mission-critical environment.
The process starts in the here and now. Our view is that DaaS must be a true end-to-end service and so our unique approach is built on four pillars:
E-plan starts by auditing your current fleet dynamics, from utilisation, to routing, and maintenance, as well as customer needs, opportunities and scenario planning. This initial strategic work provides a clear roadmap to determine where you are now, where your competition and regulation are headed, and where you could aim to be, by when. After the roadmap is set, our E-deploy service assists with equipment procurement, route optimisation, energy management, and modelling. Then we move on to installation and switching over existing assets, which includes creating the right flash charging, smart charging, rescheduling planning and fleet telematics systems. Once the systems are in place, E-manage helps you operate your vehicles and depots on an ongoing basis and drive efficiencies through aspects such as energy management and billing and payments. Finally, E-max unlocks performance and value with a range of innovative measures such as selling surplus energy and battery second life services.
All of this can help fleet operators avoid having to develop and maintain expertise in many different fields, not to mention eliminate duplication of effort among their organisations. At Hitachi, we can help you reach the value creation stage much quicker.
Unlocking value together
While the electrification of commercial fleets isn’t going to happen overnight, we do have all the technology and expertise ready to go. The task is putting it all together in a way that drives long-term value for both companies and communities. And the time to start is right now.
I really believe in EV’s ability to provide a reliable solution to the problem of balancing sustainability and growth. However, immediate and long-term plans have to be put in place. Single source offers a solution to avoidable cost and complexity and is a dramatic simplification of the EV transition that will help businesses gain maximum short, mid, and long term benefits.
Wherever you are on your own transition to an electric fleet, my team and I are here to help.
Head of Intelligent Fleet Decarbonisation Business, Hitachi Europe