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Smaller operators waiting for more fleet electrification

Spring 2024 Commercial Vehicle Business Summit

Johnnie Martinez IIbyJohnnie Martinez II
April 16, 2024
in Transportation
Reading Time: 4 mins read
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State and federal regulators continue to push for commercial and fleet electrification while some smaller operators are waiting on their larger counterparts to make the first move. 

The Environmental Protection Agency and California are targeting significant fleet electrification in the next few years, despite a lack of standards, Sidney Miller, fleet salesperson at Midway Ford Truck Center, said during a panel at the virtual Spring 2024 Commercial Vehicle Business Summit on April 11.  

Walmart, which has one of the largest fleet operations in North America, is still making electrification and technology decisions, and smaller operators are waiting to see its model, Gregory Skinner, vice president of strategic insights at Escalent, said during the panel. 

Fleet operators often tell him: “Oh, we’re just waiting to see what Walmart does,” Skinner said, adding that Walmart “lead[s] the market and they’re going to dictate the market.” 

Walmart has 11,361 [commercial] tractors, 29 [straight] trucks and 81,598 trailers, making it the second-largest private fleet in North America, according to Transportation Topics’ 2023 Top 100 private carriers list. Walmart trails only PepsiCo in fleet size, although its trailer volume dwarfs every other fleet on the list. 

Some smaller fleet operators are also waiting for larger counterparts to adopt telematics and other connected solutions, Dania Rich-Spencer, vice president of automotive and mobility at Escalent, said on an April 10 panel. 

“We’re seeing telematics adoption around 34%, being driven by the larger fleets, so fleets that are maybe 100 vehicles up, they’re getting on board first,” she said. “The more vehicles that you have, the more headaches that you have, so if you can use technology to help you manage that fleet, we’re seeing the adoption curve as being led by those larger fleets, and it’s only poised to grow more.” 

Infrastructure concerns persist 

In addition to waiting on larger fleets to make electrification decisions, some potential customers remain limited by local infrastructure, Skinner said during the April 11 panel. 

“I was talking to a transportation manager in Atlanta, Ga., and they’ve gotten a fleet of 150 vehicles, and her response was, ‘We’re really interested in electrifying, we’ve got a bunch of test vehicles on board, but we physically don’t see chargers, and we’re not mandated to meet the same sort of [zero-emission] guidelines as the other states. We’re going to wait to see what happens.’” 

While some states have regulations and have received grants and other funding to push EVs into fleets, others have none, creating a complex environment for companies that operate in several states, Christina Ameigh, vice president of U.S. truck sales at Lion Electric, said during the panel.

“There’s not much for grants and funding, and some of those states really don’t have that regulation to push them in,” she said. “You have to really look at, especially for the big fleets that have EVs in every state, you really have to do a lot of planning and put a roadmap together.” 

A Lion 6 electric truck charges outside the Lion Electric assembly plant in Saint-Jerome, Quebec, Canada, on Thursday, Oct. 13, 2022. Lion Electric Co. designs, develops, manufactures, and distributes purpose-built all-electric medium and heavy-duty urban vehicles, including seven mid range truck and bus models.
(Photo/Bloomberg)

Improving information access

Fleet operators and managers also need access to information and infrastructure to better position themselves to make informed decisions about the future of their fleets, Jill Trotta, principal consultant and aftermarket strategy adviser at 5801 Consultants, said during the panel. 

There need to be “places where smaller operators can come and get that information and have access to a lot of the same charging structure that the bigger fleets do,” she said.  

“Out here in California, we have a lot of hydrogen fleets, and the hydrogen stations are set up for one side to be the commercial side and one side a noncommercial side. To have things like that, that are more readily available to the smaller operators and ways for them to figure out what they want, what is available, do they have access and how do we give them access?” 

 Register for the 2024 Equipment Finance Connect, which focuses on best practices in equipment finance, on May 5-7 in Nashville, Tenn. Learn about the event and free dealer registration at EquipmentFinanceConnect.com.    

Tags: commercial financingelectric vehiclesequipment financesupply chain
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