World EV Day 2024 is a celebration of the remarkable strides made in the journey towards sustainable transportation with battery-electric vehicles (BEVs). While the industry is making significant strides, it faces inevitable challenges typical of any journey through uncharted territory.
This year’s State of Sustainable Fleets Market Brief yielded some impressive results for the 2023 BEV market, including the delivery of more than 26,000 buses, trucks, and vans — double the previous year’s deliveries.
The industry has seen some progress, with sales increasing year over year. Medium-duty commercial cargo vans and pickup trucks made up 90% of BEV deliveries, 95% of which were produced by two manufacturers, Ford and Rivian. Tractor deliveries increased to about 700 units, six times more than 2022. Additionally, shuttle fleets have the highest early adoption rates among fleet types surveyed (80%), and municipal and urban/last mile fleets were the next highest fleet types represented among user groups (63% and 60% of fleets in these categories reporting use, respectively).
Funding support has also been instrumental in helping fleets overcome the high costs associated with electrification. Nearly $1.5 billion in EPA funding was distributed to electrify 3,000 school buses. The Federal Transit Administration (FTA) awarded about $1.7 billion to 130 transit projects in 46 states and territories, facilitating the deployment of approximately 800 zero-emission buses (ZEBs). New York state committed $100 million for battery-electric purchases in 2023/2024, and the state of Michigan approve similar funding in its annual budget.
This growth reflects the broadening interest across the fleet industry. Survey results showed that while BEVs account for only 1-2% of all vehicles in early adopter fleets, 90% of electric vehicle users expect their use to increase. This, in large part, is due to technology advancements and the introduction and adoption of recent zero-emission regulations
Technology Advancements and “as-as-Service” Providers
Battery technology has seen significant improvements in 2023 that could result in reduced downtime and increased the efficiency of long-haul operations. Advancements to solid-state, graphene, and dual-ion batteries all promise cost efficiency, high output voltages, enhanced safety, longer lifespans and reduced use of critical minerals like cobalt and nickel.
Similarly, according to an article from Truck Labs, the integration of advanced technologies like artificial intelligence (AI), telematics, and the Internet of Things (IoT) is revolutionizing the trucking industry. These technologies are also helping to optimize logistics operations, enhance fleet management, improve data privacy and security, and drive efficiency and safety.
While these advancements are impressive, the high costs to acquire the technologies can be prohibitive for some. In response, 2023 saw the rise of fleet-as-a-service (FaaS) and charging-as-a-service (CaaS) providers, offering innovative solutions to help smaller fleets transition to electric vehicles without the burden of upfront expenses.
Regulations Driving the Transition to BEVs
The other driving factor behind the increasing adoption of BEVs is as a response to new and evolving zero-emissions regulations. Governments worldwide are supporting the transition to electric trucking by implementing stricter emissions standards and offering subsidies for electric vehicle purchases, tax breaks, and investments in charging infrastructure, designed to encourage fleets to transition to BEVs. By understanding and complying with these regulations, fleets can avoid penalties and benefit from various incentives, making the switch to BEVs more economically viable.
Some of the key regulations playing a pivotal role in fleets’ decision to electrify are listed here:
- Inflation Reduction Act: Establishes stricter domestic content requirements for EV and battery manufacturing and provides financial incentives and infrastructure support to help lower the barrier to entry.
- Advanced Clean Trucks (ACT) Rule: Requires manufacturers who sell medium- and heavy-duty vehicles to sell zero-emission vehicles as an increasing percentage of their annual sales from 2024 to 2035.
- Low NOx Omnibus Rule: Imposes stricter NOx emissions standards for heavy-duty vehicles, making it more challenging and costly for fleets to continue using diesel engines. It also extends the useful life and emissions warranty of heavy-duty diesel engines to ensure compliance over a longer period of time.
- Advanced Clean Fleets (ACF) Rule: Will accelerate the adoption of zero-emission vehicles (ZEVs) across much of California’s commercial transportation industry. The ACF rule requires fleets to transition all their medium- and heavy-duty vehicles operating in California to ZEVs.
- Warehouse Indirect Source Rule (WAIRE): Mitigates emissions produced by heavy and medium-duty traffic that services the warehouses within the district through warehouse operators’ participation in WAIRE.
While many of the regulations listed above are based in California, State of Sustainable Fleets research also suggests significant EV marketing growth outside of the Golden State, with Texas and Florida emerging as major players for electric cargo vans. The report also shows that 40% of zero-emission vehicles (ZEVs), mostly cargo vans, are in states that have adopted California’s ACT rule and less than one-fifth of the operating zero-emission trucks (ZETs) are actually registered in California.
As states outside of California implement their own EV regulations and expand their electric vehicle markets, the importance of robust charging infrastructure becomes increasingly evident to support this growing demand and ensure seamless adoption.
Infrastructure, Supply Chain Challenges
While BEV adoption is surging and supportive regulations are being implemented to encourage and incentive fleets to make the transition, charging infrastructure gaps and supply chain delays dominated discussions in 2023. The scale of upgrades being pursued for larger fleet electrification projects often requires longer lead times for siting, permitting, and interconnection. Additionally, utilities and fleets are still working through some data inefficiencies can make the road to electrification a little more challenging than is desired. On one hand, utilities need locational data about expected fleet load growth to support their investment plans. On the other hand, fleets need utility data on existing power supply, infrastructure capacities, upgrade costs, and schedules to support their planning. For the BEV industry to find success and scale effectively, coordinated partnerships between fleets, utilities, and charging partners will be pertinent.
In 2023, heavy-duty truck manufacturers faced significant challenges with scaling up their production lines, grappling with high production costs exacerbated by labor shortages and new compliance requirements. Despite the job creation potential of ZEV production, the availability and scope of credible training resources remain limited. Growth in this sector will depend on a combination of manufacturer-led initiatives and public-private partnerships with technical and community colleges.
Looking Ahead
Despite the challenges, as we celebrate World EV Day, it’s clear that the commercial trucking industry is in the thick of a major transformation, and that it will have its fair share of ups and downs. The advancements made over the past few years are just the beginning and before we know it, we the infrastructure, supply chain, and funding challenges we have today, will be in the rearview mirror. With continued innovation and support, declining battery costs, electric trucks will play a pivotal role in creating a cleaner, more sustainable future for transportation.
If you want to learn more about the status of BEV market, or if you are interested in finding out more about hydrogen, propane, and other alternative fuels, download the 2024 State of Sustainable Fleets Market Brief.
