Commentary on Geotab’s 2020 EV Fleet Trends Article – Part I

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At the beginning of this year, Geotab published a very interesting white paper titled “Electric Vehicle Trends 2020: Top 6 Factors Impacting Fleet Electrification.” (The piece can be found in its entirety here: https://www.geotab.com/white-paper/electric-vehicle-trends/) Now that we’re approaching the end of 2020, we thought it might be useful to go back through the assertions made in the paper to determine (1) whether the trends are evolving as Geotab predicted, and (2) if so, how EVCS is able to address those trends, including the targeting of customer pain points. Below are the first three trends referenced out of the six and our thoughts on each.

(1) The EV price tag will continue to drop as battery costs fall

The Prediction: The most significant factors the paper cites toward this assertion are improvements in battery technology (primarily the shift from cobalt to cheaper nickel-based cathodes), increased scale of battery manufacturing as demand grows, and government policies that invest in the development of battery technology. It notes as evidence that the average EV battery pack dropped from $1,160/kWh in 2010 to $176/kWh in 2018.

The Assessment: According to data compiled by BloombergNEF that was not available when the paper was written, this figure fell even further to $156/kWh in 2019. Moreover, on September 22nd, Elon Musk announced several improvements that will reduce Tesla battery prices by 56% over the course of the next three years. Bottom line, this trend is gradually occurring as predicted, with fleets that buy vehicles in large scale poised to be one of the top beneficiaries. EVCS is currently helping industrial, commercial and municipal entities take advantage of growing EV demand amid falling prices by installing more charging stations on their properties that will support larger vehicle fleets.

(2) Electrification will spread into the heavier vehicle segments

The Prediction: In 2018, while EV fleets were comprised of more than five million cars, only 460,000 electric buses and 250,000 light-duty commercial vehicles were in use. Geotab saw stricter emissions laws, progress in battery chemistry, and an ever-expanding variety of EV models as surefire signs that electrification of heavier duty vehicles was next. Main growth areas would likely be commercial vans, buses and medium- to heavy-duty trucks.

The Assessment: One week ago, Ford debuted its first commercial electric van, the E-Transit, to go on sale in 2021 with multiple configurations. And GM announced in June it will start producing a battery-electric van in late 2021. Buses got a big boost this year as Proterra announced in early October a $200 million investment for battery and electric drivetrain development, while Lightning eMotors doubled its manufacturing space and workforce to meet growing demand for various types of commercial EVs. Additionally, PCMag just announced two weeks ago that Volvo’s electric heavy-duty trucks will hit the roads in 2021. Chalk all this up to another accurate prediction, with EVCS in a pivotal position to help manage the explosion of heavier duty fleets along the West Coast by supplying the necessary charging installations and networking software to power it.

(3) Updates to policy and regulation

The Prediction: The transition to electric will be dominated by government mandates and regulations rather than financial incentives. For instance, states and cities will begin demanding that all new vehicles sold be electric or that reduced CO2 emissions must be met to combat climate change. The paper notes that “California is the state with the most aggressive deployment targets,” motivating nine other states to join them in requiring carmakers to produce ZEVs.

The Assessment: Per Governor Newsom’s executive order in September, CARB is writing regulations to require new medium- and heavy-duty vehicles to be 100% zero-emission by 2045. And now with the election of Joe Biden, expect CAFE standards relaxed by the Trump Administration to be returned to Obama-era levels. That said, while we agree that EV-friendly regulations will grow, legislation like the Moving Forward Act, a $1.5 trillion infrastructure bill that passed the House in July, is chock-a-block with financial incentives that will likely increase the rate of transition. So, we don’t see an abandonment of incentives anytime soon. Either way though, EVCS has already created a turnkey charging solution for fleet operators in California who wish to get a jump on this transition, utilizing existing government subsidies to cover site assessments, permitting, installation, maintenance and grid services.

Our thoughts on the remaining three points of the white paper will be published in a subsequent blog.

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