Learn about the help fleets can have when getting started with EVs.
Episode 231: There’s constant pressure on fleets to go greener and make strides towards eventually becoming fully EV. However, a lot of fleets don’t have the resources or the understanding of where to start. What help do fleets have?
James Cade is the Principal at Asset and Maintenance Insights and is a returning guest on the show.
Guest Website: FleetAMI.com
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Transcript of Episode:
You’re listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine, and this is the show where you get expert advice about heavy-duty parts that keep trucks and trailers on the road longer while lowering cost-per-mile.
My guest today is James Cade, he’s the Principal at Asset and Maintenance Insights, and he’s a returning guest on the show. James, welcome to The Heavy Duty Parts Report. Glad to have you back on the show.
Oh, thanks. Thanks for bringing me back. Appreciate it.
So I’ve been seeing a lot of your posts on LinkedIn. You’ve been a busy, busy man, and you’ve been doing some really interesting work with fleets. Kind of want to talk to you about the trends that you’re seeing in the move away from internal combustion engine to electric vehicles.
So maybe we could start there. Some of the work that you’ve been doing, you’ve been working with several fleets. What are you seeing as the big trends with fleets right now with electric vehicles?
Well, I think the thing that I’m hearing and seeing a lot of is that fleets, you know, they want to do something, and they have the interest. They have the public is putting a lot of pressure on fleets, I think as far as is wanting to turn green and do more in that area, reduce their carbon footprint, decarbonized.
So there’s a lot of pressure to do something, but I think a lot of fleets, especially you know, midsize fleets in some smaller fleets, but mostly the midsize, either don’t have the resources or the understanding of just where to start. And that’s quite honestly is where I come in a lot of times is helping these fleets get started in their transitions, helping to understand what’s available, how will it fit into their operations, and then also helping to secure grants and talking with utilities, which is a big challenge as well.
So it’s really an interesting time, done some work in this area with other fleets and can help provide that resource to get things started and get them on the path to implementing electric vehicle.
Right. So if you’re a fleet that feels that there’s an opportunity to convert some of your units to electric vehicles, what’s the price difference between buying like a traditional what you call an I.C.E. vehicle, internal combusted engine versus electric? Is it 10% more? Is it a hundred percent more? Just I’m curious about that.
It varies by classification a little bit, and quite honestly, the pricing is coming down, but you’re still almost double in some cases, in some applications, maybe 50% higher price. But especially when you get into the heavy-duty vehicles, it’s almost double where you were with an I.C.E. vehicle.
Although the gap is shrinking because one, you have two things going on. You have the EVs, which are becoming as more and more start getting developed and what out there is the prices starting to come down.
Secondly is that you have I.C.E. vehicles or internal combustion engine vehicles that are becoming more expensive because meeting the new regulations and everything. So that gap is shrinking, but it’s still right now is EVs are still more expensive to purchase than an I.C.E. vehicle.
So when you talked to the manufacturers of these electric vehicles, and I’ve seen that you’ve done some work with them, what’s your feeling on their outlook as to the percentage of market share that they can attain, let’s say between now and 2030? Are they thinking that they can get 10% of the total vehicles, 20%?
I know in California they’ve mandated, I think it’s 50% and then they have another date for a hundred percent, but the rest of the country, it’s not gonna be at that total amount. So what’s your feeling on where we’re gonna go between, let’s say now and 2030 as to how many electric vehicles will be on the road?
Well right now, as you said, really the only one that has mandated the use of electric vehicles across the spectrum, by actually starting in the next of years requirement of OEMs to start selling electric vehicles, certain percentage of overall total and fleets also are required to start buying electric vehicles in California.
What’s interesting is, or what’s happening actually, is that many states are looking at what California has done and is starting to take steps towards implementing the California model, basically, I believe it’s 15 states as of right now, have signed on to a memorandum of understanding with California, basically taking their existing programs and begin the process of implementing those into their state operation or state regulations as well.
Most of those states are in the northeast and along the east coast, but also, um, you know, Oregon and Washington and others are also participating. And then you also have Canada that has signed the same, Canada anyway, as far as like Ontario, has signed onto the same memorandum of understanding.
So again, there’s a lot of activity around, and I think the manufacturers, both the startups as well as the traditional OEMs are looking, they’re gonna be pushed into a corner or required to do things that to produce electric vehicles for much more jurisdictions than just California.
Yeah, that makes a lot of sense. Well, I’m looking forward in our next segment to talking to you more about what you’ve been doing with fleets, and we’re also gonna talk about the heavy-duty parts angle on all this. So we’ll talk to you in the next segment.
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Okay, so James, we’ve got you back for our next segment. And you know, I’m really interested to learn more about what you’ve been doing. You know, you’re working with fleets, you’re talking to them about adopting and adding electric vehicles to the mix of the equipment that they’re operating.
You know, right away, there’s some big questions, James, that I have. But the first one is if the electric vehicle is going to be mandated and it’s going to be more expensive, how do fleets make that work economically? How do they get that money back?
Well, there’s a couple of areas. One is the power or the fuel, the energy, whatever you wanna call it for an electric vehicle. The difference between an I.C.E. and an EV, the fuel or the power and electricity for the EV is going be much, much less than diesel, especially in today’s environment.
You know, we’re upwards of five a gallon for diesel fuel across the country, you talking about EVs operating on pennies or even a few dollars for the same operations. So there’s going to be a significant savings in just the energy side of operating an electric vehicle. The other thing about electric vehicle is that there’s a lot less moving parts. I mean, this is pretty well known across the industry.
There’s a lot less moving parts. There are some concerns around reliability of the EVs and at least in the early stages, you know, if you go back and look at, if you go down and look at, there was a recent JD Powers report released on automotive quality and they were very down on the quality or reliability of EVs in the automotive sector because of the unknowns quite honestly, you know, you’re working with a systems that have never really been tried over long periods of time.
So again, the reliability is not there that they would expect to see on an I.C.E. vehicle. And I expect that same level of issues will show up on our EVs on heavy duties and light duty, medium duty, heavy-duty EVs as well.
It’s understandable because if you look on the automotive side or even the truck side, we’ve had 50 to 60 years of development to get to the level of quality we have on ice vehicles today. So we’ll get there, but at least in the early stages I think we will see some reliability issues.
Right. So you’re working with fleets and I know if I was operating a fleet, I’d have some concerns. So let’s go through some of them. So one, what about charging infrastructure?
Like I’m sure back when gasoline engines were first being developed, there were people with horse and buggy who were going, ah, they’re never gonna be able to get the infrastructure, you know, nationwide with oil and gas.
Right, and I hear the same thing from people today. It’s like, well the charging stations, you know, they’re never gonna be able to get that done. And look at California, they got brown outs in the summer from AC units and I mean I’ve had that opinion. So what’s your thoughts on charging stations and then we’ll talk about parts in a minute.
The overall situation with EVs is the biggest issue right now is infrastructure. And, you know, two levels of that. One is that the ability to have the power available to be able to provide the amount of charging power that is needed.
You know, if you look at a, you know, seeing some couple of different studies done and done my own calculations and, you know, you take a look at a fleet of 10 – 15 heavy duty vehicles operating on regional status today, coming back and recharging every night, that’s the same amount of electricity that a small factory would would need to operate. So again, it’s a major commitment of power that the utilities will have to figure out. The other side of the coin is more for fleets, the challenge is getting the power where you need it.
And, you know, trucking companies typically are transportation companies or fleet operations are typically in areas where, maybe not the best side of town or older facilities that may not have the infrastructure developed for the needs of an electric vehicle.
So sometimes just getting that electric power in the quantities you need to a facility can be a huge undertaking, not only for the fleet but also for the utility. In some of my dealings with fleets and utilities is quite honestly, buying the vehicle is the easy part.
It’s the infrastructure development that becomes the challenge. And most utilities will tell you today is that it’s anywhere from 12 to 18 months process just to get the power to where levels that you need to your facilities to be able to meet your requirements. And that’s really been the challenge.
The infrastructure is gonna be a challenge going forward for several reasons. One, to getting where you need it, but also getting the power in the levels that you need to recharge vehicles on a regular basis.
Now, when it comes to the parts and service side of it, at least initially, most of the EVs that people are gonna be using in a commercial setting are gonna be on dedicated routes and they’re gonna be relatively close to home.
Meaning we’re not gonna see EVs just yet traveling coast to coast, right? Because there’s range limits. So at least from the perspective of the fleet, I can see how they would be like, okay, I’m not really that worried about the truck breaking down in Colorado and I’m based out of Florida.
But what I do think would be a concern, and maybe you can give some insight on this, is like, okay there’s less parts, but what happens when the vehicle does break down? Is it gonna be significantly more expensive to replace the parts that do need to be replaced? And how am I gonna get those parts because what is the distribution channel of the parts gonna look like? So what’s your thoughts on that?
Again, kind of looking at some of the information I’ve been reviewing is that as of right now, when you look at the parts issues around EVs is two or three things are going on. One is the parts themselves that you have to purchase in most cases are more expensive than what you expect to see on an I.C.E. vehicle.
So you have a higher cost of the, of the parts. In many cases it takes longer to get because you just don’t go down to your local dealer and pick up a DC to DC converter for an EV if it happens to be bad. And then the third thing is that, and it depends on the company again, I think this is one of the discussion points that needs to happen, is that there’s a lot of startup companies going on in the country right now, and then you have the traditional that already has the distribution channels and everything available.
Then you have all these that are really challenged, I think, to try and match that same level of commitment that the traditional OEMs have. They’re stepping up and they’re getting there, but again, I think we’re gonna have some early, early on we’re going to have some challenges in getting the parts. And most of the parts, quite honestly, when we’re talking about the high voltage system on the vehicles is specialized to that individual vehicle.
So you’re not gonna be able to go to your local store and pick one up, you’re gonna have to rely on the manufacturer of that vehicle to get you that part.
Well, it’s anything but a straight path that’s for for sure. And, and I think that’s why we need experts like you to be available to help. So if a fleet is looking to, to work with you if you could summarize like what are you doing for them? What problems can you help them solve? How can you help them with their business?
I think biggest is just knowing, based on my experience with large fleets companies and then few years ago getting into the EV side, being able to match those two pieces of experience allows me to work with fleets to understand where they need to start today. And I think that’s really the biggest challenge a lot of fleets are struggling with is, okay, where do I start? You know, do I go buy a vehicle first or do I go talk to my local utility?
But I can tell you that from where I am today in the involvement that I’ve had up to this point is there’s a lot of planning that needs to go on before you even start thinking about talking to utilities or manufacturers of electric vehicles. There needs to be a lot of thought put into and about as far as how will your operations match up with, an limitations? Can it fit into your operations? Can your operations be modified to fit the requirements?
So there’s a lot of planning that goes on that needs to go on before you even make a commitment to either a utility company or an EV manufacturer. It needs to be understood. And that’s where I come in, I think is helping help drive those discussions and maybe shorten the planning process based off experience I’ve had in the last few years in this area.
Right? It’s amazing, right? You can have all these years of experience and you can condense that down for somebody and they can gain all of that experience that you’ve taken decades to build in just a short period of time.
So, and everyone listening don’t ever forget the five P’s proper planning prevents poor performance. So having someone like James there to help you out is a great thing. So if people wanna learn more I think that your website’s a great place for people to start. So if you wanna learn more about what James does, head over to fleet ami.com and you’ll be able to get an overview of what he’s doing there and be able to contact him directly so that you could get him involved in your fleet operation.
James, thank you so much for being on The Heavy-Duty Parts Report. Again, it’s been wonderful to have you back and I look forward to having another conversation with you in the near future.
Appreciate it and thanks for the invite.