Businesses and governments that own and operate vehicles can commit to EVs today, sending a demand signal to help trigger investments in increased production capacity from vehicle manufacturers and within the battery value chain. - Photo: Penske

Businesses and governments that own and operate vehicles can commit to EVs today, sending a demand signal to help trigger investments in increased production capacity from vehicle manufacturers and within the battery value chain.

Photo: Penske

A new report released July 13 by international non-profit the Climate Group has found that most buses and light duty fleet vehicles can switch to EVs in leading markets[iii] by 2030. Doing so would reduce carbon and deliver benefits, including for health, infrastructure and battery innovation, according to a news release.          

The analysis, which was carried out in partnership with global sustainability consultancy SYSTEMIQ, sets out to understand the effects of businesses and governments accelerating the electrification of their fleet vehicles. Calculations show that buses and light duty vehicle fleets make up a fifth (21%) of vehicles on the road yet contribute to a quarter (26%) of road transport emissions. At present, fleet vehicles are being left behind in the electrification race as most EVs driven today are privately owned passenger vehicles, while just 11% are part of fleets.

By modelling a high ambition scenario where most new bus and light duty fleet vehicle sales are EVs by 2030, the report shows faster electrification is possible and would have far-reaching effects.

Helen Clarkson, CEO of Climate Group, said: Businesses, governments and public sector organizations have about half a billion light duty vehicles in their fleets around the world. Not only can fleets use their purchasing power to electrify faster, but crucially it would help to bring about a wider shift to clean road transport by supercharging demand, boosting infrastructure and growing the used EV market, making them more readily available and affordable for consumers.

COP26 (U.N. Climate Change Conference) President-Designate Alok Sharma said: "Reaching net zero by the middle of the century requires a step change across all sectors. And switching to electric vehicles is a crucial part of the action we need to take to hit this goal and keep the target of limiting global temperature rise by 1.5°C alive."

Cutting Carbon Emissions

Accelerating the electrification of fleets could cumulatively avoid over 3 billion tons of carbon dioxide (3.1 GT CO2e) by 2030, when compared to the BloombergNEF Electric Vehicle Outlook 2020. This emissions saving is similar to the annual contribution of India, the world’s third highest emitter.

On top of this, the positive knock-on effects of fleet electrification, such as a bigger used EV market, would contribute savings of a further 700 million tons of carbon dioxide, resulting in a total combined reduction close to the annual emissions of the European Union[iv] (3.8 GT CO2e).

Boosting the Used EV Market

The used car market for EVs would be around 40% larger in 2030 and 75% larger in 2040, under this accelerated scenario. This would mean an extra 7.2 million second-hand EVs on the market in 2030, increasing choice and affordability for individuals and organizations without ready access to finance.

Some benefits of faster fleet electrification: Increase the size of the used electric vehicle (EV) market by 40%; add four million public charging units; lower battery costs by 14%; and avoid an estimated 120,000 premature deaths from transport-related pollution, according to a study from The Climate Group. - Photo: Climate Group

Some benefits of faster fleet electrification: Increase the size of the used electric vehicle (EV) market by 40%; add four million public charging units; lower battery costs by 14%; and avoid an estimated 120,000 premature deaths from transport-related pollution, according to a study from The Climate Group.

Photo: Climate Group

Improving Public Health

As EVs help to reduce transport-related air pollution, the accelerated scenario would avoid an estimated 120,000 premature deaths annually in 2030, with the greatest benefit occurring in densely populated urban areas in the Global South. This would also help to save on global healthcare costs caused by air pollution, which contributes to trillions of dollars of spending every year[v].

Increasing Public Chargers

Meeting charging demand under this accelerated scenario would on average require an extra 14,000 charging units to be installed every day through to 2030, over and above current projections[vi]. This means that faster fleet electrification would result in an additional four million public chargers being built – enough to meet the needs of 29 million EVs.

Stimulating Battery Innovation

As the accelerated scenario would mean greater EV demand, this would lead to battery costs being a further 14% cheaper by 2030 than has been forecast[vii], thanks to advances in the efficiency of production. This would also help to bring forward the tipping point where EVs reach purchase price parity with equivalent internal combustion engine (ICE) vehicles by around one year, with this occurring as early as 2023 in some markets and vehicle categories.

Making the Scenario a Reality

To ensure the accelerated scenario can be reached, it has been stress-tested against potential constraining factors that could limit EV growth. These include the availability of raw materials for batteries, such as lithium carbonate, as well as installed battery manufacturing capacity.

The report also highlights that the right commitments, policy support and additional investment will be required to make faster fleet electrification a reality, providing clear recommendations for governments, investors and businesses. For example, businesses and governments that own and operate vehicles can commit to EVs today, sending a demand signal to help trigger investments in increased production capacity from automotive manufacturers and within the battery value chain.

Global initiatives such as EV100, led by the Climate Group, are helping to aggregate this demand. Through EV100, there are more than 100 corporates with some of the world’s largest fleets, including BT Group, LeasePlan and Siemens, committed to transition more than 5 million light duty vehicles to electric by 2030.

Originally posted on Charged Fleet

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