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By Tony Rangel, Mobility & Smart Manufacturing Subject Matter Expert, Hitachi Global Social Innovation Business
Vehicle electrification is bringing dramatic changes to the transportation industry. Recent studies predict that the vehicle electrification market worldwide has a compounded growth of 7.8% and is projected to grow by $45.5 billion for manufacturers of electric vehicle (EV) components. While this wave of innovation will be costly and complex for fleet operators who must transition massive numbers of vehicles to electric power, it also represents a significant change for the better. It will enable transportation companies to meet fast-changing customer demands and regulatory requirements while reducing their overall carbon footprint, helping them to deliver better products and mitigate risks while lowering their environmental impact.
With the right strategy and a proactive approach to migrating to EVs, these organizations can move quickly to position themselves for long-term viability — and contribute to the greater good.
Until recently, fleet electrification has largely focused on consumer or light-duty vehicles (LDVs), but that’s quickly changing. While many commercial fleet operators may think that they still have years to plan and prepare for disruption of their own operations, they should think again. The move to electrification of transportation is well underway.
In fact, commercial fleets made up of medium or heavy-duty vehicles (MHDV) are already steadily adopting electric vehicle technology. Navigant Research predicts that in the coming decade, MHDV fleets in use by industry leaders like DHL, UPS and FedEx will be fully or partially electrified. The European Union is encouraging member states to provide incentives for developing EV technology and enacting zero-emission standards for vehicles. In the U.S., nine states participate in a zero-emission vehicle mandate, based on the California standard.
These changes will have an impact on multiple areas within the transportation industry, including the infrastructure and technology that will be needed to support electrification of transportation. If you are a fleet manager, you need to be prepared for this profound shift. If you want to continue to do business efficiently and without interruption, the time to plan is now.
Electrification is certain to increase the cost and effort required to develop in-house or on-the-road charging stations, and will affect routing accuracy and operationalization of power — but the benefits to the bottom line and society will be worth the effort. Fleet managers will also need to make difficult choices about how to invest in vehicles and the batteries that power them.
To plan proactively for electrification in commercial fleets, here are three actions to consider:
Infrastructure investment is a fundamental consideration for fleet managers. Many commercial EVs will need to return to a central location for charging at the end of their shift – and not all vehicles will have the same charging requirements. These issues, and others such as power outages, can be mitigated by using an intelligent mechanism to distribute power. Software integrated with the routing system can identify requirements for the next day, and then determine which trucks are charged first based on need.
Advanced routing software is another top investment opportunity for fleet managers. Organizations will need to evaluate what their current technology partners offer in terms of EVs, and determine how seamlessly those solutions integrate with and support electrification. If their current routing solutions don’t support an expanded EV fleet, managers will need to start looking for a solution that does.
The actual changeover to developing an electric fleet will have its own set of challenges. Some organizations will purchase new EVs, while others might prefer to retrofit their existing internal combustion engine vehicles, transforming them into EVs. Globally, the adoption of Electric Vehicles has been expanding in line with tightening environmental regulations. The European Union has made it mandatory to reduce average CO2 emissions to below 95 g/km by 2021. As internal combustion vehicles become more restricted, commercial fleets will need a strategy to ensure that they can make the switch on their own terms, to best fit their business.
For commercial transportation companies that want to make the smoothest transition to EVs, Hitachi brings an unparalleled level of industry leadership, in-depth knowledge, and proven experience in the EV industry. As a key partner in Optimise Prime, the world’s largest commercial Electric Vehicle trial, we are helping to discover potential issues surrounding the large-scale uptake of EVs and are contributing to the development of solutions for smart depot and home charging.
A three-year project, Optimise Prime will use IoT technology to track the charging activity of up to 3,000 commercial vehicles to build new insights. Working in close collaboration, Hitachi, U.K. energy regulator Ofgem, U.K. Power Networks, Royal Mail, Centrica, Uber, and Scottish and Southern Electricity Networks will collect and analyze data from the vehicles. Hitachi is designing, building and operating the project’s IoT platform, which will manage the incoming data and help develop the results.
Hitachi will also coordinate project workstreams and create solutions to optimize the EV charging infrastructure at depots, allowing more vehicles to charge within the network’s existing capacity. For example, analysis from Optimise Prime can help provide a better understanding of the optimal number of charging stations within a city for passenger vehicles, as well as the best mix of high-capacity chargers for large transport vehicles. With this information, fleet operators will be able to determine the right mix for infrastructure investments and plan accordingly.
Taking advantage of this massive commercial Electric Vehicle dataset will enable project partners to devise practical ways of overcoming the up-front costs that are hindering widespread commercial EV deployment. At the same time, insights they gain will help reduce the cost of the EV transition for electricity bill payers. Best of all, the dataset will be publicly available, enabling fleet managers, vehicle operators and other stakeholders to proactively prepare for the EV wave.
The Optimise Prime initiative is only a small part of Hitachi’s investment in EVs. Hitachi is also actively driving further adoption of EVs by automotive manufacturers as we continue to enhance our electric motors, inverters, and other electric powertrain systems. Most recently, Hitachi Automotive Systems announced the start of mass production for an 800-volt-compatible high-voltage and high-output EV inverter, which increases EV practicality and enables long-distance driving. The product contributes to both comfortable acceleration performance of the vehicle and faster charging times.
These initiatives — and many others underway — are a natural expression of Hitachi’s commitment to Powering Good. Our sustainability approach to solutions is designed to benefit not only businesses, but society, the environment and the planet.
Vehicle electrification of MHDV is well underway and will impact commercial fleet managers in just a few years. While the consensus has been to sit and wait, now is the time to prepare. By getting ahead of the coming wave of commercial electric vehicles, companies can turn uncertainty into a competitive advantage.
With decades of operational technology (OT) and IT experience, Hitachi brings the knowledge, technologies and industry leadership that can help you develop a strategy for fleet electrification and execute the operational changes needed for a smooth transition to tomorrow’s world. Our initiatives are designed to motivate and support fleet management companies that want to use more sustainable transportation and green energy power options for vehicles to benefit their profitability, the environment and society overall.
Mobility & Smart Manufacturing Subject Matter Expert, Hitachi Global Social Innovation Business
Tony Rangel joined Hitachi in 2018 with more than 20 years of expertise in advanced mobility for Fleet Transport, Car Sharing modeling, EV/AV and Connected Car strategy. Prior to joining Hitachi, Tony held roles as Global Director of IIoT at Bain Capital, Global Strategic Partnerships Manager at Continental Automotive, VP Technology Operations at Precog, VP Sales and Operations at CalAmp, and Director of Operations at Airtouch Teletrac. Tony is passionate about improving customer’s lives by automating manual processes thus improving operational efficiencies. He holds degrees in Engineering and Computer Science from Pepperdine, Peter F. Drucker & Masatoshi Ito Graduate School of Management, and MIT.