Three practical steps fleets can take to achieve cost-effective decarbonisation

There’s a question that fleet managers around the world should be asking themselves regularly: what’s the next practical step we can take today that takes us further towards our wider decarbonisation goals?

While every business has long-term sustainability ambitions, what matters most is how they act now (and that they do act now, as they can’t afford to wait). Already, a fifth of companies have made a formal commitment to decarbonisation in their key performance indicators (KPIs). It shows they understand the importance of developing today’s operations with the needs of tomorrow in mind.

As ever, cost is seen as a challenge. But it shouldn’t be. There are plenty of cost-effective ways for fleets to take those vital next steps towards decarbonisation – and to take them today.

So, here is how fleet managers can achieve this, helping them to prepare for the future of fleet operations while reducing their total cost of mobility at the same time.

The practical steps fleets can take to decarbonise and drive cost-efficiency

With cost playing such a prominent role in the conversation, fleets need to explore innovative ways to enhance performance while adopting low- and zero-emission solutions.

That is why our recent LinkedIn Live event, “Tipping the scales: How to find cost efficiencies when decarbonising your fleet”, explored innovative, yet realistic, routes to fleet decarbonisation.

Across a wide-ranging discussion, our panel of industry leaders highlighted some important areas fleet managers can focus on to help them strengthen the business case for fleet decarbonisation in the eyes of even their more cost-focused stakeholders.

So, here are the three practical steps all fleet managers should take to work towards net-zero operations in the most cost-effective way:

1. Model the total cost of ownership (TCO) of the EVs a fleet needs

Our latest report highlights that fleets see the cost of electrification as their biggest challenge.[2] This is often taken to mean the up-front costs of purchasing EVs or switching to them as part of a lease. But the sticker price of a vehicle does not tell the full story.

To make a true comparison between EVs and internal combustion engine vehicles (ICEs), fleet managers need to explore the TCO of an EV across its entire lifetime. This includes the initial purchase of the EV, the infrastructure required to power it, the fuel costs, any maintenance needed and the depreciation of the vehicle.

As Maurizio Romano highlighted during the event, TCO modelling has proven to be a critical tool for G4S in its move to EV operations – giving the company greater control over its costs along the way. This involves using in-depth data on current operations to fully understand the requirements of each vehicle in the fleet. From there, fleet managers can forecast the cost of powering an EV during its lifetime and explore ways to put the best possible terms in place with suppliers.

Combine this with elements like government and tax incentives in different markets and fleet managers can build a comprehensive TCO model that strengthens the business case for EVs and highlights where best to begin the transition in any given fleet.

2. Map tomorrow’s charging needs against today’s operational requirements

Research from Shell and Deloitte shows that almost half (47%) of fleet owners are unclear about the level and type of charging infrastructure they need to drive effective EV operations.[3] This is a significant problem when, as Giorgio Delpiano pointed out in the discussion, implementing the right charging infrastructure is as important as choosing the right EVs.

EV charging needs will be driven by their operations, which is why it is important to carry out TCO modelling. Charging infrastructure is integral to the TCO of an EV, so measuring potential power needs will help to forecast costs and develop a clearer picture of future charging requirements.

Fleet managers will also need to look beyond charge points and ask bigger questions of their charging infrastructure if they aim to develop effective, cost-efficient EV operations. For instance, will it give them the capability to manage power demand at the depot? Will it enable smart charging? How can drivers easily access charging on-the-go or cost-effective charging from home where needed?

Fleet managers ideally need to answer these questions before they start the process because getting their charging infrastructure right first time can save significant costs.

3. Explore the interim solutions that can take a fleet closer to net-zero emissions

As Maurizio Romano explained during the discussion, creating a zero-emission fleet is the goal, but businesses cannot do it overnight. Instead, fleet managers need to take a phased approach to the EV transition and their wider decarbonisation journeys.

In practice, this means adopting other solutions such as hydrotreated vegetable oil (HVO) or biofuels in the interim. Our panel also advised fleet managers not to be afraid of technology like hybrid vehicles, which can help to reduce CO2 emissions while driving behaviour change across the business at an early stage. Adopting a policy of bringing low-emission vehicles into a rental fleet wherever possible is another practical way to drive early emissions-reduction efforts.

Regardless of the solutions a fleet implements, efficiency will be a key factor for every business. No matter the powertrain, operating vehicles more efficiently can help to reduce emissions while saving on costs.

Bonus Step: Find a mobility partner that can support a fleet with the other three steps

Given the critical role of mobility in society, decarbonisation is naturally a priority for fleets everywhere. And, if that was not enough of a challenge for them to deal with, it is also imperative that businesses achieve that decarbonisation in a cost-effective manner that allows them to meet growing demand.

Thankfully, as the steps above show, there are practical steps and solutions already available to fleet managers to help them navigate fleet decarbonisation. But there is still so much to consider when looking to make the right choices for a fleet that has its own specific operational requirements. This makes it even more important for fleet managers to work closely with suppliers who can support them at every stage of their unique journey.

By working with the right mobility partners, fleets can make a strong business case for delivering decarbonisation knowing they have the ability (and the support) to do so in the most cost-effective way.

Watch the full LinkedIn Live event to dive into the detail on the three steps above.

Sources

[1] Based on a study conducted by Kantar commissioned by Shell Fleet Solutions. Research conducted in 2022 amongst 742 businesses - sample of decision makers for Delivery, Operational, Professional & Aggregator Fleets across US, Singapore, Malaysia, Germany, Poland and Netherlands.

[2] Shell. “Fleet Decarbonisation: How to drive cost efficiencies by unlocking value.” 2023.

[3] Shell & Deloitte. “Navigating Fleet Decarbonisation: A guide to driving a successful transition.” 2022.