Managing the Financial Side of Commercial Fleets

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The House of Electric Vehicles

June 1, 2017, by - Also by this author

As we come to the close of another season of fleet previews and new vehicle announcements, it’s becoming more and more obvious that there are some real changes brewing in our industry: everything from powertrains to new vehicle classes, to autonomous vehicles, and new safety technology.

For the first time in years, I didn’t hear a single mention of hydrogen or fuel cell technology. There were a few small announcements related to LPG and CNG, but not much in that area either. The OEMs seemed to have decided at this point to be the house of battery electric vehicles. There are some great vehicles in the category now, from full battery powered cars to hybrid trucks, and a lot in between. Most of the vehicles have that beta test feel to them and we’re all quite certain that none of the OEMs are getting rich selling these new vehicles, but they seemed to have picked a direction on powertrains. Or, maybe I should say, the EPA and CARB picked a direction for them.

Battery powered vehicles don’t make economic sense for anyone right now. Lithium ion batteries are still about 50% too expensive to compete with gas or diesel. And no, that massive new factory that Elon Musk is building won’t make a difference. The pricing problem is related to resource scarcity not volume. While we all appreciate all the subsidies that are helping us make the leap to cleaner air and electric vehicles, it’s good to remember that we’re not quite there yet economically. There is a nice population of movie stars and municipalities that will embrace these new vehicles regardless of their cost but we aren’t going to get widespread adoption until the dollars make sense.

We are seeing hybrid technology creep up the vehicle class scale and that is probably a good thing for fleets. For the longest time, most OEMs spent all their efforts focusing on creating a super lightweight compact car that could best take advantage of the hybrid boost. We’re still early in the process but it looks like we might start to see some real useful hybrid technology in the pickup and van segments in the not too distant future. But even if we don’t, the new pickup and van offerings are incredible. The MPG claims are amazing and a real testament to the engineering prowess of the OEM engine makers.

The new safety technologies from autonomous braking to full on level 5 autonomous vehicles makes it feel like Star Wars has come to the fleet industry. The pace and speed of change is amazing. And the manufacturers are putting billions of dollars into chasing these dreams. We’re obviously still a few years or maybe a few decades away from that fully autonomous solar powered car that just emits water but some of the stuff we’re seeing already is making a big difference and should go a long way toward making your drivers safer and making our air cleaner.

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John Lovato was one of the 46 founding members of NAFA, a member of The Round Table Group (a precursor to NAFA), and a former fleet manager with chemical manufacturing company American Cyanamid.

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Author Bio

Sherb Brown

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Sherb Brown is the vice president and group publisher for BBM's AutoGroup. Sherb has covered the auto industry for more than 12 years in various positions with Bobit Business Media.

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