Navigating through these challenges is difficult, but essential in today’s environment.

It could be argued that today’s operating environment is one of the most challenging fleet managers have ever had to contend with. Three of the biggest issues many of us are facing are EV mandates/legislative requirements, a shortage of qualified staff and soaring operational costs.

On the EV front, regulations and mandates that have been put in place over the last several years are now clashing with reality. For fleets, among the biggest issues are the fact that many regulations pushing for the adoption of EVs simply aren’t practical or achievable in the timeframe laid out via the regulations. In California, which currently represents the front line for EV mandates/adoption, the costs in transitioning to electric vehicles are proving prohibitive in many cases, and the money simply isn’t there to make it happen.

Charging considerations

Additionally, infrastructure challenges are becoming more acute, particularly when factoring in new employees, corporate policies related to fleet vehicle utilization and available real estate. Even for us at General Mills, many of our newest hires don’t own their own homes and tend to rent apartments, condominiums, or even live in Airbnb style accommodation. This means that they often don’t have access to consistent and reliable charging locations, meaning that providing them with the use of a company EV often doesn’t make sense, since range limitations make it impractical to use them on a consistent basis.

Additionally, employee turnover means that vehicles are often switched from one staff member to another. With an EV, an added complication is whether or not that new hire has access to a charging facility and, if they don’t, are you going to provide them with an ICE loaner or rental vehicle until they do? Furthermore, many fleet managers need to consider how much real estate they have available for employees to park and charge their vehicles.

Additional parking

And if EVs aren’t practical for them to take home every night, you’ll need to provide parking for their own vehicles, which can prove very costly depending on which market or region you operate in. Also, from a total cost of ownership standpoint, you have to decide whether EVs really make sense. We’ve seen a scaling back in EV incentives this year and with rising operational costs, and pricing that still isn’t competitive [especially once incentives are removed] does it really make sense to acquire them on a large scale? More and more we’re seeing fleet managers perform EV readiness surveys—trying to understand what the real opportunities and benefits are before making any decisions. While there is no denying that battery electric vehicles have their place, they don’t suit every fleet and every application, which is something fleets really need to consider before committing to any kind of large-scale EV adoption.

Higher rates

Another factor is cost. Today many fleets, including ours, are having to contend with leasing and financing rates that are significantly higher than what they were just a few years ago. For larger fleets, this alone can add millions of dollars in additional expenses, straining budgets and operational objectives. This can make EVs a harder sell, particularly using traditional operating models where vehicle replacement cycles last every 2-3 years, since the higher price point and additional costs will require many fleets to extend these cycles to five years or more, impacting residuals and resale values. Higher operating costs have also impacted maintenance and repair programs, for example, many fleets are choosing to forego small, cosmetic repairs to their vehicles, due to higher labour and material costs.

Today it’s about finding as many savings as you can, though doing so properly requires very careful consideration, not only in vehicle acquisition, maintenance and repairs, but also when it comes to employees.

Recruitment considerations

The aftermath of the COVID-19 pandemic has seen many businesses struggling to find employees, and we’ve seen many fleets adjust their hiring policies, such as lowering the age requirement for new drivers. Yet, considerable care needs to be taken here. Candidates still need to be properly vetted to ensure they are qualified to operate your vehicles safely and efficiently. And while many fleets run the risk of having potential hires seek another job out because of a lengthy vetting and approval process for new drivers, it’s important to remember that safety comes first and liability is something to be avoided at all costs, regardless of the current economic and operating environment.