Analysis
14 Mar 24

LCV Expert Day: Telematics and Electrification go hand in hand

While the passenger car market has already encountered the initial hurdles in the electrification process, the LCV sector is just getting started. The desire for a more sustainable LCV fleet is present, and during the Fleet Europe LCV Day, the challenges and potential solutions were eagerly discussed.

Last year, Fleet Europe organized the first LCV Expert Day, an event specifically focused on the commercial fleet market, in collaboration with Sortimo. This year, over 120 stakeholders found their way to the second edition, held at the Van der Valk Airport Hotel Brussels. It demonstrated the need for fleet managers to discuss, share, and find solutions to the specific challenges of this market. The theme: Clean and Lean Commercial Fleets.

The kickoff on Tuesday evening set the tone: during the meeting of the LCV Advisory Board, consisting of managers from buyers, leasing companies, and other stakeholders, the key topics were already put on the table. From the strategic ("How quickly should I electrify without compromising business?") to the practical ("The current charging infrastructure is not suited for LCVs weighing 7.5 tons"). 
Notably, all stakeholders present agreed that both the market and the government have roles to play. There's a need for early adopters in the market, and the government must implement a well-thought-out incentivization strategy to make investing worthwhile.

2 ICE’s for 1 EV

On the event day itself, data specialist Marc Odinius kicked off with an analysis of the numbers. They look promising: thanks to a 50 percent sales increase in 2023, the e-LCV market share has risen from 5.4 to 7.5 percent in 2023. Odinius pointed out that the increasing number of cities implementing diesel bans favors electric LCVs; however, the prices are still too high, maintaining the notion of "two ICE's for 1 EV."

Of the LCV Expert Day participants, 75 percent have electrified only a maximum of 10 percent of their LCV fleet, a poll showed. 30 percent of participants expects that by 2030, 3 on 4 LCV's in their fleet will be electric, and 14 percent belevies the total fleet will be electric by then. This energy transition is very hard to obtain considering the topics to be resolved, like the high prices, low range and inediquate infrastructure.

Odinius also shared a striking conclusion: among all car manufacturers, Stellantis currently leads the e-LCV market. While OEMs still emit on average 15 percent more CO2 than the 2025 guideline, Stellantis stands at 6 percent. 

No turning back

In a follow-up panel discussion, Kim Stenberg (Vestas Wind System), Marijn Slabbekoorn (DHL Express), and Pieter Vermassen (Fluvius) addressed the main challenges for fleet electrification: ensuring sufficient power for seamless charging (Slabbekoorn mentioned restrictions in the Netherlands to use the grid for EV charging in the afternoon and evening), the right EV charging infrastructure (current setups at charging platforms block multiple facilities for large LCVs), and a lack of clear and long-term legislative measures that hinder rather than stimulate the adoption of eLCVs. The high purchase price is also an obstacle, although Slabbekoorn pointed out that the business cases for eLCVs and the related Total Cost of Ownership (TCO) are more attractive than for their diesel counterparts. One major issue for eLCVs is that a higher range means a higher weight, compromising cargo capacity.

But there's no turning back, so the challenges must be addressed, also internally. "Today I am more a change manager than a fleet manager," said Stenberg. "We have the advantage that our vehicles mainly drive over wind turbine parks, so range is not an issue." Nevertheless, only 10 percent of the fleet is currently electric. "By 2030, it must be 100 percent."

Vermassen from the Flemish network operator Fluvius acknowledged that current grid congestion is hindering developments. "It's very important to get in touch with the network operator to define the grid capacity needs as soon as possible when implementing your strategy.” He also pointed out that “It's not possible and it will not be possible to reserve a grid. We see many irrational requests. People have no idea what they need to charge their fleet."

Long live telematics
With the absence of a higher range (which, according to the attending fleet managers, should be at least 400 kilometers in winter), the role of telematics is more crucial than ever. A survey of the audience revealed that 20 percent of fleet managers present have not equipped their fleet with telematics applications, while a similar percentage has equipped around 70 percent of their fleet with telematics. However, everyone recognized the utility and necessity of telematics.

Fabian Seithel, recently promoted to Associate Vice President Last Mile (LCV) Sales & Business Development EMEA at Geotab, and Craig Allan from ABAX highlighted the benefits of telematics. These include fleet safety management; knowing where and how a vehicle is driven allows for risk assessment and reduction. "People drive better when they know they are being watched – and straight to the right place. This lowers the number of accidents and saves fuel," Allan noted.

With the increasing number of eLCVs, being able to plan an ideal route – considering the range – is even more critical. You can also analyze which routes are suitable for an eLCV and which are not. Additionally, CO2 reporting is becoming increasingly important, and it's easy to extract from vehicle fleet data. Seithel hinted at the fleet manager's life becoming easier with the introduction of AI through Geotab ACE, allowing for targeted questions like "What was the fuel consumption last month?" and other focused analyses.

During a panel discussion, fleet managers Eva Lestang (ArcelorMittal), Saban Tekedereli (Securitas) and Ben Verey (Otis) provided insights into how telematics works for them. Tekedereli emphasized, "Implementing telematics is not only about implementing hardware and software but also a change of culture. Show people the benefits of using telematics and don’t solely focus on the benefits for the company." 

EU: harmonizing data is key
The importance of data availability and harmonizing this data is also high on the agenda of the European Commission, as Axel Volkery, EU Commission head of unit sustainable support, explained. He was present to shed light on the legislation regarding reducing CO2 emissions and to emphasize the need for incentivizing measures.

"The emissions from transport and logistics are now 19 per cent higher than in 1990. Luckily, we see a rapid growth in zero and low-emission vehicles, but we also see that the LCV market is far behind the passenger car market in this sense," Volkery stated. "The EU can support this, but only to a certain level. For example, by realizing more harmonization in data, so that, for example, there is good communication between a car and a charging point, ensuring you always have the right information."

However, Volkery admitted a lack of information. "We don't have up-to-date info on speed limits, to give a simple example. Also not on construction sites and road damages. They are important for more efficient transport." He also mentioned that the EU government can manage power capacity but not the number of stations or the opportunities of battery storage and vehicle-to-grid options. He expressed his desire to understand the day-to-day problems facing LCV fleet managers, both strategic and practical. "I very much like the conversations with the market, so I know firsthand what the challenges are," he concluded, leaving with an invitation for the upcoming LCV Advisory Meeting and next edition of the LCV Expert Day.

Smaller and lighter
Throughout the day it became clear that the LCV market is on a verge of a breakthrough in electrification. The demand for new and more suitable eLCVs is increasingly being answered by suppliers. Kia showcased its ambitions in this market with its PBV strategy and a first model to be commercialized in 2025, while Ford, Opel, Toyota, Fiat and Sortimo displayed some of their latest eLCV models and technologies on the outdoor grounds.

One question remains: what role does the main sponsor, vehicle outfitter Sortimo, sees for itself in greening the LCV fleet? CEO Reinhold Braun: "Electric vans require a different setup than ICE vehicles. Just think about the fact that the materials we use must be lighter and that everything we do is to maintain range and stay productive and safe. And with the trend towards smaller vehicles, making efficient use of space becomes even more critical. But we’re ready to tackle these challenges."

 

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Authored by: Luberto van Buiten