Are electric utes a viable option for company fleets?

Carmakers are starting to get on board with the rollout of electric utes, although it may still be several years until they are available to order locally.

The Tesla Cybertruck, Rivian R1T, Ford F-150 Lightning and the GM Hummer EV are all electric utes that are highly anticipated in Australia.

Even Volkswagen and Kia are touting electric utes of their own, such as the reborn Scout that VW has promised for the US market.

Kia thinks it could sell 5,000 of them locally a year by 2030 if only there were the right policy settings to get South Korean HQ to commit to bringing them here.

And it would be good if it could: Without a doubt utility trucks are a major contributor to passenger and light commercial transport emissions in Australia.

In the first half of 2022, light commercial vehicles topped the list after SUVs for new car sales in Australia, and nine out of 10 of those were diesel, according to the latest data from Vfacts.

And companies could be keen to get on board, if they can make the business case for electrifying utes despite their higher ticket price (something about prices)

Fleets are already starting to transition to electric vehicles

Recent data from the Australian Fleet Management Association shows that 71% of companies that operate fleets with more than 20 vehicles believe battery electric vehicles will be mainstream by the end of the decade.

A third of the larger fleets (operating more than 250 vehicles) already operate some proportion of electric vehicles.

In fact, the larger the fleet, the more adoption of both hybrid and electric vehicles there is, underlining the fact that fleets recognise both the financial and environmental benefits to be head from using less fuel, and less costs in servicing the vehicles.

Approximately one in three Corporate Fleets now use hybrids (especially mid-sized and larger operators), with EVs also slowly becoming more integrated; this suggests it’s realistic to expect that EVs will be a mainstream solution within the next 5 to 10 years. Source: AFMA

AFMA’s data shows that since 2020, the number of hybrid vehicles in fleets has doubled. Notably, the number of electric vehicles in fleets has almost tripled.

The transition to alternative powertrains continues, with the proportion of hybrid/electric vehicles in Corporate Fleets more than doubling over the last 2 years, whilst diesel recorded a marked decline amongst passenger vehicles and SUVs.
The transition to alternative powertrains continues, with the proportion of hybrid/electric vehicles in Corporate Fleets more than doubling over the last 2 years, whilst diesel recorded a marked decline amongst passenger vehicles and SUVs. Source: AFMA

But the problem with electrifying the light commercial sector, which includes utility trucks, also known as pickups in the US – is availability.

And if the landscape for EV adoption in fleets in Australia is looking positive, if and when electric utes arrive here, will they be suitable?

Cybertruck.  Source: Tesla
Cybertruck. Source: Tesla

A US-based study looking at this suggests yes. And with AFMA confirming that there are some 660,000 utes in operation in Australian fleets, it’s an important question to ask.

Do electric utes have enough driving range for work vehicles?

Geotab’s EV Suitability Assessment (EVSA) shows that American utility truck fleets could replace up to 45% of the analysed vehicles with EVs once electric pickup trucks entered the market, potentially saving fleets millions of dollars.

Analysing data from almost 405,000 light-duty trucks (class 2, 2a and 2b, which are all utes), Geotab found that most of the electric utes currently available on the US market had more than enough driving range for fleet usage.

49% of US light-duty trucks never travel more than 280 miles (450km) in a day, the study says – less than the EPA-rated range of the dual-motor Cybertruck, Rivian R1T, Ford F-150 Lightning, GMC Hummer EV and Chevrolet Silverado.

geotab utes distance driven
Source: Geotab

And, according to data from AFMA, the majority of utes operated by Australian fleets travel less than 100km a day. Seven in 10 utes travel less than 200km a day, and just seven per cent of utes travel 400km or more on a regular basis.

fleet distances afma
Data source: AFMA

When are electric utes coming to Australia?

There are a lot of hurdles for carmakers to jump before we start seeing electric utes in Australia, unfortunately.

Because vehicle emissions policy settings in Australia en weaker than overseas, carmakers must sell EVs there first to avoid paying fines for not meeting emissions limits.

This is distinct from fuel standards which applies to the quality of fuel being burned in combustion engine vehicles.

Cell constraints and other supply chain issues are also holding back production of large battery vehicles (the heavier the vehicle, the larger the battery it needs).

As we noted in this article, there are several contenders for local introduction, and EV makers such as Rivian have noted Australia is considered a key market.

However, it will still likely be 2024 before we see a local launch of any electric ute in Australia.

Are electric utes viable for fleets?

Admittedly, when electric utes do arrive they will cost a lot more in Australia than they do in the US after currency conversion, import costs and other fees are taken into account. And, where and when and how fleets will charge are also considerations.

AFMA’s report shows that most fleets are already thinking about these things. Leaders in the field, in particular, are not only prioritising EV adoption in their fleets, but are thinking strategically about how to transition their fleets.

ev adoption fleet preparation
Leaders appear more prepared and further along in their preparations for electrification; They are not just planning to acquire vehicles, but have instead taken a more strategic approach where they carefully consider the broader implications for their business. Source: AFMA

Geotab’s report examines the question of whether electrifying utes is economical. It asks: “Do the savings on fuel and maintenance offset the premium cost of the vehicle? ”

It found that the answer to this question is it depends on how much the vehicle is used, because cost savings increase with higher utilisation.

But – and this is important in the case of utes that might carry workers and equipment to a worksite and then parked the rest of the day – it found that there is a “sweet spot”, wherein “vehicles that both drive short enough distances to be range-capable and high enough annual mileage to provide a lower TCO compared to a gas (diesel)-powered pickup.”

Geotab also determined that government fleet incentives would encourage fleets by helping to offset the higher upfront cost of electrifying fleets. A $US4,000 (around $A6,000) rebate for fleets would make 56% of electric utes break even within seven years. A $US6,500 (about $A9,600) rebate woudl increase this to 62%.

fleet ev rebates
Source: Geotab

Importantly, Geotab’s report also notes the superior capability that electric utes generally offer in terms of power and torque. There is often more storage space as well, because batteries and electric powertrains are more compact than combustion engines.

They also offer a quieter and smoother ride, increasing comfort for drivers and workers. And let’s not forget the ability to power tools (and other devices!) from the battery without idling the engine. Coffee, anyone?

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