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EV expansion's impact on electricity costs

Aug. 1, 2022
Electric vehicle adoption will strain the power grid. Fleets must consider new fuel cost accounting paradigms as adoption ramps up steeply this decade.

The transition to electric vehicles (EVs) is underway for personal and corporate use. According to the International Energy Agency, the number of new electric car sales is expected to rise to over 60% by 2030, compared with only 4.6% in 2020. For the fleet industry, a Wood Mackenzie analysis expects the number of electric trucks on U.S. roads to jump from over 2,000 in 2019 to over 54,000 by the end of 2025.

There is no doubt that electric trucks will be a game-changer for fleets. Although there is a long way to go, avoiding the topic is not a wise approach. There are many considerations the industry must take into account regarding electric trucks. A potentially overlooked one is the effect a surge in EVs may have on electricity usage costs from utilities.

See also: Charging ahead on infrastructure

To change charging habits, utilities may incentivize drivers to charge electric trucks at off-peak times. These times will vary depending on location. In many areas of the U.S., charging overnight is the most cost-effective option since that is when usage is at its lowest. However, if the utility resides in a state such as California, which is over 25% reliant on solar power, heavy overnight charging could overload a system reliant on daylight for energy. Utilities in those locations may opt to charge lower rates for daytime charging instead.

Fleets crossing state lines will need to take careful consideration when budgeting fuel costs. Each of the thousands of utilities in the U.S. operates slightly differently with regard to rate structure, time-of-use rates, and demand charges. As a result, fleets must assess the most cost-efficient approach to location and time of day for charging, requiring greater oversight from managers and finance staff.

Fortunately, fleets still have adequate time to adjust to the power grid to avoid brownouts and blackouts due to power surges from an increase in EVs. According to a Bloomberg New Energy Finance report, there won’t be a significant impact on the electrical grid until 15% of the vehicles on the road go electric. Even so, now is the time to start researching and planning for the changes to come with EVs.

Jane Clark is vice president of member services for NationaLease. In this position, she is focused on managing the member services operation as well as working to strengthen member relationships, reduce member costs, and improve collaboration within the NationaLease supporting groups. Prior to joining NationaLease, Clark served as area vice president for Randstad, one of the nation’s largest recruitment agencies, and before that, she served in management posts with QPS Cos., Pro Staff, and Manpower Inc.

About the Author

Jane Clark | Senior VP of Operations

Jane Clark is Senior Vice President, Operations for NationaLease. Prior to joining NationaLease, Jane served as Area Vice President for Randstad, one of the nation’s largest recruitment agencies, and before that, she served in management posts with QPS Companies, Pro Staff, and Manpower, Inc.

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