Written Evidence submitted by Geotab (EVP0139)

About Geotab

Geotab is a global leader in IoT and connected vehicles. Our open telematics platform empowers businesses (large and small) and the public sector to manage their fleets and leverage data, boosting productivity, fleet optimisation, safety, compliance, sustainability, and their ability to expand. Our telematics platform supports the largest range of EV makes and models available including passenger, light to heavy goods vehicles and buses. We are consistently expanding coverage via a dedicated energy and EV research team in North America and a reverse-engineering facility in the UK. This data informs the decision-making processes of our customers to switch their fleets to EV and manage those fleets effectively but are also committed to leverage our insights to support public policy making.

Executive Summary

Responding to the Call for evidence

Our response specifically focuses on the following two parts of the call for evidence:

●        “The feasibility, opportunities, and challenges presented by the acceleration of the ban of the sale of new petrol and diesel vehicles to 2030.”

●        “The actions required by Government and private operators to encourage greater uptake of electric vehicles and the infrastructure required to support them.”

The 2030 target is welcome but short-term thinking needs to be avoided

As the UK rebuilds itself from the ongoing impacts of the COVID-19 pandemic, electric vehicles (EVs) will play a key role in decarbonising the economy and meeting air-quality targets. Indeed, we have already seen an indirect effect of the pandemic with a broad shift in consumer preference, away from conventionally fuelled vehicles and towards those that are alternatively fuelled. Figures from the Society of Motor Manufacturers and Traders (SMMT) show that YTD through to the end of 2020, registrations for petrol (39%) and diesel (-55%) cars were down, while demand for battery electric vehicles (BEVs) increased by over 185%.  However, market shares are still small. For the same period, BEVs accounted for just 6.6% of all new car registrations. This is partly due to the current high price of pure-electric models for consumers but also a range of real and perceived barriers.[1] 

In this context, the Government’s setting of the 2030 target will act as a welcome catalyst for change which is further supported by the emergence of Clean Air Zones and a greater availability of electric vehicles. However, there is a clear risk that the 2030 target leads to a reactionary, short-term push to simply meet the target and a premium should be put on developing and implementing an EV policy that looks beyond 2030. Adopting a data-driven and informed telematics-led approach to the EV transition will help to make the right decision now and engender a truly sustainable shift to EVs. 

The UK’s EV policy should look beyond 2030 and encourage proactive long-term take up of pure-electric vehicles

Public and Private Sector Fleets are crucial in achieving the target

While a lot of the public debate has focused on consumer attitudes and uptake in relation to EVs, it is public sector and private sector vehicles fleets that will be crucial in accelerating the transition and meeting the 2030 target. The reasons for this are two-fold; i) Public and private sector fleets account for a significant part of overall vehicle sales (56%) and ii) they also are an essential driver of the second-hand sales market[2]. With fleet replacement cycles of 3-5 years, this means that significant gains can be made by encouraging fleets to shift to EV as quickly as possible:

1.       Without the correct incentives, fleets could go through 3 procurement cycles before being forced to make a rushed switch; and 

2.       The availability of EV in the second-hand market will significantly increase and thus boost the affordability and accessibility of EVs for consumers. 

Enabling the early transition of fleets should be a clear focus to tap into shorter procurement cycles and increase the availability of EVs in the second-hand market. 

Fleet-specific policy decisions are needed

Fleet decision makers in the public and private sector tend to share a wide-range of concerns with general consumers, but there are also specific nuances that make the fleet sector a unique case. 

A study that we conducted with UK fleet decision makers in 2019 suggests that high vehicle cost is the biggest hindrance to adoption (32%), followed by long charging times (29%) and a lack of availability of medium to heavy EV models (29%). Conversely, the following points were found to be the main motivators for fleet managers:  improvement to charging infrastructure (41%), improved OPEX (39%), better understanding of benefits (38%).[3] 

More recently we carried out a survey with fleet decision-makers across Europe which suggest a company’s wider corporate sustainability targets (76%) and the current/future regulatory environment (45%) are key motivating factors for fleet managers. Crucially, only 16% of respondents reported that their corporate sustainability strategy mandated a clear percentage goal for electrification with most strategies merely referring to broader CO2 reduction targets.[4] 

Aside from demonstrating that Government policy can play an important role in driving behaviour, UK policy announcements so far clearly address some of the existing pain points, e.g. the Workplace Charging Scheme, plug-in grants and other financial incentives will help to tackle the cost barriers.

However, more could be done to:

-          Reduce the complexity of switching to EVs and managing mixed or purely electric fleets;

-          More focus to address the human element of EV transition and truly maximise the benefits by looking at the whole system rather than like-for-like replacement; and 

-          Integrate efforts to electrify the transport system with other initiatives such as smart cities. 

Reduce complexity to limit short-term thinking and business-as-usual attitude

Tackling the transition of fleets to EV is a complex endeavour. Cost pressures, especially in the public sector, combined with a fuzzy understanding of the benefits of EVs, might encourage a reactive rather than proactive attitude to the EV transition. This could either delay adoption or lead fleet managers to carry out a simple, seemingly like-for-like switch (e.g. a diesel van is replaced with the corresponding EV model) without, however taking into account that the payload or load space might have changed. Geotab offers a data-driven EV Suitability Assessment which can help with reducing the complexity by leveraging existing fleet data to understand which vehicles are range capable and offer a competitive total cost to move to electric. There is also a wide range of bodies and groupings active in the sector. Industry bodies have started to actively promote knowledge sharing and training, while the Government has provided support to organisations such as the Energy and Savings Trust to support the transition.[5] However we still believe that more could be done to share best practice and take the guess-work out of the transition process by better utilising data to ensure that the various types of vehicles can switch to EV as soon as possible.

While the ecosystem around the EV transition is developing rapidly with a range of public and private bodies playing an active role, it will be important to ensure that any advice and recommendations take a long-term view are guided by strong evidence and data.

New management approaches are needed to fully utilise the benefit of EV

Information from our customer base and the EV Sustainability Assessments that we have carried out suggest that the majority of fleets will initially only be able to switch some of their vehicles to electric, while others still need to be run on combustion engines due to the specific use cases for those vehicles. As more capable vehicles become available, this will change but what is clear is that the systems that public or private sector bodies use to manage their fleets need to be fully capable to manage these new vehicles. 

Traditionally fleet management and telematics solutions have put a strong focus on maintenance with fuelling playing a less important role. With electric vehicles, this is flipped on its head as fuelling (or ensuring the vehicle is ready for the next day or task) becomes the primary focus with maintenance being less of an issue due to fewer moving parts etc. Additionally, the management of electric fleets benefit significantly from route optimisation (in order to minimise onroute charging) and increased utilisation of EV (to fully utilise cost savings[6]) and, in the medium-term, there is a need to manage battery degradation as well. 

These extra requirements need to be recognised in procurement decisions and can come with additional costs but unfortunately, we have seen a number of public sector procurement exercises where fleet management solutions were chosen that were competitive on price but not fully capable of managing mixed or fully electric fleets. In these cases, the short-term procurement savings are unlikely to outweigh the long-term costs of not being able to fully manage a fleet. Financial support from Government is currently focused on the infrastructure element of the EV transition and we would like to see a greater emphasis being put on whole systems approach, including the management of electric vehicles and mixed fleets. 

Government should set out guidance to ensure that public sector procurement exercises for fleet management systems prioritise the capability of managing mixed and fully electric fleets. In addition, Government should consider making available grant funding or other financial support to ensure that public (but also private) sector bodies do not compromise their electrification efforts by utilising outdated fleet management solutions. 

Technology is important but the human element should not be forgotten

The debate around EV transition rightly focuses on technology, costs and the environmental benefit, but we should not ignore the human element. This is not only important for the initial adoption, but also for the subsequent use of electric vehicles. Similar to how the COVID pandemic has forced a change in how we work, the EV transition will force a change in how we travel for work (and privately). While the availability of rapid chargers is increasing, charging an EV will not be the same as filling up an ICE car at the petrol station and this puts a stronger focus on how we drive. Some behaviour change is required, and more attention should be given to enable fleets (but also members of the public) to readjust. Some of the key factors that play a role here include general driving habits, load (passengers or goods), outside temperature, topography and seemingly minor factors such as tyre pressure. This again highlights the fact that the transition to EV will only be successful if we adopt a whole system approach that takes account of the driver as well as the underlying technology.[7]

Driving instructions and tests as well as publicly available training resources should be updated to prepare drivers as early as possible for the different skills and behaviours needed to get the most of an EV'

The EV transition can unlock additional benefits if managed smartly

By considering the whole system, rather than just individual ICE vehicles that need to be switched to battery power, the EV transition could help to unlock further benefits. For example, ongoing smart city initiatives could be linked to the public and private electrification programmes, leading to traffic optimisation, safer roads and further environmental benefits. There is also room to better enable the sharing of vehicles within fleets and publicly instead of going for a like-for-like replacement of existing cars. As in many other areas, this, however, requires a greater level of planning and a sophisticated use of available technology and data. 

The public sector can lead by example and integrate electrification with smart city and car sharing programmes. 

Supply chain issue might delay the EV transition

In addition to the very EV-specific barriers such as cost or range/charging anxiety, there is another potential barrier that should be considered when looking at the challenge of the 2030 target and that is the issue of supply chains. We already have seen incidents where some large private sector fleets in the UK had to downscale and delay their planned electrification programme due demand outstripping the current supply and there is a risk that this will continue to delay the transition. A number of factors play a role in this, including the increased interest in EV, COVID and Brexit implications as well as global trade concerns. However, this area is a real risk, especially as cars are becoming battery operated and more reliant on semi-conductors and electronics than steel. 

Conclusion

Data and telematics can play a vital role in putting in place a sustainable EV-policy that looks to 2030 and beyond. It should incorporate a larger role within the current policy discussions than it does today as part of the need to address the whole system approach. In addition to this submission, Geotab would be happy to provide further insights to the Committee. 

March 2021

Endnotes