Sustainability: A Fleet Progress Report

Alt-fuel and alt-power commercial vehicles in a parking lot at an exposition.

Fleets have more choice in alt-fuel and alt-power vehicles than ever before, yet the market is entering “peak complexity” in terms of making the transition. 

The expanding ability to collect data is merging with the need to report that data to demonstrate decarbonization and greenhouse gas reduction efforts. This data and its analysis increasingly appear in annual reports generated by various stakeholders in fleet and transportation.

Here, we’ve collated five recent studies that collectively reveal the major factors driving fleet decarbonization — and holding it back. The studies are from Geotab, TRC (producers of the ACT Expo), fleet management companies Wheels and Merchants Fleet, and the City of Long Beach.

This is not meant to be a comprehensive overview of each study. Rather, it delivers key data points and takeaways to inform fleet readers of general market developments and direction.

Geotab’s 2024 State of Commercial Transportation Report

Released in April 2024, Geotab’s 2024 State of Commercial Transportation Report gathers insights from telematics data from Geotab-connected vehicles to look at industry trends through performance metrics.

  • One takeaway from this report is that fleets are adopting a “small steps for big change” approach, which re-recalibrates emissions goals to measurable and transparent with current technology, supply, and infrastructure.
  • To advance sustainability initiatives, companies must demonstrate a return on investment, and present a practical roadmap outlining actionable steps.
  • The average age of vehicles across all classes in Geotab’s system is increasing.
  • Geotab’s report notes a slight decrease in fuel economy across various vehicle classes from 2022 to 2023. This could result from maintenance expenses due to the increasing age of vehicles.
  • Geotab observed an 8.5% reduction in emissions intensity (Kg CO2/mile) across all heavy-duty vehicles in 2023. (editor’s note: Defining emissions intensity is a metric used in trucking that will work its way down to the other classes.)
  • The report cites industry upheaval related to the consolidation of fleet management companies last year and a reconfiguration of fleet managers’ operational responsibilities, particularly the amalgamation of fleet management with procurement departments.
  • The trend towards shared vehicle ownership may not be as pronounced as Geotab predicted, indicating more gradual adoption.
  • Regarding technology adoption, generative AI is “the showstopper” and is developing at “breakneck speed.” Geotab uses AI in its predictive safety score, which uses behavior data and machine learning to assess the probability of a collision per million miles driven.
  • Geotab-connected fleets saw a decrease in average daily trips year over year by 1.88% while also seeing a decrease in average daily vehicle operating hours by 1.84%, meaning those vehicles achieved a higher output with fewer vehicle operating hours.
  • Geotab-connected vehicles in the U.S. reduced idle times by 3.75% from 2022 to 2023, while vehicles in Canada saw a 5.73% decrease in idle times.
  • To maximize the value of data, the report cites the need to establish standards for connected vehicles and sees 2024 as a year of progress in that regard.
  • In the U.S. a record number of 1.2M EVs were sold in 2023 — but that pace is slowing. Fleets are confronting the intricacies and time constraints associated with the adoption of EVs amidst escalating inflation.
  • The average price of EV batteries is expected to fall over the next few years, and the availability of vehicle options continues to rise. EVs are approaching price parity with gas vehicles, which is predicted to happen as early as 2024 in Europe.
  • On the commercial side, EV adoption is supported by government mandates, incentives, and large enterprise sustainability commitments.

State of Sustainable Fleets 2024

Released in conjunction with the ACT Expo in May, State of Sustainable Fleets 2024, by TRC Companies Inc. analyzes trends in clean commercial transportation’s vehicle, fuel, and infrastructure segments. It relies on outside data, interviews, and responses from about 200 fleets to an industry-wide survey.

  • The TRC report notes the renewed adoption of natural gas vehicles across various medium- and heavy-duty fleet sectors, including refuse, public utility, regional long-haul, transit, cargo, and municipal fleets. The report underscores the role of renewable natural gas (RNG) and renewable diesel (RD) in driving this adoption. Compared to electrification, RNG and RD are more cost-effective, relatively easier to implement, and offer a negative carbon intensity in states like California.
  • The brief also reveals a shift in RNG usage. While fewer fleets utilized RNG in 2023 compared to 2022, the ones that did used it more extensively, especially within the refuse and goods movement sectors. The brief said this signals a deepening commitment to RNG for fleets already using it.
  • Medium-duty BEV adoption increased significantly: 26,000 commercial EVs (buses, trucks, and vans) were delivered in 2023, doubling the previous year.
  • The sectors with the highest early EV adoption rates are shuttle fleets (80%), followed by municipal (63%) and urban/last-mile delivery fleets (60%).
  • According to the report, electric cargo vans and pickup trucks accounted for 90% of new on-road BEVs. Ford and Rivian have 95% of new registrations between them.
  • The report anticipates significant growth in BEV demand from states with zero-emission mandates. School buses are expected to see substantial growth in electric vehicle adoption due to state mandates and the favorable outlook of incentives and regulations.
  • Government incentives for any type of alt-fuel or alt-power are still crucial to drive adoption. Private utilities continue to represent the fastest-growing segment of new funding as they launch programs to incentivize EV charger installation.
  • Fleets purchased 7% more diesel trucks in 2023 than the previous year. Fleets saw a drop in diesel prices to $3.32 per gallon. Meanwhile, they face an estimated 12% increase in a new diesel truck’s price due to the EPA’s looming 2027 emissions standards.
  • The industry is entering a “peak complexity” period in transitioning to sustainable fleets in operations and navigating new emissions regulations. Those include the EPA’s Phase 3 GHG emissions standard and California’s Advanced Clean Fleets (ACF) and Omnibus Low NOx rules. In addition to California, eight other states have adopted some combination of Omnibus, and 10 additional states have adopted ZEV requirements on manufacturers.  
  • Class 8 tractors powered by hydrogen fuel cells finally hit the market in late 2023 and into 2024. However, the price of hydrogen nearly doubled in 2023 to as much as $36/ kg in California. Massive federal investment in hydrogen is on the horizon, including $7 billion to fund fuel production and distribution hubs. It will take several years before these hubs will be operational, when they can positively impact fuel price and supply.

Merchants Fleet 2023 Impact Report

Merchants Fleet 2023 Impact Report, released in May 2024, covers the sustainability initiatives and achievements of Merchants Fleet and its clients.

  • In 2023, Merchants Fleet saw a 65% annual growth in clients’ EV fleets; 85% of these fleets are battery-electric vehicles, and 15% are plug-in hybrid electric vehicles.
  • Of Merchants’ internal executive fleet, 100% is electric.
  • All EV charging at Merchants’ campuses is powered by solar energy through local Solar Renewable Energy Credits (SRECs).
  • In 2023, Merchants Fleet increased its spending with diverse suppliers by 15% to $43 million.
  • 78% of Merchant’s preferred corporate vendors are local, small businesses, and/or diversely owned.

Wheels Sustainability Benchmark 2023 Report

Released in September 2023, Wheels Sustainability Benchmark 2023 Report analyzes sustainability trends and practices within fleet management, based on a survey of 94 clients from various industries and regions.

  • About 83% of respondents (Wheels clients) manage fleets of 1,000 or more vehicles. Respondents manage fleets across various industries, fleet sizes, and functional roles. 47% of respondents are based in North America, 26% in Australia, 23% in Europe, and 4% in Asia Pacific.
  • 58% of respondents have a sustainability-related goal for their fleets.
  • While several respondents aim for a zero-emissions fleet by 2030 — a common target —others have targets of 25% of vehicles being EVs by 2025 and a 35% CO2 reduction by 2025.
  • In both 2021 and 2022, the percentage of fleets actively using sustainability solutions was 14% and 15% respectively. In 2023, this percentage jumped to 21%. For fleets in an earlier stage — “in the process of implementing sustainability solutions” — the percentage jumped from 24% and 25% in 2021 and 2022 to 30% in 2023.
  • Regarding data reporting, CO2 emissions and greenhouse gas (GHG) emissions are the top metrics shared with stakeholders.
  • Respondents cited telematics — optimizing routes and monitoring driver behavior — as another impactful alternative for those unable to switch to EVs immediately.

State of Fleet EV Transition, Long Beach, California

The City of Long Beach, Calif., State of the City Fleet’s EV Transition report, released in April 2024, updates the progress of the City of Long Beach’s fleet transition to zero emissions through EV adoption.

  • Today, 57% of the fleet uses alternative fuels, displacing over 1 million gallons of fossil fuel annually.
  • The city has 91 fully electric vehicles with 10 dedicated charging ports, focusing on the Ford F-150 Lightning and E-Transit vans.
  • The report estimates that 525 medium- and heavy-duty trucks in the fleet will be affected by CARB’s ACF regulation.
  • Currently, the city has 107 Level II ports, 1 Level III fast charger port, and 12 Level II solar charger ports. The goal is 350 ports by the end of 2025.
  • The city has secured $10 million in grants over the past four years. The report estimates that by 2035, it will need $34 for additional infrastructure.
  • EV replacement vehicles cost 25% to 40% more than traditional ICE vehicles.

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