Every week, our news feeds are loaded with new publications, partnerships and propositions targeting Europe’s electric fleet market. My most recent find was Elexent, a new venture from Groupe Renault creating “turnkey charging solutions for electric fleets” harnessing partners across the ecosystem (Schneider Electric, Alfen, SNEF, Izivia and Solstyce). It is a strong and complementary partnership with ambitions to grow beyond the French market.
Since 2018, Delta-EE’s EVs & Electricity Research Service has monitored these propositions and it is clear that the One Stop Shop, such as the example from Elexent, is becoming the preferred approach for early adopter fleets. In this blog, I would like to explore why this is the case. We will look at the needs of an early adopter in 2020, why the One Stop Shop makes sense but how that could soon evolve again.
Who are the early adopter fleets?
This is always a difficult question to answer as there is no such thing as a “standard fleet” to mark against, but let us segment that up:
Company cars are a major focus for policymakers (we are aware of at least seven European countries with strong company car tax incentives) and corporate sustainability officers who target company car policies as some low hanging fruit.
The early adopters are the individual employees themselves, those who are keen to explore EV today and use the company car benefit as a route in for that.
The utility vehicles and cars used for business purposes only are the managed fleets, with a focus on the Total Cost of Ownership (TCO). Early adopter fleets could come from any type of business that has been proactive in finding the opportunities, but here are my top 4 types:
- Local authorities and public sector fleets. Typically mandated and supported through procurement frameworks and funding.
- Utility fleets (including energy, water and telecoms). An element of “learn it, then sell it” underpins some of their interests.
- Delivery fleets. Representing the largest fleets in most markets. Small project opportunities can equate to hundreds in EV volumes.
- SME fleets. A significant number of low volume fleets are becoming early adopters due to combined environmental ambitions and pre-emptive low emission zone compliance in cities.
What do these early adopter fleets want?
Those early to the transition desire clarity and confidence that going electric will work operationally and financially. As there is no “standard fleet”, we have not observed a “standard fleet charging” scenario either. Fleets want many scenarios for varying by vehicle and location. We visualise a few observed fleet charging use cases below:
So, how does a provider build up a proposition for such a varied set of wants? Delta-EE uses its own value chain to visualise the building blocks of a fleet proposition:
As you can see, the core values centre on delivery of the hardware and software for charging, typically at the workplace or depot. Additional values surround that core to support the transition to electric vehicles or to build a more comprehensive charging solution.
In our “Electric fleets: Analysis of the value chain” report, we found numerous European propositions occupying different parts of that chain. The proposition that occupies all of it, we called the “One Stop Shop”.
The One Stop Shop: an eMobility player’s entrance into Fleet Management.
Fleet Management is the traditional sector that has grown over the past few decades to help service the tasks of the fleet manager; to conveniently optimise assets, to keep costs low. By offering all values in the value chain, a One Stop Shop proposition becomes aligned and thus complementary to fleet management.
Why is this important? Treating your eMobility proposition as a fleet management proposition can offer you various opportunities in your business model:
- Value Proposition. Integration with existing fleet management solutions, such as software or fuel cards.
- Sales channel. Partnerships with fleet players unlocking a greater combined customer base instead of starting from zero.
In an immature market, it is difficult to specialise on one area of the value chain only: profits are prohibitive if operating in a niche of a niche. With varying customer needs, the One Stop Shop is the natural way to build value and learn for yourself, where the greatest value is in the long-term.
What next? Early adopter fleets are going to become “Energy Savvy” fleets
In the next few years, we will see most fleets consider the transition to electric, taking the steps that early adopter fleets are making today. So, what becomes of the early adopter fleet of today?
Talking with them, we hear two things about their next phases:
- We want to take the demonstration fleet from 10s to 100s.
- We have proven the operational opportunity, we now want to prove the financial opportunity (bring the Total Cost of Ownership down).
This is a signal that these are becoming “Energy Savvy”: a fleet customer interested in propositions that enable efficient and low-cost charging .
Dynamic load management, battery storage, onsite solar, V2G are among a host of energy products and services that could help a fleet manager of the future. The market in 2020 is scattered with demonstration projects testing these technologies and slowly, business models are emerging that offer the provider a sustainable source of value.
Those who can define this catalogue of energy solutions into attractive fleet management propositions will be well position to capture both the next wave of early adopters and a prospect of long-term profitability.
Want to find out more? Have a look at the EVs & Electricity Research Service page or get in touch.