Fleet operators take a shine to electric vehicles — study

Author

Colin Velez
July 24, 2024

Although electric vehicle sales are rising slower than manufacturers may have hoped, they are gaining momentum in one surprising area: the fleet segment.

Why this matters: Fleet vehicles are typically utility-focused, emphasizing practicality over other areas so that businesses can scale their operations affordably. EVs, on the other hand, with their limited driving ranges, susceptibility to weather and lack of adequate charging infrastructure, seem to be the exact opposite of what a typical fleet customer would want. This makes their early successes in the fleet segment fascinating to see, even if it’s still much too early to know if this reflects a broader trend.

EV sales expected to rise quickly in the fleet segment:

  • According to Cox Automotive, 14% of fleet customers operated EVs during the first quarter.

  • While that might not seem like a lot, this is higher than the overall EV market share (roughly 8%) for the period. Plus, data suggests these car owners are not only happy with their purchase but that the market for EV fleets is due for rapid growth.

  • Eighty-seven percent of fleet owners surveyed by Cox Automotive expect to purchase an EV within the next five years. That number rises to 90% among those who have already acquired an electric car, meaning the segment is seeing a healthy supply of both new and repeat customers.

What’s driving these sentiments?

First, it seems like EV fleet operators are spending less on vehicle maintenance than others. Almost half (48%) of survey respondents who worked with both gas and electric vehicles said they were more satisfied with service costs for EVs, compared to the 27% who were more satisfied with ICE cars. Meanwhile, 24% said the two were roughly the same.

Ratings of vehicle usage/capabilities and total cost of ownership saw similar differences between ICE and electric cars. Thirty-five percent of survey respondents said they were more satisfied with the costs of owning an EV, compared to 29% of those who said gas-powered cars were cheaper. And EV usage/capabilities received favorability ratings of 33% compared to 24% for ICE.

Overall, 41% of respondents were more satisfied with their EVs, leaving 24% more satisfied with ICE and 35% who felt both vehicles performed the same.

Additional context: There are still drawbacks to EVs which are preventing more fleet operators from making the switch. Lack of charging remains a critical roadblock for potential fleet customers, as does battery degradation and a lack of model choice compared to other segments. EVs also aren’t being used the same as ICE vehicles: fleet drivers are taking notably shorter trips when using an electric model, saving long hauls for gas-powered alternatives.

Bottom line: While EV demand is rising, mainstream adoption remains limited among consumers because of challenges such as range anxiety and slow infrastructure growth. But if fleet owners continue to push for more eco-friendly models, we could soon see this dynamic change.

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