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Why EV fleet transition is essential for transport decarbonisation
In this episode we discuss how and why fleets must transition to EV in order to help accelerate the wider decarbonisation of transport in the UK.
With the recent release of the much anticipated Transport Decarbonisation Plan (July 2021), the government will lead by example by bringing forward a commitment to electrify its own fleet of cars and vans from 2030 to 2027. Reducing the emissions from fleets could make a very significant dent on the emissions we produce on the overall transport sector in the UK.
This episode features David Borland, EY’s UK&I Automotive Leader, and guest speakers Russell Fowler, Senior Project Manager for Transport Decarbonisation at National Grid. They discuss why fleets are such an important element of transport decarbonisation, and how they can make the transition to EV.
In the second part of this episode we also meet featured guest speaker Carla Detrieux, Director of Business Development for Volta Trucks, who discusses the company’s rapid upscaling and what makes it stand out from the crowd.
The episode explores the following:
- The significance and importance in the reduction of overall emissions produced by fleets, in the larger scale of overall transportation decarbonisation.
- The benefits and key factors fleet buyers are considering in their transition to EV, and the key drivers for sustainability.
- The need to consider other innovations and solutions for fleets in order to reduce volume as well as emissions and the different use cases for hydrogen and biofuel mix.
- The switch to renewable energy and the importance of considering the impact of emissions all the way down the value chain, through lifecycle analysis.
- Considerations for the next step in the fleet sector, and the need for awareness, communication and education in order to accelerate fleet transition across to EV and other zero emission solutions.
Learn more about the EV Y Podcast.
Ade Thomas (host):
Welcome to EV Y the eMobility podcast that asks the bigger and better questions of the EV industry. Hello, and welcome back to the EV Y podcast. The eMobility podcast series that dives deep into the eMobility sector. I'm your host, Ade Thomas, and every week I'll be talking to experts in the field to understand more on the what the how and crucially the why people are involved in the industry. Today's episode is all about the crucial topic of fleets with over half of new road going vehicles purchased by fleets. Their influence on the automotive market is huge. And today we're asking the question, why is transitioning fleets to EV essential for transport decarbonisation. Particularly pertinent today in the UK with the government having released its transport, decarbonisation plan this July with a commitment to transfer all of the government's 40,000 strong fleet to zero emissions vehicles.
Ade:
To help answer that question I'd like to introduce our guest speakers for today. Firstly, from EY, David Borland, David is EY's UK and Ireland automotive leader with extensive experience in the space. Having worked across the value chain, OEMs, suppliers and dealers. And our featured guest is Dr. Russell Fowler, senior project manager for decarbonisation of transport at national grid. Russell works across all areas of transport from EVs to aviation. David, Russell, thank you very, very much, indeed, for joining us today. To start off, I'd like to ask you both why you're in the eMobility sector. David, what drew you into this area?
David Borland (EY):
Thank you, Ade. And it's great to talk to you and Russell today. So you mentioned already that I've spent most of my career working in the automotive sector, either at manufacturers, suppliers or dealers. And a few years ago, I had the chance to think about what I wanted my next step to be in my career. And I was actually thinking of moving away from the automotive industry. I checked myself a little bit and thought now is actually probably the perfect storm of the times to be in the industry. It's so interesting with everything that was happening before the pandemic, pre COVID with changes toward connected vehicles, electric vehicles, autonomous vehicles, and shared mobility. And I just thought, "Actually no, this is a really good time to be in, to stay in the industry, to work in the industry and to move into the eMobility space as well." So hopefully leveraging some experience that I have, but moving into a brave new world in terms of what the future holds for all of us.
Ade:
Thank you very much, indeed David. And just a quick follow up question, was the sustainability narrative one that particularly interested you in your decision to remain in the automotive sector?
David:
I think sustainability was one of them, for sure. I think the combination of probably sustainability, technology and how important that's become as well in the world that we live today and do business. So probably a factor of a few things coming together, Ade.
Ade:
Thank you very much, indeed. Thanks for those opening thoughts and some insights into your thinking. Russell, over to you. Russell, what about you? What brought you into this sector?
Dr Russell Fowler (National Grid):
That's a great question. I've been thinking about this and listening to that, and I'm an academic by the start of my career. So I have a degree in mathematics and the doctorate you referred to earlier is from the PhD in math. So I came from a very analytical side. So my first roles were in the energy industry rather than the automotive industry. And I was interested in forecasting energy demand. So first of all, at the short term; So what's going to happen tomorrow, the next day, and the next week? I increasingly became interested in the longer term. So not just how we use energy, how do we buy energy? Where does energy come from? So interested on the supply side of it as well. So I found myself at National Grid after a few earlier careers in other energy companies and say became interested in longer-term forecasts that National Grid produced. A set of forecasts or scenarios called future energy scenarios. I was very, very involved in them. Very interesting. One area that particularly peaked my interest was electric vehicles. And I saw these projections going along and then they would shoot up in the 2020s and 2030s level.
That's really interesting and that's going to really change how we move ourselves and how we can move things around. The country wants to get more involved in that. And a couple of years ago, the opportunity came to join Greg Cooper's team, who heads up work here at National Grid, looking at transport decarbonisation. So I've been looking at that since the start of 2020. As you said, I look at everything from electric vehicles, particularly interested in the rapid charging side of it. This is where National Grid could play a real direct role in what we do, but say across all types of transport, rail of a heavier... goods vehicles, HEVs particularly. And after the transport decarbonisation plan that we just see all the way out to maritime and aviation.
Ade:
Russell. Thanks very much, indeed. So many interesting inflexion points at the moment, a 100 year transition in both the energy and transport sectors as you've outlined David. It's incredible new technology as we transition over from ICE to EV. Taking us neatly onto the subject in hand of fleets and the fleet transition. So going back over to the question in and around fleets, and we begin every one of these podcasts with a question from our audience. And the question perhaps slightly contentiously that feeds discussion the climate change committee advice suggests we should not be replacing internal combustion engines with EVs likes or like. They ask what other innovations and solutions should fleets look at to reduce volume as well as emissions? David, what's your take on that question?
David:
Yeah, it's a great question. It's very interesting. And one I've heard more than once in the past as well. I think I'd probably answer it to begin in two parts. The first part would be, we need to think about the needs people have for movements of themselves and their family and friends. So the movements of people, and then also the movements of goods, obviously where a lot of fleet vehicles are used. And I think what's happened through the pandemic, it's obviously changed a lot of our mobility habits and our transportation needs. So I think the first thing would really be, we really need to evaluate why we need fleets and how we use fleets. So that would be the first one. And then secondly, I think in terms of solutions to solve that challenge of the movement of people and goods, I think it would also then be thinking about the types of solutions we need. Electric vehicles, electric trucks are one solution, but they're not the only solution. So I think there are different technologies that can and should be explored as well. With different use cases that solve different challenges.
Ade:
Thank you very much indeed, David. And Russell, what would be your take on that question?
Russell:
Yeah. I agree with that as well. So it's the way we look at this in terms of fleet is making sure that you've got the right type fleet and if it is electric or it's something else, that you've got the infrastructure to support that as well. So if you're thinking, "Well, I'm going to move my car fleet to EVs." Even if it's not your whole fleet to EVs, you're going to need some infrastructure to support that. So can we get the investment in that infrastructure, whether that's at your depot or whether that's en route to making sure it's the infrastructure in the right place as well. And then if you take a step back, if we thinking on to goods, and heavier goods as well. Thinking, "Well actually what is my solution look like?"
We talk about electric, but sometimes we often think that there are other solutions out there. Hydrogen is the one that becomes obvious. Where does hydrogen infrastructure need to be? Am I going to do that on my depot? Or am I going to look for hydrogen refueling en route? Or am I going to look at a dedicated hub a little bit like you have with petrol and diesel at the moment. It's also important how you refuel or recharge those vehicles in particular as well. So if we're talking about infrastructure, making sure that they're smart charges in there. We hear a lot about smart charging for domestic vehicles. So people will come home and they'll charge their vehicles overnight. Let's make sure if you've got fleets coming into there, that the vehicles that they do have there charge smart way. So if you can charge your fleets overnight, that's great. If you can't charge them overnight, have you got the tools to be able to manage that onsite without making it overly expensive for yourself in terms of the energy, the use, and in terms of the grid infrastructure that you require there?
So I agree with that, how we're moving people and goods around is clearly going to change. But however you look at it, you're going to need infrastructure to score that. Let's make sure that we've got that right infrastructure investment at the right place and at the right time.
Ade:
Thanks. Russell, you mentioned bikes in there and there's a category of these that's often overlooked in this conversation, which I think makes the answer to the question slightly less tricky. Which is the e-bike; that's a category that is actually the largest volume of sales at any EV category and is a very, very good sustainable, zero emissions form of transport.
Great. Well, thank you very much for those opening gambits, both. Just to say we ask for listener questions for every episode. So please do send in yours too EVsummit@green.tv, we'll be delighted to include any listener questions on additional podcasts in this series. But moving on now to the main debate. So this question that we've asked from our audience leads very neatly into today's topic. We're talking about fleets and exploring why transitioning fleets to EV is so essential for transport decarbonisation. David I'll hand over to you first, could you give us your take on why EV is such a crucial piece in the shift to zero emissions transport.
David:
To begin with, I'd start off with thinking about the size of fleet vehicles that we have in the UK and around the world. We look at this from a European perspective. We did a study earlier in the year, and you mentioned earlier that roughly 50% of cars sold or vehicles sold are fleet. That is absolutely the case, but what happens is a lot of those fleet vehicles end up back into consumers' hands. So after a few years of fleet usage, they'll find their way back through the used car market and into end consumers. The overall carpark of fleet vehicles from a European perspective, it's about 20%. So 20% of the cars on the road are from a fleet. And then secondly, if we now think about the amount of miles that those 20% of vehicles travel, that's about 40% of overall miles travelled. And in terms of emissions, those 40% of vehicle miles travelled are producing 50% of the emissions.
So the significance and the importance of fleet is disproportionate to the number of vehicles we have on the road as well. So that's why we think if we can make a change around the emissions from fleet vehicles, we can make a very significant dent in the emissions that we produce on transportation.
Ade:
Super interesting points. What is it then about fleet drivers in particular makes them such polluting drivers? What's going on there?
David:
If you think about a typical car that you or I, or Russell would drive, typical statistics, that vehicle, our own vehicles could be sat on a driveway or in a car park for 95% of the day. So the utilisation of those vehicles is very, very low. If you think about how companies are using their fleet vehicles, one of the key measures they have is utilisation to try and sweat those assets as much as they possibly can. So therefore they're on the road way much more than any cars that we would have from a consumer perspective. And that's part of the challenge.
Ade:
Russell, anything to pitch in from your side around the points that David raises there?
Russell:
Yeah, I agree with what David said certainly on the emission side of it. I would add in also the the air quality points also. Transport obviously is a disproportionate amount of air quality, nitrous oxide, in particular; we've seen that. We've seen local areas been in breach of their commitments. That's really important to at National Grid that we have clean air there as well. And if you think about the fleet, if you think about, say we're moving an electric fleet, appreciate there is hydrogen and there are other vehicles there. But if we use that as a good example, we know we have only renewable energy to supply that, and we know we're getting more and more renewable power as well. So you have a little... I've got quite a symbiotic relationship there. So the electric vehicles, they need renewable power, but that renewable power is helped by having electric vehicles.
David mentioned that a lot of vehicles are plugged in at the time. So fleets will be plugged in, not moving less than your normal domestic vehicle will. Sure, but there will be times when they're not there. And that can help balance the system. So these are renewables where it's windy and where it's sunny, you charge up your vehicles. When it's not windy, when it's not sunny, you don't say. And you can help manage this too. Actually this comes to symbiotic relationship if you like, between the energy sector decarbonising and the economy generally decarbonising and improvement in the air quality. And you've got a virtuous circle starting to develop that. And national grid just to mention, there are our own fleets. So by 2030, we are committed for that to be alternatively fueled. And we use that wording quite precisely. So obviously for cars, for company cars, for people that drive around electric vehicle will make sense. But we obviously have to be mindful of heavier vehicles.
Again, hydrogen may be the better fuel for them, or you may be looking for synthetic fuels or some kind of biofuels to be able to get to your larger plant vehicles as well. You can imagine some of the national grid is on quite remote sites there, so it's maybe difficult. Ironically, we're building out the networks, there's no network to plug a vehicle in there. So we do look across all types of fuel there. But all of those vehicles will help reduce emissions as David said, and all of them will help contribute towards air quality improvements as well.
Ade:
Russell, you work in the energy sector as well as the transport sector. And we're talking about decolonization as well as fleets. Maybe a question for both of you, do you see indicators that some new EV fleet buyers are also using renewable energy in their mix? Is that part of things as you see unfolding at the moment, and if not, how can we make it so?
Russell:
Yes, I think you see so. If your fleet is moving to electric again, let's use that example. It would make sense to try and make sure your energy supply is from renewable power. Again, if you drop back into the domestic setting, most people are aware that you could pick up a tariff where you have a renewable commitment. So 100% renewables, they are very common out there as well. And you can get that in the commercial set as well. Obviously depending on the size of your operation, depends on what you can do guys. So you can get PPAs in agreement with solars and wind developers as well there to make sure you've got your kind of renewable energy. If you are larger or interested in more investment, we are certainly seeing solar investments are very popular by the science of, of, of people putting in EV charging because you've got the infrastructure there.
So one of the advantages of energy infrastructure is electric vehicles take power out as we talked about. But also the renewables can put power in as well. So you can help balance your own system there. You could also have batteries to your SAP as well, to really help manage your system to make sure that you're... you're using the renewable power if you generate that on site. So as you're absolutely seeing more of that. And I would say smart charging again, if you could do that, that helps the system more generally make better use of renewables. So if you are efficiently charging your fleet, that makes the whole system you use renewables more efficiently than they are at the moment.
Ade:
David, any thoughts on this subject area?
David:
Yeah, in terms of the switch to renewables. So if we just think about what the manufacturers are doing, so they're obviously bringing in products to the market with zero emissions, low emissions. So that's the first piece of the puzzle, I think because a lot of the regulation is driven around tailpipe emissions. I think where it needs to go a little bit further is focusing on the life cycle analysis. So that's extending what the impact is to emissions all the way down the value chain. If you start from a factory where you're building the vehicle, but go down into where the components and the products are coming from all the way down to batteries that are now being developed and being built in gigafactories. Where do they get their minerals from? So mineral extraction into chemicals, into cells and packs, and then finally batteries and vehicles. We need to look at the whole chain and we need to look at everything and every aspect of it in terms of reducing emissions. And I think the other aspect of this would be a lot of the manufacturers are obviously very, very intensive users of energy.
So they are making their own moves on switching over to renewables to run their own facilities as well, whether that's the manufacturing facilities, but also their office locations, warehouses, et cetera.
Ade:
Do you see in your customer conversations, David, this inclusion of full life cycle analysis. This full sustainability narrative as being something that progressive fleet buyers are looking at?
David:
I think there's not enough at the moment, Ade from what I've seen. I think some companies, some clients are looking at this for sure. But they're breaking new ground. One thing that we're seeing in this whole transition is we're having to work across sectors more than we ever have before. We're having to go to places that we've never worked before. And I think it's just like I'm peeling an onion. We've got to peel the onion, find out something we didn't understand before and we need to keep going to the next step. So I think it's started, Ade but I think we've got a lot to do. And I think that should really be the focus and thinking about the policymakers as well, maybe for them to consider that rather than just tailpipe emissions.
Ade:
Yeah. There's so much change going on in the sector at the moment. Are fleet buyers being asked questions today, the like of which she or he wouldn't have even dreamed to be asked just a few short years ago. So a whole lot of exciting new ideas to take on board. Moving on then, David, what do you think is driving sustainability at large and what's going on in that wider narrative around sustainability into buyers?
David:
There's the obvious conversation around what's important to all of us as individuals in terms of the roles we have in life and the legacy that we're leaving for our children and our children's children. And the impact that we're all having on the planet. So I think emissions plays a large role in that, but I think everybody now is much more conscious and aware of what that means to all of us individually than we were maybe five years ago. I think that for me is probably the most important factor. How we're considering and addressing this much more as individuals and how it affects our own lives.
Ade:
Thanks very much indeed for that. We zoomed out to the big picture, so zooming in to some of the nuts and bolts questions the fleet buyers are considering in their transition to EV. What do you see is interesting in that transition in terms of total cost of ownership or indeed total savings ownership with EVs having lower costs across maintenance, fuel spare parts. How can we positively sell into fleet buyers the idea that going over to EV is the way to go?
David:
So I can take that first if that's okay, Russell. I think a lot of the things you've just mentioned then, Ade. I think that there's a lot that we need to do, which is still around communication. So awareness, communication, understanding. Total cost of ownership is something that's understood by many in the fleet world, because that's how they've run their business for many years focusing on the total cost. But as an end consumer, that's not something we looked at. And a lot of people are still focused on the significant price increases that you'd have on buying a vehicle, buying an electric vehicle versus a combustion engine vehicle. So I think in general, there's an awareness and an education that still needs to happen. Less so with fleet and with fleet buyers.
David:
I think the thing that's important as well with fleets is because the nature of the size of the fleet, you mentioned earlier that UK government having a fleet of 40,000 vehicles, they need to transition. It's the purchasing power that the fleets have rather than buying ones, or twos, or tens or twenties of vehicles, the fleets that have significant amounts of vehicles that need to transition, and they need to manage that. I think that's where they can make a difference as well in terms of leading the way in showing the way.
Ade:
Totally. Yeah. It's exciting to see some of the big players in the eMobility sector, making a commitment to transition their fleets over to EV. We've had UK government with the decarbonisation transport plan announce that it's 40,000 strong fleet we'll go over ABB. And obviously a leading engineering force globally have announced that their employee base will transition over. That's a 10,000 strong fleet available for people think about that one. Russell what's going on in the national grid space in terms of some of these points here and questions around communicating and educating fleet buyers around the transitions in eMobility.
Russell:
Yeah. I'm obviously looking at this from the other end, from the infrastructure end. So it creates immense... you mentioned the government, there's lots of other companies and ourselves included in the committed there. So it's one thing always to make sure that fleet cars are aware of the infrastructure requirements that are required there. So let's again, use an example because it's an easy one to think about. So if you'll move into electric, what do you need in terms of charge point provision? So if you're a fleet and you have a depot, what do you need? Are you going to be charging your vehicles overnight? Are you going to have very high utilizations of vehicles? Do you need to put rapid chargers in there? Are your vehicles returning to base so they can go out on charge? Can they come back or they go across country?
So are you then going to need to think about, "I need a public charging network, which public charging network should I use? How do I access that as well?" So get all those infrastructure things, people think about them in a holistic way. So if all fleets think about them, then that multiplies up to the bigger infrastructure. So what's supporting behind that? So yes, it's important that you get your charge point into your depot, but if we take... look what happens behind the scenes. Let's think about that infrastructure that goes on behind: how do we get that wire to your depot? How do we get that big wire to your small wire, to your depot? If that makes sense. Talking about what we do at National Grid and making sure all those renewables hook up as well. Again, I'll beat the drum again for the small charger in there. I would say, "Well, let's make sure that we can charge those vehicles sensibly as well."
So that infrastructure you put in is economically as efficient as possible there. Also say in terms of fleet, then the ability to start to play in the energy market. Suddenly you've become an energy consumer far more than you did before for your building. So property will manage their energy really well, but suddenly you've got a battery... lots and lots of potential batteries sitting on your full quarter, on your depot or wherever it may be. There's opportunities to offer services to either your local grid in terms of balancing, we talked about charging up when the renewables are in the system. And then maybe discharging even the vehicle to grid. So actually, could you have your batteries discharging back onto the energy system? So always or maybe not sunny or not windy also, there's lots of potential opportunities for fleet management then to become energy procurement as well.
So they need to sort it with their energy procurement teams as well to make full use that. So suddenly another revenue stream has become available to the fleets when they are parked up was all to really... I think David, you mentioned earlier about sweating their assets as well. So when they're packed up, could we even start to sweat the assets there by offering services to the grid?
Ade:
I was going to ask you about hydrogen and biofuel vehicles. We're all getting very excited and perhaps this podcast and this conversation has majored on EVs and eMobility. But David, what are your thoughts from an EY perspective on the hydrogen, biofuel fleet mix?
David:
Yeah, so I think it's like many things there's not one size fits all and I don't think there'll be one answer to everything. There are so many different permutations, different use cases, different needs that people have. And the way, if you think about the book ends of the spectrum at the moment, so you could think about just a small passenger car that will move to and already is moving to an electric vehicle. And then you go all the way up to SUVs, into trucks, into commercial vehicles, into heavy goods. And I think the other bookend and the other end of the spectrum would therefore be, probably hydrogen. That's probably the use case with the larger vehicles, but there are so many things in between that. And you could think about a heavy goods vehicles that is doing last mile delivery.
Well, that was considered to be probably a hydrogen use case previously that's now absolutely moving much more towards a battery use case, because of the niche UC has and I think there'll be everything in between. So I think there'll be general trends that satisfy different types of vehicles. But I think the specific use cases will make it a little bit more complex and one size fits all or even two size fits all.
Ade:
Thanks so much, indeed David. Russell's mentioned a little bit about national grid's fleet commitment. So put you and put EY too much on the spot, but what can you tell us about EY's commitment to transition its own fleet over to zero emissions vehicles?
David:
Yeah. You're not putting us on the spot at all, Ade. It's a very good question. So unsurprisingly, it's something clearly we're working on. We're very active on this at the moment, we're not in a position where we can declare something publicly. But from a global perspective, but what we have seen, our colleagues in Belgium, they have publicly committed. That was announced a couple of months ago that they are transitioning their fleet of vehicles. And what I can say is that we're actively working on that with other markets and other countries as well.
Ade:
So I said I didn't want to put you on the spot. But maybe to put you on the spot a little bit, are you saying that that Belgian model will transition over to other country offices in the EY world?
David:
I think what we're doing at the moment is I think what most people are doing, we're testing, we're learning, we're trying to find out what is the... I wouldn't say the best solution because I don't think there is best. I think there are better solutions. So we're learning and we'll adapt and then we'll take that to other markets.
Ade:
I think there's a very strong career opportunity for you in politics, if ever you should decide to go in that direction, David. A very good, a very political answer. David, anything else you'd like to contribute?
David:
We can always learn from what's gone before. And so clearly what's most... a lot of fleet users are using commercial vehicles and heavier goods vehicles. That's not as advanced from a product perspective as passenger cars. So I think we can learn from what's happened with passenger cars. What we see at the moment is the availability is still not there for commercial vehicles, but it's absolutely coming. And I think it's really understand that in terms of seeing the trends and what's happening with pricing of vehicles that on passenger cars, it clearly is dropping. We will get to that tipping point where you get equity in terms of parity... sorry, in terms of the pricing. If you're thinking about it from a total cost of ownership perspective, it obviously happens quicker.
So I think understanding that the products are coming, the manufacturers of all making very, very significant announcements in the last few months. So the products will be there. The prices will drop as we go through the decade. And I think for me, the biggest challenge, and I think this was recognized in the announcements from governments in the last day or so, it's really about the need for infrastructure as well. And Russell mentioned this earlier. That for me is probably where we need a little bit more focus and a little bit more support. And frankly, I think it's a little bit more complex as well.
Ade:
Absolutely. Russell, I know there's that question you get asked perennially, can the grid cope with the huge rise in EVs? For those who haven't heard of the national grid response to that question, would you mind outlining the answer to that one please?
Russell:
Yes. We get that question a lot, whether the grid can cope. I think when that question is asked then we break it down into a couple of parts. So the first part is, can you get the energy to your, let's say electric vehicles here, because it's a good way to think about it. So obviously that energy, that electricity has got to be from renewable sources. And if you look in the detail of the recent net zero announcements, there have been quite a lot of them. But if we go back to, I think it was around October, November, when it was 10 point plan... So Boris Johnson gave his 10 point plan. And one of them was the commitment of offshore wind. That was a significant increase in that. So there was a commitment to 40 gigawatts of offshore wind by 2030. So it's only nine years away. And to put that into context, there's around 10 gigawatts today. So in very simple terms, that's where your energy is going to come from, an uptake in renewable energy.
Now, of course, how are you going to get that renewable energy into your car? So of course those offshore wind farms need to be connected to the grid. And that's partly our job to make sure that that happens economically and efficiently as possible. Of course, you then need to make sure that the charge point infrastructure is there. And we've touched on what rapid charge as well. So making sure rapid charging network is there at motorway service areas, and hubs and other places where it needs to be. So there's two ends of the infrastructure that need to be done. Of course, there's going to be some infrastructure in the middle that's going to be needed to be upgraded, to make sure we can get that power from the big wind turbines right into people's cars. And that works on an energy point of view because one of the things you do is make sure that the supply and demand are banished. And we've talked about that kind of symbiotic relationship, if you like between wind and EV.
So you need the renewable power from the offshore wind to be able to support electric cars, but because there is a choice about when you charge your electric car, you can charge it overnight, for example. You can even then charge when it's windy or it's sunny. So your EV charging can align up to the wind and weather conditions as well. So again, you get that symbiotic relationship as well. So renewables help electric vehicles and electric vehicles help renewables. So very briefly that's how the grid will cope with that. Equally we could replace electric vehicles with say production of green hydrogen. As well, green hydrogen we will need renewable power as well there. So whatever the fuel source, if you like, whether that's electricity or hydrogen, you can see a similar story playing out there.
Ade:
I know Graham Cooper was part of the government's all transport decarbonisation plan. I assume National Grid fed in some ideas around the introduction of smart charging for those very reasons. Is that right?
Russell:
Yes. Graham's been heavily involved with that as well. I should also say our system operated by the business, the ESO, electricity system operator, it's a legally separate part of the business. They fed in very heavily to that as well. They're responsible for balancing the system. So they will directly benefit from smart charge as well. But yeah, as you can imagine, we have conversations with the department of energy and public transport, as well as do our system operator colleagues have absolutely been involved in that from day one.
Ade:
Very good. Well, thank you very much, indeed, both for those super sage insights into the subject of fleets and decarbonisation. Thank you very much indeed, David. Thank you Russell for joining us today/ to wrap up, can I ask you both what the next step that you would personally like to see in the fleets sector is?
David:
So I'd probably just offer one thought, Ade. We've touched on it quite a few times as we've been talking. And I think what Russell's just done there is a great example of this. I think it's touched on awareness and understanding, so awareness, communication, understanding, and education. Whether we're talking fleets or end consumers, that for me is vital. And I think if we can get that right, it's going to help this transition accelerate much better.
Russell:
What I would say is making sure that when people think of transport, they think of the underlying energy infrastructure as well. We mentioned the symbiotic relationship. I'll have that probably as my final thought there, that we need to think about the energy infrastructures needed to support transport even more. And we need to think about it at the same time or ahead of where we're thinking about it. As I say, we can't have our entire fleet of electric vehicles and no infrastructure to charge them. So we need to make sure we do that. And fleet managers think about that. And planners think about that and the government think about that. And energy industry and transport industry all think about that together, working close together.
Ade:
Well, you both referenced education there. And so hopefully in some small way, this EV Y podcast on fleets on the whole series will help in that education piece. So thank you very much, indeed. Both for joining us for such a fascinating discussion. Thank you very much.
David:
You're welcome. Thank you, Ade. Thank you, Russell.
Russell:
Thank you, Ade. Thank you, David. Really great conversations.
Ade:
Now, to end every episode we will be highlighting an exciting and innovative hyper fast growth company in the sector. Today, we have Carla Detrieux, director of business development at Volta Trucks to tell us all about Volta's journey. Thank you so much, indeed, Carla, for joining us.
Carla Detrieux:
Thank you, Ade as ever for giving me this opportunity to chat with you and share my perspective and my experience.
Ade Thomas (host):
So what did you see in the eMobility sector in particular that really excited you?
Carla:
Obviously, such a big transition is a great opportunity for companies, but also individuals I think, to flourish and develop themselves. There's nothing that has been done in the trucking industry. There's no set rules, anything is possible. So being in a team of very passionate people that want to make it happen is really what attracted me. Again, there's everything to be done. So an amazing boulevard in front of us to develop ourselves.
Ade:
And in this section of the EV Y podcast, we're looking at hyper fast growth companies of which Volta Trucks is certainly one. But I bet you didn't imagine it would be quite this dynamic when you entered into this sector just over a year ago now or did you?
Carla:
I think sometimes I get confused. I don't know if it feels like days or years, because this year has been high speed, is gentle. It's been non-stop. Customers' traction, engineering development. I've been involved in all kinds of discussions. We're making something very big from a small team and we're scaling super quickly. So head counts are growing every month. So is our focus on new markets and to give you an example, so we are conducting a European roadshow. And the way it started was let's take the truck for a few days in Paris and see the reception. Next minute, we are going all across Europe and the US as well because the traction has been outstanding and we made the most of it and thought, "This whole momentum, we need to make the most of it." So it went from a few days in Paris to a mega roadshow all across the world, which is illustrating where it starts and where it takes us.
Ade:
Very good. And so let's talk a little bit more about the Volta Trucks and business model specifically. I know Volta has a number of core pillars to its work. Tell us about the Volta's core pillars please.
Carla:
Sure. So the starting point is that we are defined as an OEM, but we are so much more than just an OEM. We are bringing a solution to regulations that are flourishing all across the globe for low emissions zones. So electrification is very much a starting point from a blank sheet of paper, sorry, we are able to redesign and conceptualize a truck, but we go again beyond just emissions. There's a very important problem around safety in city centers that we are definitely trying to tackle as much as we can. So very much our ambition is to become the safest OEM, both for drivers, but also for pedestrians and cyclists. And then in uses. Because there's a lack of acceptance when it comes to trucks in the city and we want to tackle this because again, COVID has highlighted that we need trucks. We need heavy supply and volume in our cities, and then the third one is very much the driver shortage.
Carla:
We are aware that this is a global problem and by bringing a truck that gives the best experience to drivers, that facilitate their daily tasks that are exhausting and dangerous. We want to give them the best work environment possible and also give operators a competitive advantage when it comes to recruiting and retaining their drivers. We want to make, basically, drivers our ambassadors. So creating a community, make a community of drivers and speak to them because we feel like OEMs are a necessity. We have two challenges. We have the person sitting in the office that... our customers, because they are signing the paperwork basically. But the drivers are such an important workforce that we also need to speak to and value. So yeah, there's very much the three top pillars that are the core of Volta.
Ade:
Thanks so much indeed for those insights Carla and let's move on to have a chat about sustainability, which I know is a really, really key part of Volta Trucks' mission and indeed a major thing that needs to be addressed across the mobility space. We understand that 30% of all CO2 emissions come from heavy duty vehicles, according to the heavily respected body, transport and environment. So how important is that CO2 emissions piece to Volta Trucks' mission?
Carla:
I think there's two very simple ways to reduce emissions; either you remove the amount of trucks that are on the road or you change... or you have an alternative in terms of fuel. So we want to combine the both. So by bringing to market heavy goods vehicles that can remove smaller vans, we can optimize the workforce, optimize congestion. And again, within the electric vehicle, the goal, the ultimate goal is to remove CO2 emissions and particles and knocks from the cities. So our customers are asking us, "How can we make this happen?" Because they obviously work, for retail for very important or high image customers that also are putting pressure on them saying, "We want to decarbonise our operations, let's find solutions."
Carla:
So this is really how we want to help the whole ecosystem because not only customers and cargo owners want this to happen, we have all of the communities living in cities. All of the public administration staff want this to happen. So we're very much trying to involve everyone in the discussion and educate them on the benefits of electric vehicles.
Ade:
And tell us a little bit more about how as a startup Volta Trucks is perhaps more uniquely positioned to deliver against some of these objectives than some of the historic OEMs.
Carla:
I think that the key differentiator or the disruption is first of all, around the product. Ade, you're very familiar with with the Volta zero, and it's outstanding how unique it is compared to all of the solutions on the market. And tackling again, these three problems that we mentioned before. Then the disruption is around the service associated to the vehicle. We don't only want to sell trucks. We also want to provide the full suite of services and assets that our customers need to operate their vehicle. So the end goal is to provide, on a subscription-based model, the full suite for operation success. So one point of contact, one invoice and one dashboard of data. This is very much where we see ourselves and we see it as a rapid enabler to EVs because it tackles all question marks or anxieties that we can have linked to asset possession.
And then disruption is also around maintenance service, real assistance and level of service. We want to be able to provide the best service and a unique service and same service all across different markets, which is important to mention. We don't do the same business as historic OEMs because we are 100% targeted on one vehicle as a starting point, but four, which is quite a small range. A small, but very focused range. And something that I hear regularly is around maintenance network. So how are you going to manage fleet deployment when you don't have an existing network? That's true. This is why we have a city by city rollout plan, where we integrate the service network before we deploy the fleet.
But this isn't a valuable answer when we use the existing old maintenance network as an advantage, because if your service network and your thousands of employees aren't trained and equipped on the technology that you're trying to develop, and you still have a full range of natural gas, diesel and all of these other fuels, it's very hard to penetrate a market as quickly as we can.
Ade:
Yeah, absolutely. And thanks so much indeed for that. Let's finish off. You mentioned some of the points from your customers. What are some of the more positive points when customers get to understand the Volta Trucks business model, get to see the Volta zero. What are some of the most exciting conversations you have around your customer's vision for how the Volta Trucks model and the Volta zero can deliver for them?
Carla:
We have some very creative customers. So instead of having real estate depots all across the city, I have the example of one customer that would like to use the Volta Sierra as a mobile hub, and then have a cargo guy so e-scooters picking and dispatching for the very, very last mile... let's say last meter. So this is creative business models that are flourishing. So the last mile industry is completely changing, I would say. And it's a challenge, but it's very exciting. And to answer your question, like you said, we are coming from a startup in a remote environment where we've been doing everything through 2D to taking on customers on this European [Rocher 00:42:31] and actually feeling a product. A fully developed demonstrator. And this completely triggers engagement. And then people realize, "Okay, this is happening now." So it's super exciting, super refreshing, and also meeting people in real life face to face. It feels like we're kind of coming back to some normal, so very exciting.
Ade:
And it sounds like it's personally very, very exciting for you as an individual.
Carla:
It definitely is. I often say I never thought I'd be in love or so passionate about a truck, but I'm totally in love and feeling blessed to be part of this mission and this incredible team.
Ade:
Well, Carla, I hope you on the Volta zero have a very happy future together.
Carla:
We will. Certainly will.
Ade:
Thank you very much for joining us-
Carla:
Thank you.
Ade:
On the EV Y podcast.
Carla:
Okay.
Ade:
So that's it for episode two of EV Y. Thank you for joining us today. We've got four more episodes upcoming in the series. So please do subscribe to stay up to date with those. Please do keep sending in your questions and comments to our podcast contributors to evsummit@green.tv and we'll see you back here for episode three.
Welcome to EV Y the eMobility podcast that asks the bigger and better questions of the EV industry. Hello, and welcome back to the EV Y podcast. The eMobility podcast series that dives deep into the eMobility sector. I'm your host, Ade Thomas, and every week I'll be talking to experts in the field to understand more on the what the how and crucially the why people are involved in the industry. Today's episode is all about the crucial topic of fleets with over half of new road going vehicles purchased by fleets. Their influence on the automotive market is huge. And today we're asking the question, why is transitioning fleets to EV essential for transport decarbonisation. Particularly pertinent today in the UK with the government having released its transport, decarbonisation plan this July with a commitment to transfer all of the government's 40,000 strong fleet to zero emissions vehicles.
Ade:
To help answer that question I'd like to introduce our guest speakers for today. Firstly, from EY, David Borland, David is EY's UK and Ireland automotive leader with extensive experience in the space. Having worked across the value chain, OEMs, suppliers and dealers. And our featured guest is Dr. Russell Fowler, senior project manager for decarbonisation of transport at national grid. Russell works across all areas of transport from EVs to aviation. David, Russell, thank you very, very much, indeed, for joining us today. To start off, I'd like to ask you both why you're in the eMobility sector. David, what drew you into this area?
David Borland (EY):
Thank you, Ade. And it's great to talk to you and Russell today. So you mentioned already that I've spent most of my career working in the automotive sector, either at manufacturers, suppliers or dealers. And a few years ago, I had the chance to think about what I wanted my next step to be in my career. And I was actually thinking of moving away from the automotive industry. I checked myself a little bit and thought now is actually probably the perfect storm of the times to be in the industry. It's so interesting with everything that was happening before the pandemic, pre COVID with changes toward connected vehicles, electric vehicles, autonomous vehicles, and shared mobility. And I just thought, "Actually no, this is a really good time to be in, to stay in the industry, to work in the industry and to move into the eMobility space as well." So hopefully leveraging some experience that I have, but moving into a brave new world in terms of what the future holds for all of us.
Ade:
Thank you very much, indeed David. And just a quick follow up question, was the sustainability narrative one that particularly interested you in your decision to remain in the automotive sector?
David:
I think sustainability was one of them, for sure. I think the combination of probably sustainability, technology and how important that's become as well in the world that we live today and do business. So probably a factor of a few things coming together, Ade.
Ade:
Thank you very much, indeed. Thanks for those opening thoughts and some insights into your thinking. Russell, over to you. Russell, what about you? What brought you into this sector?
Dr Russell Fowler (National Grid):
That's a great question. I've been thinking about this and listening to that, and I'm an academic by the start of my career. So I have a degree in mathematics and the doctorate you referred to earlier is from the PhD in math. So I came from a very analytical side. So my first roles were in the energy industry rather than the automotive industry. And I was interested in forecasting energy demand. So first of all, at the short term; So what's going to happen tomorrow, the next day, and the next week? I increasingly became interested in the longer term. So not just how we use energy, how do we buy energy? Where does energy come from? So interested on the supply side of it as well. So I found myself at National Grid after a few earlier careers in other energy companies and say became interested in longer-term forecasts that National Grid produced. A set of forecasts or scenarios called future energy scenarios. I was very, very involved in them. Very interesting. One area that particularly peaked my interest was electric vehicles. And I saw these projections going along and then they would shoot up in the 2020s and 2030s level.
That's really interesting and that's going to really change how we move ourselves and how we can move things around. The country wants to get more involved in that. And a couple of years ago, the opportunity came to join Greg Cooper's team, who heads up work here at National Grid, looking at transport decarbonisation. So I've been looking at that since the start of 2020. As you said, I look at everything from electric vehicles, particularly interested in the rapid charging side of it. This is where National Grid could play a real direct role in what we do, but say across all types of transport, rail of a heavier... goods vehicles, HEVs particularly. And after the transport decarbonisation plan that we just see all the way out to maritime and aviation.
Ade:
Russell. Thanks very much, indeed. So many interesting inflexion points at the moment, a 100 year transition in both the energy and transport sectors as you've outlined David. It's incredible new technology as we transition over from ICE to EV. Taking us neatly onto the subject in hand of fleets and the fleet transition. So going back over to the question in and around fleets, and we begin every one of these podcasts with a question from our audience. And the question perhaps slightly contentiously that feeds discussion the climate change committee advice suggests we should not be replacing internal combustion engines with EVs likes or like. They ask what other innovations and solutions should fleets look at to reduce volume as well as emissions? David, what's your take on that question?
David:
Yeah, it's a great question. It's very interesting. And one I've heard more than once in the past as well. I think I'd probably answer it to begin in two parts. The first part would be, we need to think about the needs people have for movements of themselves and their family and friends. So the movements of people, and then also the movements of goods, obviously where a lot of fleet vehicles are used. And I think what's happened through the pandemic, it's obviously changed a lot of our mobility habits and our transportation needs. So I think the first thing would really be, we really need to evaluate why we need fleets and how we use fleets. So that would be the first one. And then secondly, I think in terms of solutions to solve that challenge of the movement of people and goods, I think it would also then be thinking about the types of solutions we need. Electric vehicles, electric trucks are one solution, but they're not the only solution. So I think there are different technologies that can and should be explored as well. With different use cases that solve different challenges.
Ade:
Thank you very much indeed, David. And Russell, what would be your take on that question?
Russell:
Yeah. I agree with that as well. So it's the way we look at this in terms of fleet is making sure that you've got the right type fleet and if it is electric or it's something else, that you've got the infrastructure to support that as well. So if you're thinking, "Well, I'm going to move my car fleet to EVs." Even if it's not your whole fleet to EVs, you're going to need some infrastructure to support that. So can we get the investment in that infrastructure, whether that's at your depot or whether that's en route to making sure it's the infrastructure in the right place as well. And then if you take a step back, if we thinking on to goods, and heavier goods as well. Thinking, "Well actually what is my solution look like?"
We talk about electric, but sometimes we often think that there are other solutions out there. Hydrogen is the one that becomes obvious. Where does hydrogen infrastructure need to be? Am I going to do that on my depot? Or am I going to look for hydrogen refueling en route? Or am I going to look at a dedicated hub a little bit like you have with petrol and diesel at the moment. It's also important how you refuel or recharge those vehicles in particular as well. So if we're talking about infrastructure, making sure that they're smart charges in there. We hear a lot about smart charging for domestic vehicles. So people will come home and they'll charge their vehicles overnight. Let's make sure if you've got fleets coming into there, that the vehicles that they do have there charge smart way. So if you can charge your fleets overnight, that's great. If you can't charge them overnight, have you got the tools to be able to manage that onsite without making it overly expensive for yourself in terms of the energy, the use, and in terms of the grid infrastructure that you require there?
So I agree with that, how we're moving people and goods around is clearly going to change. But however you look at it, you're going to need infrastructure to score that. Let's make sure that we've got that right infrastructure investment at the right place and at the right time.
Ade:
Thanks. Russell, you mentioned bikes in there and there's a category of these that's often overlooked in this conversation, which I think makes the answer to the question slightly less tricky. Which is the e-bike; that's a category that is actually the largest volume of sales at any EV category and is a very, very good sustainable, zero emissions form of transport.
Great. Well, thank you very much for those opening gambits, both. Just to say we ask for listener questions for every episode. So please do send in yours too EVsummit@green.tv, we'll be delighted to include any listener questions on additional podcasts in this series. But moving on now to the main debate. So this question that we've asked from our audience leads very neatly into today's topic. We're talking about fleets and exploring why transitioning fleets to EV is so essential for transport decarbonisation. David I'll hand over to you first, could you give us your take on why EV is such a crucial piece in the shift to zero emissions transport.
David:
To begin with, I'd start off with thinking about the size of fleet vehicles that we have in the UK and around the world. We look at this from a European perspective. We did a study earlier in the year, and you mentioned earlier that roughly 50% of cars sold or vehicles sold are fleet. That is absolutely the case, but what happens is a lot of those fleet vehicles end up back into consumers' hands. So after a few years of fleet usage, they'll find their way back through the used car market and into end consumers. The overall carpark of fleet vehicles from a European perspective, it's about 20%. So 20% of the cars on the road are from a fleet. And then secondly, if we now think about the amount of miles that those 20% of vehicles travel, that's about 40% of overall miles travelled. And in terms of emissions, those 40% of vehicle miles travelled are producing 50% of the emissions.
So the significance and the importance of fleet is disproportionate to the number of vehicles we have on the road as well. So that's why we think if we can make a change around the emissions from fleet vehicles, we can make a very significant dent in the emissions that we produce on transportation.
Ade:
Super interesting points. What is it then about fleet drivers in particular makes them such polluting drivers? What's going on there?
David:
If you think about a typical car that you or I, or Russell would drive, typical statistics, that vehicle, our own vehicles could be sat on a driveway or in a car park for 95% of the day. So the utilisation of those vehicles is very, very low. If you think about how companies are using their fleet vehicles, one of the key measures they have is utilisation to try and sweat those assets as much as they possibly can. So therefore they're on the road way much more than any cars that we would have from a consumer perspective. And that's part of the challenge.
Ade:
Russell, anything to pitch in from your side around the points that David raises there?
Russell:
Yeah, I agree with what David said certainly on the emission side of it. I would add in also the the air quality points also. Transport obviously is a disproportionate amount of air quality, nitrous oxide, in particular; we've seen that. We've seen local areas been in breach of their commitments. That's really important to at National Grid that we have clean air there as well. And if you think about the fleet, if you think about, say we're moving an electric fleet, appreciate there is hydrogen and there are other vehicles there. But if we use that as a good example, we know we have only renewable energy to supply that, and we know we're getting more and more renewable power as well. So you have a little... I've got quite a symbiotic relationship there. So the electric vehicles, they need renewable power, but that renewable power is helped by having electric vehicles.
David mentioned that a lot of vehicles are plugged in at the time. So fleets will be plugged in, not moving less than your normal domestic vehicle will. Sure, but there will be times when they're not there. And that can help balance the system. So these are renewables where it's windy and where it's sunny, you charge up your vehicles. When it's not windy, when it's not sunny, you don't say. And you can help manage this too. Actually this comes to symbiotic relationship if you like, between the energy sector decarbonising and the economy generally decarbonising and improvement in the air quality. And you've got a virtuous circle starting to develop that. And national grid just to mention, there are our own fleets. So by 2030, we are committed for that to be alternatively fueled. And we use that wording quite precisely. So obviously for cars, for company cars, for people that drive around electric vehicle will make sense. But we obviously have to be mindful of heavier vehicles.
Again, hydrogen may be the better fuel for them, or you may be looking for synthetic fuels or some kind of biofuels to be able to get to your larger plant vehicles as well. You can imagine some of the national grid is on quite remote sites there, so it's maybe difficult. Ironically, we're building out the networks, there's no network to plug a vehicle in there. So we do look across all types of fuel there. But all of those vehicles will help reduce emissions as David said, and all of them will help contribute towards air quality improvements as well.
Ade:
Russell, you work in the energy sector as well as the transport sector. And we're talking about decolonization as well as fleets. Maybe a question for both of you, do you see indicators that some new EV fleet buyers are also using renewable energy in their mix? Is that part of things as you see unfolding at the moment, and if not, how can we make it so?
Russell:
Yes, I think you see so. If your fleet is moving to electric again, let's use that example. It would make sense to try and make sure your energy supply is from renewable power. Again, if you drop back into the domestic setting, most people are aware that you could pick up a tariff where you have a renewable commitment. So 100% renewables, they are very common out there as well. And you can get that in the commercial set as well. Obviously depending on the size of your operation, depends on what you can do guys. So you can get PPAs in agreement with solars and wind developers as well there to make sure you've got your kind of renewable energy. If you are larger or interested in more investment, we are certainly seeing solar investments are very popular by the science of, of, of people putting in EV charging because you've got the infrastructure there.
So one of the advantages of energy infrastructure is electric vehicles take power out as we talked about. But also the renewables can put power in as well. So you can help balance your own system there. You could also have batteries to your SAP as well, to really help manage your system to make sure that you're... you're using the renewable power if you generate that on site. So as you're absolutely seeing more of that. And I would say smart charging again, if you could do that, that helps the system more generally make better use of renewables. So if you are efficiently charging your fleet, that makes the whole system you use renewables more efficiently than they are at the moment.
Ade:
David, any thoughts on this subject area?
David:
Yeah, in terms of the switch to renewables. So if we just think about what the manufacturers are doing, so they're obviously bringing in products to the market with zero emissions, low emissions. So that's the first piece of the puzzle, I think because a lot of the regulation is driven around tailpipe emissions. I think where it needs to go a little bit further is focusing on the life cycle analysis. So that's extending what the impact is to emissions all the way down the value chain. If you start from a factory where you're building the vehicle, but go down into where the components and the products are coming from all the way down to batteries that are now being developed and being built in gigafactories. Where do they get their minerals from? So mineral extraction into chemicals, into cells and packs, and then finally batteries and vehicles. We need to look at the whole chain and we need to look at everything and every aspect of it in terms of reducing emissions. And I think the other aspect of this would be a lot of the manufacturers are obviously very, very intensive users of energy.
So they are making their own moves on switching over to renewables to run their own facilities as well, whether that's the manufacturing facilities, but also their office locations, warehouses, et cetera.
Ade:
Do you see in your customer conversations, David, this inclusion of full life cycle analysis. This full sustainability narrative as being something that progressive fleet buyers are looking at?
David:
I think there's not enough at the moment, Ade from what I've seen. I think some companies, some clients are looking at this for sure. But they're breaking new ground. One thing that we're seeing in this whole transition is we're having to work across sectors more than we ever have before. We're having to go to places that we've never worked before. And I think it's just like I'm peeling an onion. We've got to peel the onion, find out something we didn't understand before and we need to keep going to the next step. So I think it's started, Ade but I think we've got a lot to do. And I think that should really be the focus and thinking about the policymakers as well, maybe for them to consider that rather than just tailpipe emissions.
Ade:
Yeah. There's so much change going on in the sector at the moment. Are fleet buyers being asked questions today, the like of which she or he wouldn't have even dreamed to be asked just a few short years ago. So a whole lot of exciting new ideas to take on board. Moving on then, David, what do you think is driving sustainability at large and what's going on in that wider narrative around sustainability into buyers?
David:
There's the obvious conversation around what's important to all of us as individuals in terms of the roles we have in life and the legacy that we're leaving for our children and our children's children. And the impact that we're all having on the planet. So I think emissions plays a large role in that, but I think everybody now is much more conscious and aware of what that means to all of us individually than we were maybe five years ago. I think that for me is probably the most important factor. How we're considering and addressing this much more as individuals and how it affects our own lives.
Ade:
Thanks very much indeed for that. We zoomed out to the big picture, so zooming in to some of the nuts and bolts questions the fleet buyers are considering in their transition to EV. What do you see is interesting in that transition in terms of total cost of ownership or indeed total savings ownership with EVs having lower costs across maintenance, fuel spare parts. How can we positively sell into fleet buyers the idea that going over to EV is the way to go?
David:
So I can take that first if that's okay, Russell. I think a lot of the things you've just mentioned then, Ade. I think that there's a lot that we need to do, which is still around communication. So awareness, communication, understanding. Total cost of ownership is something that's understood by many in the fleet world, because that's how they've run their business for many years focusing on the total cost. But as an end consumer, that's not something we looked at. And a lot of people are still focused on the significant price increases that you'd have on buying a vehicle, buying an electric vehicle versus a combustion engine vehicle. So I think in general, there's an awareness and an education that still needs to happen. Less so with fleet and with fleet buyers.
David:
I think the thing that's important as well with fleets is because the nature of the size of the fleet, you mentioned earlier that UK government having a fleet of 40,000 vehicles, they need to transition. It's the purchasing power that the fleets have rather than buying ones, or twos, or tens or twenties of vehicles, the fleets that have significant amounts of vehicles that need to transition, and they need to manage that. I think that's where they can make a difference as well in terms of leading the way in showing the way.
Ade:
Totally. Yeah. It's exciting to see some of the big players in the eMobility sector, making a commitment to transition their fleets over to EV. We've had UK government with the decarbonisation transport plan announce that it's 40,000 strong fleet we'll go over ABB. And obviously a leading engineering force globally have announced that their employee base will transition over. That's a 10,000 strong fleet available for people think about that one. Russell what's going on in the national grid space in terms of some of these points here and questions around communicating and educating fleet buyers around the transitions in eMobility.
Russell:
Yeah. I'm obviously looking at this from the other end, from the infrastructure end. So it creates immense... you mentioned the government, there's lots of other companies and ourselves included in the committed there. So it's one thing always to make sure that fleet cars are aware of the infrastructure requirements that are required there. So let's again, use an example because it's an easy one to think about. So if you'll move into electric, what do you need in terms of charge point provision? So if you're a fleet and you have a depot, what do you need? Are you going to be charging your vehicles overnight? Are you going to have very high utilizations of vehicles? Do you need to put rapid chargers in there? Are your vehicles returning to base so they can go out on charge? Can they come back or they go across country?
So are you then going to need to think about, "I need a public charging network, which public charging network should I use? How do I access that as well?" So get all those infrastructure things, people think about them in a holistic way. So if all fleets think about them, then that multiplies up to the bigger infrastructure. So what's supporting behind that? So yes, it's important that you get your charge point into your depot, but if we take... look what happens behind the scenes. Let's think about that infrastructure that goes on behind: how do we get that wire to your depot? How do we get that big wire to your small wire, to your depot? If that makes sense. Talking about what we do at National Grid and making sure all those renewables hook up as well. Again, I'll beat the drum again for the small charger in there. I would say, "Well, let's make sure that we can charge those vehicles sensibly as well."
So that infrastructure you put in is economically as efficient as possible there. Also say in terms of fleet, then the ability to start to play in the energy market. Suddenly you've become an energy consumer far more than you did before for your building. So property will manage their energy really well, but suddenly you've got a battery... lots and lots of potential batteries sitting on your full quarter, on your depot or wherever it may be. There's opportunities to offer services to either your local grid in terms of balancing, we talked about charging up when the renewables are in the system. And then maybe discharging even the vehicle to grid. So actually, could you have your batteries discharging back onto the energy system? So always or maybe not sunny or not windy also, there's lots of potential opportunities for fleet management then to become energy procurement as well.
So they need to sort it with their energy procurement teams as well to make full use that. So suddenly another revenue stream has become available to the fleets when they are parked up was all to really... I think David, you mentioned earlier about sweating their assets as well. So when they're packed up, could we even start to sweat the assets there by offering services to the grid?
Ade:
I was going to ask you about hydrogen and biofuel vehicles. We're all getting very excited and perhaps this podcast and this conversation has majored on EVs and eMobility. But David, what are your thoughts from an EY perspective on the hydrogen, biofuel fleet mix?
David:
Yeah, so I think it's like many things there's not one size fits all and I don't think there'll be one answer to everything. There are so many different permutations, different use cases, different needs that people have. And the way, if you think about the book ends of the spectrum at the moment, so you could think about just a small passenger car that will move to and already is moving to an electric vehicle. And then you go all the way up to SUVs, into trucks, into commercial vehicles, into heavy goods. And I think the other bookend and the other end of the spectrum would therefore be, probably hydrogen. That's probably the use case with the larger vehicles, but there are so many things in between that. And you could think about a heavy goods vehicles that is doing last mile delivery.
Well, that was considered to be probably a hydrogen use case previously that's now absolutely moving much more towards a battery use case, because of the niche UC has and I think there'll be everything in between. So I think there'll be general trends that satisfy different types of vehicles. But I think the specific use cases will make it a little bit more complex and one size fits all or even two size fits all.
Ade:
Thanks so much, indeed David. Russell's mentioned a little bit about national grid's fleet commitment. So put you and put EY too much on the spot, but what can you tell us about EY's commitment to transition its own fleet over to zero emissions vehicles?
David:
Yeah. You're not putting us on the spot at all, Ade. It's a very good question. So unsurprisingly, it's something clearly we're working on. We're very active on this at the moment, we're not in a position where we can declare something publicly. But from a global perspective, but what we have seen, our colleagues in Belgium, they have publicly committed. That was announced a couple of months ago that they are transitioning their fleet of vehicles. And what I can say is that we're actively working on that with other markets and other countries as well.
Ade:
So I said I didn't want to put you on the spot. But maybe to put you on the spot a little bit, are you saying that that Belgian model will transition over to other country offices in the EY world?
David:
I think what we're doing at the moment is I think what most people are doing, we're testing, we're learning, we're trying to find out what is the... I wouldn't say the best solution because I don't think there is best. I think there are better solutions. So we're learning and we'll adapt and then we'll take that to other markets.
Ade:
I think there's a very strong career opportunity for you in politics, if ever you should decide to go in that direction, David. A very good, a very political answer. David, anything else you'd like to contribute?
David:
We can always learn from what's gone before. And so clearly what's most... a lot of fleet users are using commercial vehicles and heavier goods vehicles. That's not as advanced from a product perspective as passenger cars. So I think we can learn from what's happened with passenger cars. What we see at the moment is the availability is still not there for commercial vehicles, but it's absolutely coming. And I think it's really understand that in terms of seeing the trends and what's happening with pricing of vehicles that on passenger cars, it clearly is dropping. We will get to that tipping point where you get equity in terms of parity... sorry, in terms of the pricing. If you're thinking about it from a total cost of ownership perspective, it obviously happens quicker.
So I think understanding that the products are coming, the manufacturers of all making very, very significant announcements in the last few months. So the products will be there. The prices will drop as we go through the decade. And I think for me, the biggest challenge, and I think this was recognized in the announcements from governments in the last day or so, it's really about the need for infrastructure as well. And Russell mentioned this earlier. That for me is probably where we need a little bit more focus and a little bit more support. And frankly, I think it's a little bit more complex as well.
Ade:
Absolutely. Russell, I know there's that question you get asked perennially, can the grid cope with the huge rise in EVs? For those who haven't heard of the national grid response to that question, would you mind outlining the answer to that one please?
Russell:
Yes. We get that question a lot, whether the grid can cope. I think when that question is asked then we break it down into a couple of parts. So the first part is, can you get the energy to your, let's say electric vehicles here, because it's a good way to think about it. So obviously that energy, that electricity has got to be from renewable sources. And if you look in the detail of the recent net zero announcements, there have been quite a lot of them. But if we go back to, I think it was around October, November, when it was 10 point plan... So Boris Johnson gave his 10 point plan. And one of them was the commitment of offshore wind. That was a significant increase in that. So there was a commitment to 40 gigawatts of offshore wind by 2030. So it's only nine years away. And to put that into context, there's around 10 gigawatts today. So in very simple terms, that's where your energy is going to come from, an uptake in renewable energy.
Now, of course, how are you going to get that renewable energy into your car? So of course those offshore wind farms need to be connected to the grid. And that's partly our job to make sure that that happens economically and efficiently as possible. Of course, you then need to make sure that the charge point infrastructure is there. And we've touched on what rapid charge as well. So making sure rapid charging network is there at motorway service areas, and hubs and other places where it needs to be. So there's two ends of the infrastructure that need to be done. Of course, there's going to be some infrastructure in the middle that's going to be needed to be upgraded, to make sure we can get that power from the big wind turbines right into people's cars. And that works on an energy point of view because one of the things you do is make sure that the supply and demand are banished. And we've talked about that kind of symbiotic relationship, if you like between wind and EV.
So you need the renewable power from the offshore wind to be able to support electric cars, but because there is a choice about when you charge your electric car, you can charge it overnight, for example. You can even then charge when it's windy or it's sunny. So your EV charging can align up to the wind and weather conditions as well. So again, you get that symbiotic relationship as well. So renewables help electric vehicles and electric vehicles help renewables. So very briefly that's how the grid will cope with that. Equally we could replace electric vehicles with say production of green hydrogen. As well, green hydrogen we will need renewable power as well there. So whatever the fuel source, if you like, whether that's electricity or hydrogen, you can see a similar story playing out there.
Ade:
I know Graham Cooper was part of the government's all transport decarbonisation plan. I assume National Grid fed in some ideas around the introduction of smart charging for those very reasons. Is that right?
Russell:
Yes. Graham's been heavily involved with that as well. I should also say our system operated by the business, the ESO, electricity system operator, it's a legally separate part of the business. They fed in very heavily to that as well. They're responsible for balancing the system. So they will directly benefit from smart charge as well. But yeah, as you can imagine, we have conversations with the department of energy and public transport, as well as do our system operator colleagues have absolutely been involved in that from day one.
Ade:
Very good. Well, thank you very much, indeed, both for those super sage insights into the subject of fleets and decarbonisation. Thank you very much indeed, David. Thank you Russell for joining us today/ to wrap up, can I ask you both what the next step that you would personally like to see in the fleets sector is?
David:
So I'd probably just offer one thought, Ade. We've touched on it quite a few times as we've been talking. And I think what Russell's just done there is a great example of this. I think it's touched on awareness and understanding, so awareness, communication, understanding, and education. Whether we're talking fleets or end consumers, that for me is vital. And I think if we can get that right, it's going to help this transition accelerate much better.
Russell:
What I would say is making sure that when people think of transport, they think of the underlying energy infrastructure as well. We mentioned the symbiotic relationship. I'll have that probably as my final thought there, that we need to think about the energy infrastructures needed to support transport even more. And we need to think about it at the same time or ahead of where we're thinking about it. As I say, we can't have our entire fleet of electric vehicles and no infrastructure to charge them. So we need to make sure we do that. And fleet managers think about that. And planners think about that and the government think about that. And energy industry and transport industry all think about that together, working close together.
Ade:
Well, you both referenced education there. And so hopefully in some small way, this EV Y podcast on fleets on the whole series will help in that education piece. So thank you very much, indeed. Both for joining us for such a fascinating discussion. Thank you very much.
David:
You're welcome. Thank you, Ade. Thank you, Russell.
Russell:
Thank you, Ade. Thank you, David. Really great conversations.
Ade:
Now, to end every episode we will be highlighting an exciting and innovative hyper fast growth company in the sector. Today, we have Carla Detrieux, director of business development at Volta Trucks to tell us all about Volta's journey. Thank you so much, indeed, Carla, for joining us.
Carla Detrieux:
Thank you, Ade as ever for giving me this opportunity to chat with you and share my perspective and my experience.
Ade Thomas (host):
So what did you see in the eMobility sector in particular that really excited you?
Carla:
Obviously, such a big transition is a great opportunity for companies, but also individuals I think, to flourish and develop themselves. There's nothing that has been done in the trucking industry. There's no set rules, anything is possible. So being in a team of very passionate people that want to make it happen is really what attracted me. Again, there's everything to be done. So an amazing boulevard in front of us to develop ourselves.
Ade:
And in this section of the EV Y podcast, we're looking at hyper fast growth companies of which Volta Trucks is certainly one. But I bet you didn't imagine it would be quite this dynamic when you entered into this sector just over a year ago now or did you?
Carla:
I think sometimes I get confused. I don't know if it feels like days or years, because this year has been high speed, is gentle. It's been non-stop. Customers' traction, engineering development. I've been involved in all kinds of discussions. We're making something very big from a small team and we're scaling super quickly. So head counts are growing every month. So is our focus on new markets and to give you an example, so we are conducting a European roadshow. And the way it started was let's take the truck for a few days in Paris and see the reception. Next minute, we are going all across Europe and the US as well because the traction has been outstanding and we made the most of it and thought, "This whole momentum, we need to make the most of it." So it went from a few days in Paris to a mega roadshow all across the world, which is illustrating where it starts and where it takes us.
Ade:
Very good. And so let's talk a little bit more about the Volta Trucks and business model specifically. I know Volta has a number of core pillars to its work. Tell us about the Volta's core pillars please.
Carla:
Sure. So the starting point is that we are defined as an OEM, but we are so much more than just an OEM. We are bringing a solution to regulations that are flourishing all across the globe for low emissions zones. So electrification is very much a starting point from a blank sheet of paper, sorry, we are able to redesign and conceptualize a truck, but we go again beyond just emissions. There's a very important problem around safety in city centers that we are definitely trying to tackle as much as we can. So very much our ambition is to become the safest OEM, both for drivers, but also for pedestrians and cyclists. And then in uses. Because there's a lack of acceptance when it comes to trucks in the city and we want to tackle this because again, COVID has highlighted that we need trucks. We need heavy supply and volume in our cities, and then the third one is very much the driver shortage.
Carla:
We are aware that this is a global problem and by bringing a truck that gives the best experience to drivers, that facilitate their daily tasks that are exhausting and dangerous. We want to give them the best work environment possible and also give operators a competitive advantage when it comes to recruiting and retaining their drivers. We want to make, basically, drivers our ambassadors. So creating a community, make a community of drivers and speak to them because we feel like OEMs are a necessity. We have two challenges. We have the person sitting in the office that... our customers, because they are signing the paperwork basically. But the drivers are such an important workforce that we also need to speak to and value. So yeah, there's very much the three top pillars that are the core of Volta.
Ade:
Thanks so much indeed for those insights Carla and let's move on to have a chat about sustainability, which I know is a really, really key part of Volta Trucks' mission and indeed a major thing that needs to be addressed across the mobility space. We understand that 30% of all CO2 emissions come from heavy duty vehicles, according to the heavily respected body, transport and environment. So how important is that CO2 emissions piece to Volta Trucks' mission?
Carla:
I think there's two very simple ways to reduce emissions; either you remove the amount of trucks that are on the road or you change... or you have an alternative in terms of fuel. So we want to combine the both. So by bringing to market heavy goods vehicles that can remove smaller vans, we can optimize the workforce, optimize congestion. And again, within the electric vehicle, the goal, the ultimate goal is to remove CO2 emissions and particles and knocks from the cities. So our customers are asking us, "How can we make this happen?" Because they obviously work, for retail for very important or high image customers that also are putting pressure on them saying, "We want to decarbonise our operations, let's find solutions."
Carla:
So this is really how we want to help the whole ecosystem because not only customers and cargo owners want this to happen, we have all of the communities living in cities. All of the public administration staff want this to happen. So we're very much trying to involve everyone in the discussion and educate them on the benefits of electric vehicles.
Ade:
And tell us a little bit more about how as a startup Volta Trucks is perhaps more uniquely positioned to deliver against some of these objectives than some of the historic OEMs.
Carla:
I think that the key differentiator or the disruption is first of all, around the product. Ade, you're very familiar with with the Volta zero, and it's outstanding how unique it is compared to all of the solutions on the market. And tackling again, these three problems that we mentioned before. Then the disruption is around the service associated to the vehicle. We don't only want to sell trucks. We also want to provide the full suite of services and assets that our customers need to operate their vehicle. So the end goal is to provide, on a subscription-based model, the full suite for operation success. So one point of contact, one invoice and one dashboard of data. This is very much where we see ourselves and we see it as a rapid enabler to EVs because it tackles all question marks or anxieties that we can have linked to asset possession.
And then disruption is also around maintenance service, real assistance and level of service. We want to be able to provide the best service and a unique service and same service all across different markets, which is important to mention. We don't do the same business as historic OEMs because we are 100% targeted on one vehicle as a starting point, but four, which is quite a small range. A small, but very focused range. And something that I hear regularly is around maintenance network. So how are you going to manage fleet deployment when you don't have an existing network? That's true. This is why we have a city by city rollout plan, where we integrate the service network before we deploy the fleet.
But this isn't a valuable answer when we use the existing old maintenance network as an advantage, because if your service network and your thousands of employees aren't trained and equipped on the technology that you're trying to develop, and you still have a full range of natural gas, diesel and all of these other fuels, it's very hard to penetrate a market as quickly as we can.
Ade:
Yeah, absolutely. And thanks so much indeed for that. Let's finish off. You mentioned some of the points from your customers. What are some of the more positive points when customers get to understand the Volta Trucks business model, get to see the Volta zero. What are some of the most exciting conversations you have around your customer's vision for how the Volta Trucks model and the Volta zero can deliver for them?
Carla:
We have some very creative customers. So instead of having real estate depots all across the city, I have the example of one customer that would like to use the Volta Sierra as a mobile hub, and then have a cargo guy so e-scooters picking and dispatching for the very, very last mile... let's say last meter. So this is creative business models that are flourishing. So the last mile industry is completely changing, I would say. And it's a challenge, but it's very exciting. And to answer your question, like you said, we are coming from a startup in a remote environment where we've been doing everything through 2D to taking on customers on this European [Rocher 00:42:31] and actually feeling a product. A fully developed demonstrator. And this completely triggers engagement. And then people realize, "Okay, this is happening now." So it's super exciting, super refreshing, and also meeting people in real life face to face. It feels like we're kind of coming back to some normal, so very exciting.
Ade:
And it sounds like it's personally very, very exciting for you as an individual.
Carla:
It definitely is. I often say I never thought I'd be in love or so passionate about a truck, but I'm totally in love and feeling blessed to be part of this mission and this incredible team.
Ade:
Well, Carla, I hope you on the Volta zero have a very happy future together.
Carla:
We will. Certainly will.
Ade:
Thank you very much for joining us-
Carla:
Thank you.
Ade:
On the EV Y podcast.
Carla:
Okay.
Ade:
So that's it for episode two of EV Y. Thank you for joining us today. We've got four more episodes upcoming in the series. So please do subscribe to stay up to date with those. Please do keep sending in your questions and comments to our podcast contributors to evsummit@green.tv and we'll see you back here for episode three.
If you’d prefer to listen on the go:
Presenters:
David Borland – EY UK&I Automotive Leader
External presenters:
Russell Fowler – Senior Project Manager for Transport Decarbonisation at National Grid
Carla Detrieux, Director of Business Development at Volta Trucks
Ade Thomas, Founder of Green.TV and EV Summit
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