It’s been more than 100 years since Henry Ford’s Model T revolutionized the way the world moves people and goods. Ford didn’t invent the car, but over the course of about 30 years, he transformed the way vehicles are manufactured – increasing volumes, driving down costs, and converting them from expensive novelties to affordable conveyances for workers and families. Just as importantly, over the last 100 years, other entrepreneurs and innovators developed an infrastructure ecosystem to ensure these vehicles could be fueled, serviced, and customized.
More than a century later, we find ourselves on a new transportation frontier that is once again transforming the way society moves people and goods. This time we are transforming how vehicles are propelled, from internal combustion engines (ICE) to electric, and modernizing the fueling infrastructure. Gone will be the days of imported crude, cumbersome fluid tanker trucks, and lines at the gas station, in favor of producing fuel via localized grids and microgrids, and distributing that fuel via depot chargers, home chargers, and public charging stations.
As we approach 30 years since the first modern retail offering of battery-powered electric vehicles, it’s clear that EVs – of all shapes, sizes, models, and payloads – are here to stay. I am certain of this because nearly every day I witness the reaction of drivers when they operate a Lightning eMotors commercial EV for the first time – smooth, quiet, powerful, and equipped with safety features never before available on commercial vehicles. I see their response when we talk about efficiency of nearly 60 MPGe on the exact same vehicle that got 13 mpg as a gasoline vehicle.
These products and this industry are my passion. I have dedicated myself to creating a company that not only builds amazing products, but also builds products that make both environmental and business sense, a company that helps move the planet in the right direction. As CEO of Lightning eMotors (NYSE:ZEV), a leading manufacturer of commercial vehicle electrification, telematics, and energy and charging solutions, I have seen that it is possible to build exciting products that also have a compelling business case and are environmentally transformational.
Industry and Government Aligned
Not only has growing public awareness of the environmental and health benefits of electric vehicles led to government legislation and funding to promote the transition from internal combustion engines to electric, but evidence for the EV business case continues to grow as well. Companies of all sizes and purposes are dedicating resources to support the transformation of their fleets to electric vehicles.
In addition to the growing list of companies that has pledged a commitment to reducing their fleet impact on the environment, within just the past year the Environmental Protection Agency allocated $5 billion to replace existing school buses with zero-emission and low-emission models through the Clean School Bus Program. In addition, the Federal Transit Administration announced almost $5 billion for public transit agencies, states, and Tribal governments to support public transportation across the country through its Low or No Vehicle Emissions Program; and the United States passed the $1.2 trillion Infrastructure and Jobs Act and the Inflation Reduction Act, both of which provide billions in new funding for EVs and EV infrastructure. History has rarely seen industry and government so closely aligned on a path forward. This is yet another sign that electric vehicles are the future.
Specialty Commercial Vehicles
While it’s true, for the time being, that up-front costs are higher than their petroleum-powered counterparts, as industry continues to invest in EV technologies and as government continues to provide incentives to purchase, more electric vehicles are being manufactured. Scale is growing and costs are coming down. What’s more, data is proving that over their lifetimes, electric vehicles will last longer and require far lower maintenance and fuel costs.
Critics point to the bumps in the road for EV makers as proof that the endeavor itself cannot succeed. Of course, establishing a successful EV industry comes with challenges. But we are at the point where EVs have proven themselves to make sense logistically, financially, and environmentally, and transitioning from internal combustion engines to electric is both financially prudent and impactful for the environment.
A little-talked-about factor helping to lower the cost of entry is the increasing production of specialty commercial vehicles. In fact, according to the 2022 IEA Global Electric Vehicle Outlook, the business case for light commercial vehicles (LCV) is stronger than for cars, with sales of LCVs increasing 70 percent in 2021.
EVs in Commercial Fleets
Those of us who spent more time at home during the pandemic, marveling at how easy and ubiquitous home delivery has become, are probably not surprised by that. And it’s only increasing. In a post-COVID world, e-commerce sales are forecast to rise 37 percent from 2020 to 2024, according to Statista Digital Market Outlook 2020.
We estimate there to be 2,500 electric vehicles in use in commercial fleets across North America – many as transit buses and cargo delivery vans and trucks, but also as passenger vans, shuttle buses, school buses, ambulances, and motor coaches. And the number is growing every day, as business and industry recognize the value of zero-emission transportation options for customer satisfaction, growing investor demands for sustainability and, importantly, their bottom lines.
Adoption no longer depends on emotion. Choosing EVs for commercial use is a demonstrably smart business decision. It’s no longer a matter of if the world’s primary source of transportation will be EVs but when…and when is now.
Electric Vehicles are More Efficient
At Lightning eMotors, we see firsthand through our advanced telematics capabilities the efficiency of all our zero-emission vans, trucks, and buses through every phase of their lifecycles. Our vehicles have demonstrated between four-and-six-times better efficiency than their gasoline-powered siblings over the last 2.3 million real-world miles. In total, vehicles deployed by Lightning have removed more than 1,850 tons of CO2 from our environment.
As pathways toward adoption continue to grow, some companies will succeed, some will consolidate, and a few will fold. Regardless, the commercial EV market is now firmly established and will continue to make a positive impact on air quality, greenhouse gas emissions, and its customers’ bottom lines.
Henry Ford is quoted as having said: “Don’t find fault, find a remedy.”
The commercial EV industry is a remedy. It’s a remedy for business costs, efficient and effective resource use, and reducing carbon emissions into the environment, and it has been quietly making inroads into the mainstream for the past three decades.
Before long, the days of internal combustion engines dominating our roadways will be as much a symbol of the past as Ford’s Model T.
Tim Reeser is CEO and Founder of Loveland, Colorado-based Lightning eMotors