Fleet Deployment Will Drive Future of Mobility

Momentum equals mass times velocity. Today, electric and autonomous commercial vehicles have momentum in a way that hasn't been seen since their technology was incepted. Climate change has intensified our desire for a future with zero emissions as COVID-19-related supply shocks have intensified our desire for faster, automated supply chains.

But how do we show tangible results in 2021 and 2022 that create the business case for rapid scaling of new EV and AV technologies in 2023 and beyond? Results that bridge the gap between today and where we’re going tomorrow?

The simple answer is commercial fleets. Medium-duty and heavy-duty trucks will usher in this new era of mobility. The business case is simpler, and the routes are more predictable than passenger cars. But, like anything that’s worth having, it’s not going to be easy.

Case in point, one of the first executive orders announced by the Biden administration was to replace 645,000 federal fleet vehicles with American-made EVs. A great initiative, both for carbon neutrality and U.S. manufacturing job creation, but most experts predict this fleet overhaul will take years before completion.

Likewise, the USPS recently announced an overhaul of its fleet – the first in three decades – will begin with 10% of the fleet being electric vs. internal-combustion-engine vehicles before fully transitioning to all-electric down the line.

For fleet owners and electrification-focused supply chains, transitioning fleets to electric is an enormous, layered commercial opportunity. Strong public-private partnerships are imperative to these efforts and are the mechanism by which fleet electrification is successful.

The focus on medium-duty fleet electrification is strategic as it will have the greatest near-term impact on air quality in the most affected areas of the country. And it will drive demand for advanced battery technologies. This will lead to innovations that will lower EV component manufacturing costs and bring about EV price parity (which is the largest barrier to EV adoption).

It will be critically important to educate audiences like small business fleet owners and school districts on the benefits of switching from diesel to electric. Businesses and school districts have such compelling cost-saving stories. Using an electric medium-duty bus instead of a diesel bus could save a district $6,000 per seat, or some $230,000 per bus, over a 14-year lifespan. States like Michigan are leaning into this conversion. Michigan's Department of Environment, Great Lakes and Energy has even created a new grant program to flip school buses from diesel to electric.

As far as work vehicles, light-duty truck transition can guide efforts with medium-duty. ~60% of Ford F-150 pickup buyers, many of whom use their vehicles for business, chose more fuel-efficient V-6 engines in 2020 if given the opportunity. This is evidence that the industry and targeted programming can convert small business owners.

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However, all is not lost in these heavy-duty situations. There are solutions that can be leveraged. Michigan-based Remora has created hardware-based technology that captures the carbon emissions from a semi-truck and sells the captured carbon dioxide to concrete producers and other end users. Through a reimbursement model, truck owners earn new revenue while meeting their climate commitments. Remora’s device retrofits onto existing trucks, mounting between the truck and its trailer, attaching to its tailpipes, and capturing at least 80% of its carbon emissions.

Meanwhile, autonomous capabilities for long and short-haul trucking continue to gain momentum and funding.

Gatik, a startup developing an autonomous vehicle stack for B2B short-haul logistics, closed a $25M series A Round in late 2020 following partnership programs with Walmart and Loblaw that tapped into the company’s retrofitted trucks and Ford Transit vans to deliver goods to both fulfillment centers and directly to consumers.

Earlier this year, Plus, a leading company in self-driving truck technology, announced the completion of a $200M round of private funding. With this new funding, Plus is starting mass production of its Level 4 self-driving system with FAW, the world’s largest heavy-duty truck manufacturer. This comes after they successfully completed the first coast-to-coast freight run with an autonomous truck, which hauled a fully loaded refrigerated trailer of perishable cargo in less than three days, back in 2019.

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Widespread adoption of self-driving trucks will likely require “autonomous truck ports” (ATPs) located near major interstate exits where local human drivers bring trailers from factories or warehouses. And then swap the trailers over to autonomous tractors for long stretches of highway driving.

That said, one of the biggest concerns with increased automation in trucking is job displacement. It is our responsibility to ensure the right policy frameworks and training programs are in place for the 21st century trucking workforce. Any funded public-private partnership cannot only focus on deploying autonomous technology as swiftly as possible. The autonomous movement of goods needs to focus on two critical aspects.

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The second aspect is to set regional commerce and job goals when deploying advanced technology and infrastructure meant to increase cross-border (state-to-state and international) fleet logistics flows. An example would be setting metrics to measure the increasing regional share of market and net job creation that is gained from autonomous and electrified freight corridors. In Michigan, examples of key corridors would be I-75 between Detroit and Toledo (I-80/I-90) and I-94 between Detroit and the Indiana Border.

Time, like momentum, goes by fast. Now is the time to invest in and establish these technologies through prioritized, conscientious fleet deployment.

Trevor Pawl is the Chief Mobility Officer for the state of State of Michigan.