The Bridge To Alternate Fuels Continues To Shrink; Fleets Recognize Need for Analytic Tools For Adoption Decision Making
FORT LAUDERDALE (November 14, 2023) – Fleet Advantage, a leading innovator in specialty financing, fleet data analytics, fleet management services, and life cycle cost management announced today results from its latest industry benchmark survey where the company took the pulse of industry leaders on topics ranging from equipment utilization and operational trends; preferred financing methods; alternate fuel trucks; and barriers to adoption of alternate fuel trucks.
Continued emphasis on shorter truck life cycles
The majority of respondents (59%) indicated they are operating their trucks five years or less before replacement, which continues to support today’s greater focus on shortening asset life cycles. This number was also 59% last year, up from 45% two years ago. This also coincides with most respondents (40.7%) listing improved fuel economy as the top motivating factor in securing new trucks, followed by lower maintenance and repair expenses (33.3%), both being benefits of shortening truck life cycles. Another 18.5% mentioned they are focused on right-sizing the number of trucks in their fleet to align with economic conditions. Furthermore, slightly more than a quarter of respondents (25.9%) said they feel today’s higher costs of fuel, maintenance and borrowing make long-term contracts less attractive.
Fleet respondents also noted they were reducing their life cycles as more than half of respondents (51.9%) indicated they have the fewest number of trucks in their fleet model years 2018 or older.
Alternate fuel truck adoption trends
Last February we asked which type of alternate fuel trucks fleets are most interested in. In that survey, 65% of respondents said they were most interested in electric trucks, while 15% cited hydrogen and 25% CNG. Forty-five percent of the respondents also noted that the time frame to deploy alternative fuel trucks would be 5-10 years.
In the current survey those numbers are shifting, with 33.3% indicating EV over the next 5-7 years (29.6% saying another 10 years), and 38.5% indicating hydrogen. This timetable for electric truck adoption continues to change, as just two years ago the majority (54%) said they didn’t plan to deploy electric trucks for 5-10 years. Also interesting is that the most recent survey shows that roughly 25% of fleets still do not see the value in adopting electric nor hydrogen trucks, respectively. All of this change reinforces the fact that fleets have unique timelines in how they wish to bridge over to alternate fuels.
As more legislation is introduced to mandate the movement toward zero-emission vehicles, fleets are monitoring how these mandates may impact their near-term truck procurement plans. According to the survey, 59% of respondents are either expediting their procurement plans because of CARB pre-buy, or they are closely monitoring to see how it may alter their plans.
Organizations with transportation fleets need tools to calculate total cost of ownership
Calculating the total cost of ownership, and visibility into overall ROI satisfaction continues to be a major challenge and a barrier to further alternate fuel adoption plans for many fleet executives. Costs and ROI calculations on alternate fuel trucks are still concerning to nearly 90% of fleet executives. In fact, 44% of respondents said they do not currently have a proper way of fully calculating all costs involved with alternative fuel trucks, and another 44% said they are not yet satisfied there will be a decent ROI on these vehicles. Twenty-two percent cited unknown resale values, life expectancy, range and fueling infrastructure, weight and distance, and unproven technology as other barriers to adoption.
However, when asked what type of financing options would make the most sense for adopting alternate fuel trucks, 52% said they would prefer a lease finance structure.
A large reason why many fleets have different timelines in alternate fuel adoption is simply because all fleets have a unique adoption “bridge” to cross. To help provide confidence in their decision making, Fleet Advantage earlier this year introduced EVAN (Electric Vehicle Analytic Navigator). The tool compares diesel versus an electric class 8 vehicle TCO, with modeling that evaluates fuel and mileage data versus kWh comparisons from the first year through a six-year life cycle.
“It continues to be clear that business agility, financial flexibility, and a strategic eye toward future fuel options remain front and center for companies with transportation fleets and for-hire fleets,” said Brian Antonellis, CTP, Senior Vice President of Fleet Operations, for Fleet Advantage. “Over the years our industry benchmarking surveys have been a great tool to identify trends and microtrends that are important to our industry’s decision makers. This year is no different, as we’re seeing the bridge to alternate fuel technology continue to shrink, and now fleets are beginning to realize they need the right analytic tools to identify the adoption time that makes the most sense for their organizations.”
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About Fleet Advantage
Fleet Advantage is the largest independent lessor for heavy-duty Class-8 trucks and has over $2.6 Billion assets and over 20,000 units under its Life Cycle Cost Management (LCCM) program. This comprises a client portfolio of more than 50 of America’s top corporate fleets, including five (5) of the top 10 private fleets in the country. Fleet Advantage guarantees the absolute lowest cost of operation by providing fleet asset management, financing solutions, and fleet analytics, using the latest equipment technology to achieve optimum vehicle productivity and maximum safety. Our model of TCO, clean diesel, and safety-enhanced trucks with shorter life cycles complement our customers’ ESG goals. The accomplishments of Fleet Advantage and our leadership team continue to be recognized for tremendous growth and industry leadership with numerous awards, including Top Private Independent and Most Innovative Firm by the Monitor Daily, Top Software & Tech Awards, Top Women Associates in Finance, and Green Supply Chain Awards to name a few. The company has also been named to Inc. magazine’s 500|5000 list of fastest growing companies in the nation.
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