Summary
As the world continues to grapple with the challenges of climate change and environmental impacts, the transition to electric vehicles (EVs) has become more critical than ever. One of the most promising developments in this arena is the rise of electric fleets. These fleets, which consist of electric cars, buses, trucks, and other vehicles, offer a range of benefits that make them an attractive option for businesses, governments, and individuals alike. These benefits include environmental benefits such as clean air and carbon reduction, economic and affordability benefits by means of lower total cost of ownership, and community value in potential resiliency asset. Clean air benefits alone are estimated at $84 to $188 billion by 2050.1
The rapid advancements in battery technology and charging infrastructure have made electric fleets more viable than ever before. Modern electric vehicles boast longer ranges and faster charging times, addressing two of the most significant barriers to widespread adoption. Advances in telematics show better coordination with utilities. Customer technology advances in non-wire alternatives such customer facing battery charging fleet management software solutions with utility grid facing systems. These utility systems include Distributed Energy Resource Management Systems (DERMS) and Advance Metering Infrastructure (AMI) and grid intelligence and Advance Distribution Management Systems (ADMS). Coordinating customer and utility systems will improve use of variable renewable energy (solar and wind power) and contribute to affordable, clean and resilient energy.
Electric fleet owners also encounter challenges in achieving these benefits. Lack of utilities and coordination in upgrading equipment and/or delays in getting grid components in a timely manner are obstacles they encounter. Some fleets for medium and heavy-duty vehicles are not practical to electrify to meet their needs and/or are limited in supply. Regulatory incentives and programs may not offer enough incentives to electrify fleets. Available charging infrastructure is another challenge for any applications that require transportation outside of a local service area.
According to industry reports, the global electric fleet market is expected to grow at a compound annual growth rate (CAGR) of around 10% over the next decade.2 This growth is driven by the increasing demand for electric buses, delivery vans and other commercial vehicles, light duty vehicles and also tax credits and other subsidies. Recent political headwinds from the “One Big Beautiful Bill” expose risk to this growth and adoption which could impact it as much as 2-3%. This slowdown in growth and headwinds can actually provide opportunity for utilities to forge closer relationships with their commercial and industrial, government, and tribal customers. This can be done proactively with education and advocating energy shifting rate schedules or other regulatory incentives to lower energy bills and provide a cleaner community. These will result in improved customer satisfaction scores and argument higher returns on their assets with the regulatory bodies.
The Promise
Fleet electrification provides affordable, clean and resilient energy transportation options for businesses and government entities to consider. In addition, they provide benefits to the community by reducing noise and providing economic development opportunities to acquire new expertise in servicing the vehicles. They also provide an opportunity to develop new partnerships with their local utility which helps to manage capacity on the grid. Tax credits and other incentives have provided momentum that will continue to drive further adoption and growth.
Electrification has contributed to increased load growth, and utilities are looking for opportunities to expand their demand response. One such response includes load shifting to batteries to manage capacity during critical peak periods (high use of energy flowing on the grid). Some applications developed for school buses provide a promise to charge during non-peak hours and then deliver energy back on the grid when they are idle during hot summer months or normal school year operations. Other responses could be delivery trucks or garbage trucks that shift delivery times to provide discharging capabilities and do not disrupt mission critical operations. Electrification can drive innovative programs for energy equity and cleaner communities.
Other possible uses can add additional benefits. Using the energy stored with government entities’ fleets during or after disruptive events that impact critical infrastructure can help mitigate further harm. Enabling utility coordination can create flexible loads that increase overall community resiliency and reliability to localized grids.
Progressive states such as California, Oregon, Washington are implementing policies to continue accelerating electrification.3 Most of these states offer financial incentives to back their policy objectives.
Overcoming the challenges is key to unlocking these new value propositions.
Challenges in Utility Partnerships
Getting the initial fleet planning assessment on sizing and infrastructure is often an overlooked step. Missing this step can cause cost overruns and delays in getting the infrastructure sized or upgraded for the electrification efforts and associated benefits.
New policy shifts in the “Big Beautiful Bill” and tariffs are likely to disrupt supply chains further and are challenging the build out of infrastructure to support charging.
Availability of suppliers can also be an issue. Transit buses in the US recently experienced this when one of the major suppliers declared bankruptcy and limited available replacement part supplies in the US. This lack of replacement parts compounded the problem. Medium size and large vehicles in general have limited availability, and in the near-term light duty vehicles are the primary options for fleet electrification. On a positive note, there are multiple school bus suppliers available.
Regulatory and associated state policies can also impact progress. Some specific examples around compensation are the stickiest and deal with making sure fleet owners do not get double compensated for kwh hours they preserve.
Building and maturing proven policies will take time. The advancements in technology and its capabilities provide a tool to overcome many of these challenges, and cohesive collaborations going forward will only accelerate this adoption.
Call to Action
Often the most challenging aspect is knowing where to start. Conceptually everyone sees the value. However, at the start of planning, it is a challenge to address all the speed bumps, potholes and hazards and discover how to navigate around them. Breaking down plans in logical steps, identifying the value, costs and risks, and playing out the potential scenarios generates the best results. Finding seasoned professionals who know how to navigate the uncertainty and journey is key. Seeking knowledge and expertise in the planning phase can set the tone for successful outcomes. More importantly, it sets the tone to deliver affordable, clean and resilient energy solutions.
Conclusion
The transition to electric fleets represents a significant step towards a sustainable future. By embracing this technology, organizations can enjoy numerous environmental, economic, and operational benefits while contributing to the global effort to combat climate change. As battery technology continues to improve and charging infrastructure expands, the adoption of electric fleets is expected to accelerate, paving the way for a cleaner, greener, and more sustainable world. Collaboration and coordination with local utilities will only enhance the experience and knowledge that enhances the well-being in everyone’s community.
The projected growth for fleet electrification is quite promising. As governments and companies worldwide push for greener and more sustainable transportation solutions, the adoption of EVs in fleets is expected to rise significantly.
- National Library of Medicine ↩︎
- Cervicorn Consulting June 27, 2025. Report here. ↩︎
- NC Clean Energy Technology Center, February 7, 2024 ↩︎