Is it finally time to lean-in to EV’s for your fleet?

The recent announcement from the Government of Canada regarding the Canadian Automotive Strategy has Canadians buzzing. Some see it as a pragmatic, detailed step process to electrification, others see it as too little, too late.

We see the shift as both an opportunity and commitment, which is a critical component to a successful energy transition.

The electrification industry is battling uncertainty right now due to lack of consistent and clear regulations, directives and metrics. This uncertainty is leading to paralysis. The Canadian New Automotive Strategy nudges both the consumers and businesses out of paralysis and into action.

You might be asking yourself, how does this mandate help businesses? From our perspective there is greater operational flexibility and significant support for decarbonization with this mandate.

There are 2 key pillars of opportunity:

EV Infrastructure Development

The Opportunity:

With a $1.5 billion investment via the Canadian Infrastructure Bank (CIB), the Canadian Government is trying to attract private equity to building out EV charging infrastructure.

The Icing:

There is opportunity for businesses to generate regulatory credits by investing in building and operating public past-charging stations (>150 kW).

More Icing:

Businesses can generate revenue with each EV charging session. Money in your pocket.

The Risk:

Historically, private equity has been keen to invest, but the risk premium put on utilization estimations made it cost prohibitive. With companies like Stable Auto hopefully investors can get more comfortable with the critical financial assumptions. Stable’s recent partnership announcement with ChargePoint shows positive signs of change.

EV Fleets

The Opportunity:

The policy prioritizes immediate affordability and operation variety over strict compliance with a single technology – meaning fleet managers can utilize hybrids and high-efficiency ICE (internal combustion engines) vehicles where EVs don’t make sense financially. This includes some enhanced first-year capital cost allowances for ZEV (zero-emission vehicle) purchases from a tax advantage perspective.

The Icing:

The Electric Vehicle Affordability Program (EVAP) offers rebates of up to $5000 for battery EVs and $2500 for plug-in hybrids.

More Icing:

The Green Freight Program specifically assists medium and heavy-duty fleets with re-powering existing vehicles and purchasing low-carbon alternative fuel options.

The Risk:

The changeover for a fleet takes time and money. Doing it in a strategic and systematic way, that takes into account Total Cost of Ownership, is the only way to execute it effectively when it comes to managing costs.

The trend to toward electrification remains clear if:

• • You have a well-articulated and aligned strategy.
  • Understand the value of the incentives, rebates and tax advantages.
  • Have electrification as part of your corporate strategy

Is EV Infrastructure gaining momentum? What about fleets?

There is some proof that represents a shift of out paralysis, as noted by National Resources Canada:

• • $84.4 million for 122 projects to install more than 8,000 electric vehicle chargers across Canada through the Zero Emission Vehicle Infrastructure Program.
  • $5.7 million for three projects through the Green Freight Program to help Canadian fleets reduce their fuel costs and emissions through vehicle re-powering, the purchase of low-carbon alternative fuel vehicles, and the implementation of best practices to improve fuel efficiency.
  • $7.2 million for 30 education and awareness projects, 11 of which are Indigenous led, to increase public and industry knowledge, and confidence related to EVs, EV charging and clean fuels.

What we are saying is lean-in, but be strategic, aligned and intentional. There is a clear opportunity to:

• • Be part of infrastructure growth, with long term benefits.
  • Transition your fleets in a more cost-effective way.
  • Educate your business, employees, and parters on opportunities to be part of the electrification of the auto industry.

Reach out to Castellare Consulting to learn more.