BEV Leader Yet to Emerge Among Automakers in the Slow Push Toward Fleet Electrification

The growth potential for fleet electrification is steady, but fleet decision-makers remain cautious about making major battery electric vehicle (BEV) investments. Escalent’s latest Fleet Advisory Hub™ Fleet Electrification Brand Landscape Report has found that most fleet decision-makers are taking a slow and steady approach to BEV integration, suggesting a long road ahead for vehicle manufacturers seeking to gain a foothold in this sector.

Now in its third year, our 2024 Fleet Electrification Brand Landscape Report surveys more than 1,000 commercial vehicle and fleet decision-makers. The study captures evolving sentiments around emerging and established vehicle brands in the BEV space across the light passenger, commercial van, commercial truck, and medium- and heavy-duty vehicle segments, along with tracking progress toward fleet electrification.

Fleet Decision-Makers Want to Grow Mix of BEVs

Lawmakers have invested considerable resources to encourage and incentivize BEV adoption. However, our data indicate that the credits, grants and rebates made available through the Inflation Reduction Act (IRA) have done little to move the needle. Adoption of BEVs among fleets has plateaued at just over 20%.

Along with capturing overall adoption rates, we also gathered feedback on the level of BEV penetration among fleets. These data reinforce the limited progress fleets have made toward BEV integration. For example, penetration in light passenger vehicles—the in-segment BEV mix among powertrain alternatives—is at just 3%, meaning even early adopters are deploying only a small number of BEVs. The graphic below shows the BEV mix for other key commercial vehicle and fleet segments.

Still, fleet decision-makers share an appetite for expanding their BEV mix in the near future. Across all segments, fleet leaders told us they’d like to boost BEV penetration to between 8% and 23% over the next three years. This translates to growth rates between 136% (medium- and heavy-duty) and 159% (light passenger), providing automakers some positive news despite current market difficulties.

New BEV Brand Challengers Crowd the Competitive Field

As the number of BEV models in the market rises, so too does the level of competition that brands face. For now, established automakers still enjoy a decisive edge in awareness, opinions, and consideration among fleet decision-makers. Ford continues to lead the charge across all vehicle segments. Chevrolet and Toyota have scored well in familiarity, opinion and consideration in the light passenger and commercial truck segments. Meanwhile, the launch of its eSprinter van has enabled Mercedes-Benz to gain significant traction in the commercial van segment. The brand has jumped two positions in opinion rankings and one position in consideration while narrowing in on front-runner Ford in the leadership category.

Legacy brands aren’t the only players making strides, though. All but one of the startups profiled have achieved growth in year-over-year familiarity. Disruptors such as BrightDrop, Rivian, Polestar, Canoo and Arrival have led the way with increases of between 56% and 86%.

Also notable is the looming potential of Chinese-brand BEVs entering the US market, although the picture is admittedly muddy. Knowledge of those brands among fleet decision-makers remains limited, and currently more than half would not consider BEVs from a manufacturer headquartered in China. Despite this, BYD has emerged as an early leader within this group. One in five (19%) of those familiar with brands based in China can name the brand top-of-mind. NIO is a distant second with only single-digit (8%) top-of-mind awareness. It’s possible that Chinese manufacturers could break into the North American market in the same way that Korean automakers Hyundai and Kia did in the ‘80s and ‘90s. However, the geopolitical tensions and study data suggest this scenario is far from being realized.

Investing in the BEV Ecosystem

In some ways, BEV-native startups have an advantage over established automakers. Success of the BEV ecosystem relies on multiple interrelated components, including the vehicle, charging hardware, and charging and battery management software.

Established automakers face dual pressures. They must build new competencies or form partnerships to win in the BEV space while continuing to deliver on their brand promise for internal combustion engine (ICE) vehicles across the wide range of models they offer. On the other hand, startups can concentrate solely on building capabilities that align with the BEV ecosystem while zeroing in on specific vehicle platforms.

Regardless of size or scope, automakers wishing to succeed in the BEV market must find ways to address persistent issues hindering adoption. Just more than half (51%) of fleet decision-makers continue to tell us the technology needs to be proven. Fleet leaders need to see more success stories around driving range, battery life and replacement cost, and time to charge—all concerns that have increased in importance for fleet decision-makers since our 2023 study. Fleet leaders also voiced worries about the total cost of ownership (TCO) and public charging infrastructure.

BEVS Are a Complex Equation for Fleets and Automakers

Fleets, manufacturers and service providers have significant hurdles to overcome. Fleets have been running gas and diesel vehicles for a long time, and can intimately understand their operation and confidently project TCO with ICE fleets. BEVs, in contrast, represent uncharted territory.

Calculating TCO for BEVs, and related operating cost parity, is complex. Fleet owners may save on fuel but need to now factor unknown expenses such as infrastructure, repairs and maintenance. It could be several years before fleet owners realize the full return on investment BEVs offer. Meanwhile, automakers and service providers must provide transparent messaging around the true cost of operating BEVs and address persistent issues hampering adoption.

Electrification is still in its early stages and fleets need support navigating the transition to BEVs. By identifying the unique needs of each fleet and providing guidance on vehicle powertrain alternatives, automakers and their dealers can remain trusted partners to fleet decision-makers. However, until a brand can solve the puzzle of delivering both a strong product and a robust supporting ecosystem for the fleet sector, BEV adoption will likely remain sluggish—leaving the field open for a leader to emerge.

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