2021 Fleet Trends – Electrification, Sustainability and Operational Efficiency
One of the most exciting aspects of a new year is understanding and delving into the trends that we can expect to see. Electrification and sustainability are part of a movement that isn’t slowing down any time soon, as is the move towards even better operational efficiency.
This week on the Fleet FYIs Podcast I’m joined again by the Executive Vice President of Operations for Quanta Services, INC., Dave Meisel, and this week, we’re taking a look at what we can look forward to in fleet this year. It’s all about trends – electrification, maintenance, operational efficiency and so much more.
Here’s a quick summary of my conversation with Dave:
New trends are exciting and invigorating – those for the fleet industry are no exception. New technologies, carbon neutrality announcements from major manufacturers and new pledges to become more sustainable are growing month over month, and Dave shares some insights as to what he’s expecting to see in 2021. Here’s a few key points that he had to share:
“An electric vehicle today isn’t the same electric vehicle as even five years ago. The cost is significantly lower today as the battery costs drop. The range has doubled, tripled, quadrupled tenfold in some instances. That makes it much more practical from a user’s perspective in the utility space.”Dave Meisel, What Can We Look Forward To In Fleet – Electric Vehicles, Maintenance and Operational Efficiency Trends | Utilimarc Fleet FYIs Podcast
“Electrification, for the most part, doesn’t change our business in ways we don’t understand. It changes it in ways we do understand. It changes the way we feel. It changes our sustainability.”
This is the second episode in a three-part series where Dave and I break down a few aspects to sustainability and what to look forward to this year in fleet that you may not have thought about. If you’d like to have a listen, it’s available to stream on all major platforms – but if reading is more your style, take a look at this episode’s transcript below:
What Can We Look Forward To In Fleet – Electric Vehicles, Maintenance and Operational Efficiency Trends | Fleet FYIs: Season 2 Episode 3
Gretchen Reese (00:06):
Hey there. Welcome to Fleet FYIs, the weekly podcast by Utilimarc that reveals how you can make the most of your data for smarter fleet management. My name is Gretchen, and every week, you’ll hear from me and some of the industry’s finest in candid conversations that will shed some light on not only two decades worth of data insights, but some of the industry’s hottest talking points and key metric analysis with the aim to help you better understand your fleet from every angle.
Gretchen Reese (00:33):
But before we begin, if this is the first time you’ve heard our show, thanks for stopping by. I’m so glad you decided to come along for the ride with us, but I’ve got a quick favor to ask you. Once you’ve finished today’s episode, if you could take a few minutes to leave us a review on your favorite podcasting platform, we would really appreciate it. Give us a rating, five stars I hope, or tell us what you liked or leave us a comment or a question about what you’ve heard in today’s episode. But if we haven’t yet covered a topic that you’re interested in hearing more about, let us know. We would be happy to go over it in detail in a later episode. If that sounds good to you, let’s get back to the show.
Gretchen Reese (01:17):
Hey, everyone, and welcome back to another episode of the Fleet FYIs podcast. How are you all doing today? I, for one, am looking forward to the weekend. Minnesota had a bit of an Arctic blast to say the least last week. Hello negative 35 degree wind chill, negative 37 for all my Celsius folks out there. This weekend, it’s supposed to be just a little bit better. We’re back above zero and there’s some much needed sunshine that will make being outdoors quite enjoyable indeed, at least I think so.
Gretchen Reese (01:46):
But back to the topic at hand because I’m sure most Midwesterners will agree with me here, we could talk about the weather for a long time. We’re almost known for it. But this week, we’re back with part two of the new series that I’d introduced last week with Dave Meisel, who’s the executive vice president of operations with Quanta Services.
Gretchen Reese (02:07):
Last week, Dave spoke about sustainability and some of the consequences that many people, including myself, don’t always think about when it comes to the push to electrify a fleet, and for that matter, electric vehicles in general. He also spoke about the shift in generational attitude when it comes to sustainability. And personally, I found that incredibly fascinating because what I’m learning now is that it does differ, but that’s not always the case.
Gretchen Reese (02:33):
So if you haven’t yet listened to that episode, which I would highly recommend that you do, make sure you add it to your queue to listen to once you finish this one because you won’t want to miss what he has to say today. This whole conversation around sustainability and electrification, it leads perfectly into what we’re continuing this sustainability miniseries with today, which it’s what we can look forward to in the fleet industry for 2021 and beyond. I think you’ll really enjoy this episode. I certainly gained a lot of insight from it myself, and especially when you add in the changes in fleet management from throwing COVID-19 into the mix, I mean, talk about a skew of the data there. But without further ado, let’s jump in because I can’t wait for you to hear this one.
Gretchen Reese (03:23):
All right, Dave, we are back for the second week in a row. Let’s get started with this episode by chatting about 2021. It’s a new year with hopefully, fingers crossed, a little bit more of a normal outlook for operations to come. Now, keeping this in mind, have you seen any, just in this first month of the year, have you seen any emerging trends for the fleet industry just come out sticking like a sore thumb?
Dave Meisel (03:52):
I will say I think there’s several things that are starting to stick out anyways. And when you look at the amount of major manufacturers that are now talking about changing from gasoline and diesel to electricity, it’s no longer these tiny little startup companies. It’s now really big companies, the General Motors and the Fords. And they’re not just talking about little vehicles anymore, these little compact cars, they’re talking about pickup trucks and SUVs and big trucks, right? That is what I find to be really fascinating, is how quickly and at what a width of product line that these manufacturers are looking at.
Dave Meisel (04:35):
I think the second thing that I see, and I look at this maybe outside of the vehicle space, I see companies all around now looking at this as a productivity opportunity. And I will say electric vehicles/autonomous equipment, you’re going to need one to do the other one, and you’re going to need 5G to do that well on main populated roads.
Dave Meisel (05:10):
So I see that as, in our industry, that’s a tremendous business opportunity for the utility industry, whether it’s installing 5G nodes or whether it’s upgrading infrastructure or building charging infrastructure. That’s a tremendous opportunity because of this technology change in our business. And then I see people looking at that and saying, “Gee, how does autonomous equipment help me?” When we think about responding to storms, many times the first half of somebody’s day or the entire day is just driving to the storm, and then they go to bed. And so we lose 12 or 15 hours of response time sometimes.
Dave Meisel (05:55):
The ability to use autonomous equipment or platooning of vehicles or that type of thing without linemen being in them so we can reposition equipment and not lose the hours from the lineman’s day, that is a tremendous productivity initiative. And I don’t necessarily mean that from a profitability perspective, but when you think about how productive our linemen are when they’re in a storm, they can do a tremendous amount of work in 12 or 15 hours. And I’d rather have them hit any storm and hit their kind of their rebuilding efforts the first hour they’re there, not spend 10 or 12 hours driving there, then go to sleep, then the next day get up and do it. It’s all about how fast we respond to our customers. And the world today depends on electricity more than ever before for phones and everything.
Dave Meisel (06:57):
And so I think when we think about the productiveness of our crews and the ability to get them to an emergency and get them working as fast as possible, I think autonomous technology is going to drastically improve that. So I’m looking forward to that, but that’s going to be interesting to watch.
Gretchen Reese (07:20):
Certainly. And I liked what you said about electrification because obviously there’s been a massive push in the last few years for introducing more electric vehicles and potentially exploring their opportunities within fleets that aren’t just passenger fleets like rental cars. Do you think that the attitude has shifted at all surrounding fleet electrification or has it remained relatively consistent with the I’m not sure if this would truly work for utility fleets or other similar types like construction, municipality, what have you?
Dave Meisel (07:51):
Well, I think it’s absolutely shifted. And I talked earlier about the market has to be ready for it and it’s going to be buyer-driven. An electric vehicle today isn’t the same electric vehicle as even five years ago. The cost is significantly lower today as the battery costs drop. The range has doubled, tripled, quadrupled tenfold in some instances. That makes it much more practical from a user’s perspective in the utility space.
Dave Meisel (08:24):
So I absolutely believe that the desire to adopt, aside from any sustainability or environmental reasoning, the product itself is a better product and the product is in a better position today to meet the needs of the application, and I don’t think we had that five or six or seven years ago.
Gretchen Reese (08:48):
Absolutely. And in the episode that aired last week, we spoke a little bit about maintenance and how you said from a typical internal combustion engine, there was something like 3000 parts. And then in an EV, it goes down to about 20 to 30. What do you think that’s going to do in terms of having an impact on maintenance? Do you think if say, for example, a fleet adopted a huge presence of EVs, do you think that will change their scheduled maintenance or do you think it would be similar to what they’re doing now?
Dave Meisel (09:19):
Oh, it will absolutely change their scheduled maintenance. And I think a lot of it will depend on application. So for example, if we’re a pickup truck, what typically drives a pickup truck is the miles driven, and that’s usually a lubrication issue or a motor oil issue, right? There’s no motor oil in an electric vehicle. So the need to have it at 3000 or 5,000 or 7,000 miles just won’t exist.
Dave Meisel (09:47):
There is going to have to be some interval inspection that occurs, and we’ll have to figure out what those best intervals are, but I don’t think anybody I know really thinks it’s going to be anywhere nearly as short as what we have today with the internal combustion.
Dave Meisel (10:04):
The second thing I would say is this, the amount of maintenance of truck fixing is absolutely going to go down. There is no if, ands or no buts about it. You just have a couple of moving parts in an electric propulsion system. There’s almost no wear parts, and you just don’t have that in a traditional engine.
Dave Meisel (10:28):
So the mechanic’s jobs, or their tasks of maintaining equipment is going to go down, and the remaining ones are going to change. In today’s world, nobody typically will die if they stick a test light in the wrong cable in today’s vehicles. Potentially when you have a seven or 800 volt system on an electric vehicle and somebody cuts into the wrong wire, they can get electrocuted and die. That’s just not something that we have to deal with today.
Dave Meisel (11:01):
So there’s going to have to be different training. There’s going to have to be different skillsets. I talked with a gentleman yesterday and he asked me if I believe that the mechanic of the future was going to be an electrician. And I don’t think so. I think it’s still going to be a mechanic, but their electrical skills and the electrical training that we give them, it’s going to have to be significantly different and it’s going to matter a lot more.
Dave Meisel (11:25):
Today, like I say, if somebody is a novice working on electrical system, they might get a shock and they might burn their fingers, but it wouldn’t be anything more than that in most situations, right? And it will be potentially fatal in a true EV situation. So their job is definitely going to change, how they do their work is definitely going to change, but the maintenance is definitely going to go down.
Gretchen Reese (11:51):
I never even thought about that, if I’m being completely honest. I mean, that’s just crazy to think. I mean, obviously the introduction of new training definitely makes sense, but I wouldn’t have thought that there is a potential fatality risk just with the amount of charge that that battery would need to hold. That didn’t even cross my mind. Isn’t that crazy?
Dave Meisel (12:10):
Well, it is and it isn’t, but you have no reason to know that. And I don’t mean that in a bad way, right? What I mean is most people are drivers of vehicles and they just drive them, and then there’s people who fixed vehicles. The people who fix them have to have a different skill set than those who drive them, right? And I will say one thing I’ve learned about mechanics over the years, I mean, I started as a mechanic a million years ago, and they are passionate about what they do. They love their jobs. They love to learn. They love technology in general, and they’ll learn this too, right?
Dave Meisel (12:44):
It’s not the first time we’ve changed technology on mechanics. That’s a constantly changing environment for mechanics. Now, this is the first time we’ve done a big propulsion system change in their lifetime, but it’s not the first time we’ve upgraded technology on them.
Dave Meisel (13:04):
So they will make the transition. I’m not worried about that. But I think when you look at just the raw volume, you may need fewer mechanics, just a different skillset. That would be my guess. And I guess that remains to be seen, but I think that’ll be a foregone conclusion here. And we’ll be able to do that math over the next couple of years as we get more density of these types of vehicles. With a broader volume and a broader number of makes and models that get out there, then we’ll be able to do the math and we’ll make those decisions with a bit more certainty. But directionally, I think that’s what’s going to occur.
Gretchen Reese (13:41):
Yeah, absolutely. So if we shifted gears a little bit, staying on the maintenance track, but maybe more looking at internal combustion engines, do you think from this last year, I mean, obviously COVID was a huge factor in perhaps the increasing of usage for fleets with just using different vehicles so they could keep only one driver per vehicle used. Do you think there’s going to be an increase in maintenance needed, almost like a backlog type scenario just from the amount of assets that were used in the last year?
Dave Meisel (14:15):
I don’t think so, and let me give you my logic on that. There were certainly situations where we added pieces of equipment so that we could limit the amount of contact that maybe a crew might have. But in many cases, we saw the total volume of work go down in different pieces of the business.
Dave Meisel (14:39):
So if you were to look at the gas industry and I think the pipeline industry, they went down significantly in the amount of work that was available in that industry in total, just because they tend to work in large groups, right? And that didn’t really pass anybody’s idea as a good idea. The electric side was very, very busy.
Dave Meisel (15:04):
And so I think in one respect, yes, you definitely expanded the number of vehicles in one piece of the business, but I think you lowered the amount of work in other pieces of other businesses. And I don’t think we’ve seen anything when you add it all up that’s significantly different.
Dave Meisel (15:21):
So yeah, I mean, I get it. And I guess if somebody had a very focused business, they could see a pop because of their business, but if you had a broader business, I don’t think we’ve seen that.
Gretchen Reese (15:34):
Fair enough. That would have been probably I think one of my most, I would say, top five assumptions. Just from the amount of assets that were being used over the last year, I definitely would have thought that maintenance costs would have been up, just from keeping people in separate vehicles, like one person per cab. I definitely would’ve thought that maintenance would have gone up this year.
Dave Meisel (15:58):
Yeah. And I don’t think you’re wrong at all, honestly. It just depends on how broad you look, right? If you’re at a company that had a high density of those types of roles, their costs absolutely would have gone up. But what we have to remember is there’s an awful lot of people not working, an awful lot of people not working, and many of them in, in the industries that we work in or that we serve. And I don’t know that this is the right math, but for every one that’s got twice as much work, there’s one that’s got no work, and you end up back at ground zero.
Dave Meisel (16:30):
So I can just tell you when I look at our organization in total, I don’t see that and I don’t think any of our companies are feeling that, but I’m sure there are some that definitely are.
Gretchen Reese (16:47):
Absolutely. So just to get started in wrapping this up, if you had to give me maybe say top three, what are some of the trends in the industry that maybe you’re most looking forward to seeing come to fruition, either maybe in 2021 or in the next few coming years?
Dave Meisel (17:05):
Gretchen Reese (17:06):
Sorry to put you on the spot there.
Dave Meisel (17:09):
I will tell you I’m going to give you a one, a one A, and a three.
Gretchen Reese (17:14):
Dave Meisel (17:16):
I think the trend that I think is going to absolutely change the way we do business is going to be electrification. And I think it splits at that term. I think there’s a charging infrastructure component to that that is absolutely going to change the way that we all live, the way that we all do business.
Dave Meisel (17:38):
Companies are going to have to look at how they fuel differently. The technology, you can’t fuel an electric vehicle today in three minutes like you can a car. And that’s doesn’t sound much, but if you’re third in line at the fueling station, you have to wait an hour to recharge your car, right? Because to get 80% charge on most of them, even in fast charging, it’s 20 minutes. I don’t think we’ve kind of factored that in yet and what that’s going to look like. The idea that, well, you can charge at home is great, but most homes can’t charge one of the longer range batteries even in 24 hours. The house just doesn’t put out enough electricity to charge the battery.
Dave Meisel (18:20):
So I think that is both going to be super exciting to see how that plays out, and I think that’s going to be a real challenge area as well. And then I put the electric vehicle as kind of the one A on that. Absolutely every manufacturer I deal with everyday is all working on electrification all across the spectrum of vehicles. And I don’t think we’ve begun to see the types and the width of equipment that’s going to be electrified over the next several years, and that’s going to be really exciting.
Dave Meisel (18:56):
Then I would say my number three would be the autonomous side of this. It’s not nearly as ready as electrification is, but it is quickly coming up behind it.
Dave Meisel (19:12):
And that too has an infrastructure component with the 5G, installing that, getting a density that you need for redundancy and whatnot, but that has the ability to absolutely change our business in ways I don’t think we understand yet. Electrification, for the most part, doesn’t change our business in ways we don’t understand. It changes it in ways we do understand. It changes the way we feel. It changes our sustainability. Many things like that, I think we can wrap our heads around pretty quickly, but the idea that equipment can work without somebody, I don’t think we truly understand that yet or what that could mean.
Dave Meisel (19:58):
And so these are two technologies that we just haven’t seen something that can be this disruptive to what we do, but it’s coming and it’s going to be disruptive. And the question is, is how disruptive and how do we respond to that? And that’s going to be the exciting part.
Gretchen Reese (20:18):
Absolutely. But the question is, do you think it’s going to be as disruptive as changing a horse for a car? That’s the real question.
Dave Meisel (20:26):
Yeah. Well, I’ll give you my view. I think it’s going to be more disruptive, and let me tell you why. When switching from a horse to a car, it takes a long time, but we are so adept at speed of change and speed of technology change today, that I just think we’re going to go from gen one to gen two to gen ten before we can blink. And I don’t think you would have that change of adoption or that rate of change of technology at the horse level.
Gretchen Reese (21:06):
That’s true. That’s very true. So do you think that there’s anything else perhaps about looking forward in fleet in this year, maybe even in the next couple that we haven’t covered that you’d like to add?
Dave Meisel (21:22):
I can’t really think of any. I think there’s lots of kind of technologies that we all have out there today. I think when you look at GPS telematics, that’s going to certainly mature and you’re going to see a lot more apps based in our vehicles, whether it’s for cell phone management or whatever. But I think those are just kind of fine-tuning What’s already out there. I look at electrification and autonomous driving as truly technological change that is going to be incredibly disruptive in so many different ways. I don’t mean that necessarily in a bad way. I mean that in a good way, I don’t see those other technologies out there being, it will certainly change the way we do business, but it’s not going to be disruptive for the most part.
Gretchen Reese (22:16):
Fair enough. I think so too.
Dave Meisel (22:18):
I’m glad we’re aligned.
Gretchen Reese (22:30):
Alrighty. And that officially wraps up the second part of this three-part mini series with Dave Meisel all about sustainability and looking forward in fleet. I don’t know about you, but with major manufacturers now switching over to the creation of electric and hybrid models, more so than ever before I think that now is one of the most exciting times to be in a fleet or automotive industry. Because if you remember from last week, and this is speaking purely on the electric vehicle branch here, the propulsion system for a vehicle hasn’t been changed or had a complete overhaul in over 100 years. The last time it changed this massive happened was when we went from a horse to a petrol-powered motor, which is crazy to think about. So there’s certainly space for a bit of push and pull and of course differing opinions on the topic.
Gretchen Reese (23:16):
Dave also brought up an interesting point on our dependence on electricity with technology, our mobile phones, et cetera, but now also on the vehicle circuit. And if we look at this dependence on electricity from a maintenance perspective, just the large amount of new training for mechanics worldwide as we begin to adopt this technology, it’s going to be really interesting to see.
Gretchen Reese (23:39):
Mechanics certainly are one of the most important aspects of literally keeping a fleet up and running, and with the shift to electric vehicles and looking forward for different maintenance trends and different trends coming out of COVID, it’ll be really interesting to see how their day to day will change in the long run. Time will certainly tell on this one though.
Gretchen Reese (23:58):
I’m curious to know what you guys thought about what Dave had to say. Let us know on LinkedIn by using the hashtag UtilimarcFleetFYIs So we can see what you think, because who knows, maybe an idea of yours just might make it into a future episode.
Gretchen Reese (24:14):
Hey there. I think this is the time that I should cue the virtual high five because you’ve just finished listening to another episode of the Fleet FYIs podcast. If you’re already wanting more content, head over to itilimarc.com, which is Utilimarc with a C, U-T-I-L-I-M-A-R-C.com for the show notes and extra insights coming straight from our analysts to you. That’s all from me this week, so until next time, I’ll catch you later.
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