EVs, Supply, Still Dominating the Discussion for OEMs

Cindy Towe said buying and selling an electric vehicle (EV) is nothing like buying and selling an internal combustion vehicle. It involves a completely different method of managing fleets, managing your fueling process and managing your facilities, said Towe, who is fleet manager, government sales, for GM. The automaker is hearing questions from fleets about electrification and is conducting training on it.

Traditionally, she said, fleet managers have asked questions such as which vehicles and powertrains are available. 

“But now we’re getting into these bigger discussions: ‘OK, I need an EV, what do I need to do, how do I need to prepare my facility, how do I need to train my fleets.’ I think that’s the biggest change that’s going on in the industry,” she said.

EVs stood out as a common answer when representatives for various OEMs were asked about top issues they are facing as government mandates are forcing fleets toward making the transition. OEMs mentioned EVs even more than the supply chain issues that have affected vehicle manufacturers and the entire auto industry.

“Probably the interest that everybody wants to talk about today is EV,” said Brian Tabel, executive director of marketing for Isuzu Commercial Truck of America. “The big thing with fleets and government is really electrification,” Towe of GM said.

That isn’t the only issue, of course, as other OEMs note strong demand for product as a continuing trend. Stellantis breaks its fleet business down into the categories of commercial, government and rental.

“Regardless of channel, we’ve got tremendous demand across all three,” said Jeff Hines, director, fleet sales and operations, for Stellantis. But Hines also noted the importance of EVs when talking about Stellantis vehicles that are the object of that demand.

“We’ve got 3,500 units or so being built for the federal government for PHEVs on the Pacificas,” he said. Electrification is also important in Nissan’s plans, with the company writing in a response to questions from Government Fleet that it aims to introduce 27 electrified models for Nissan and Infiniti globally, including 19 all-electric vehicles, by 2030. The company expects 40 percent of its U.S. sales to be fully electric.

OEMs’ Aggressive Goals Toward Electrification

To help answer businesses’ questions such as the ones Towe mentioned earlier, GM last year launched GM Energy, which the company said creates “a holistic ecosystem of energy management products and services.”

Towe said that through GM Energy, a GM representative will conduct an analysis of fleets’ facilities and help companies solve issues such as charging.

“They’re used to just saying, ‘What products do you have available, and when can I buy them,’ which is all very important, too,” she said. “But they need to be ready to accept these units, and so it’s that marrying of getting your facilities ready, understanding what you need [and] preparing your team for EVs as well as ordering the product and making sure that those things align.”

Nathan Oscarson agrees with OEM representatives who mention EVs as a top area of focus. “We continue to see government transportation and fleet operations move toward an all-electric future,” said Oscarson, who is national government sales manager for Ford Motor Co. Oscarson stated in a written response to questions from Government Fleet that many cities and states are making aggressive goals toward going electric, and he mentioned government mandates that could ban gas vehicle sales as early as 2030.

“This trend is happening across the industry, and swiftly across light-duty fleet operations across federal, state governments and local municipalities,” he stated. “The challenge for cities, electric solutions manufacturers and utilities will be providing the infrastructure and charging needed for multifamily homes, apartments and underfunded communities. The entire industry is working to solve this challenge.”

Oscarson also said telematics and charging software are becoming more crucial to support fleet electrification. Organizations have expressed a need for more integrated software platforms to enable holistic fleet management, including vehicle maintenance, asset monitoring and proactive scheduling for higher efficiency, Oscarson said. They are also asking for the platforms to enable the ability to coach driver behavior, improve safety and reduce liability, and the ability to manage EV charging across the fleet.

The integrated platforms’ user interface and reporting functionality must also be easy to use, Oscarson stated. Another trend he has seen is use of those tools to help determine energy use and type, to help support reporting for incentives or to demonstrate progress toward achievements in sustainability.

“These features are available in Ford Pro software tools today, and we are seeing many customers benefit from these resources, including in the planning phases of adoption with our BEV fit tools,” Oscarson stated. He stated that the E-Transit is popular with municipalities and universities. “The range is perfectly tailored for campuses and cities where the van will operate in planned city routes and can be easily recharged overnight,” Oscarson stated.

As mentioned earlier, electrification is also a top trend for Isuzu on the commercial truck side. The company at the March NTEA event introduced its first all-electric truck, the N-Series EV. Tabel of Isuzu said the company at the March NTEA event released its first major redesign of the cab for the EV.

“The first vehicle that will have this whole new configuration is the EV with four different battery configurations so the customer can choose, if they’re running a short run then they can choose a small battery package,” Tabel said. “If they need a longer run, then they can choose a longer or a larger battery package that would help them. So they can customize that vehicle to the route that it needs to run each day.”

Supply and Demand

EVs aren’t the only issue on OEMs’ list of concerns, as supply concerns continue to take a toll on operations. Stellantis breaks up its fleet work into three channels. The first is the government channel, which includes federal, state and government, and police. The other two are the commercial and rental sides.

“We've got tremendous demand across all three,” said Hines of Stellantis. “We’ve seen tremendous growth over the last few years, especially this year, in all three.”

The government channel was a big part of that growth. Hines said Stellantis’ government business was up 111% from first quarter 2022 to first quarter 2023. Hines attributes that growth to strong demand across all of the Stellantis product line, including minivans, light and heavy trucks, and police vehicles such as the Ram 1500 SSV and the Durango police vehicle.

That strong demand has taken place as the chip shortage that has plagued the industry over the past year continues. But Hines said the chip shortage is “significantly better than it was a year to a year and a half ago.”

“But even absent the chip shortage last year versus a better position this year, we’re seeing demand across the board increase in our vans, in our trucks, and our minivans across the board,” Hines said, adding that the Ram ProMaster van performed particularly well.

Tabel of Isuzu said the supply situation is improving and that through the supply shortage Isuzu adopted a “build-shy” strategy.

“We were building trucks, missing parts and then going back and retrofitting them all,” he said. Tabel saw high product demand when he attended this year’s Truck Renting and Leasing Association conference.

People were asking for as many trucks as they can get at this point,” Tabel said. “Based on our production numbers for the second half of the year, we will have a good amount of vehicles. It might be a record year for production in all our models if things still continue to stay strong.”

Nissan said in a statement that it was returning to a “healthy level of inventory” at dealerships and said it will continue to get better. “We continue to prioritize sales through the retail channel, while managing fleet to be a positive contributor to our results and gain visibility with potential new customers for the brand,” the company stated. 

ICE on the Road

In addition to EVs, the OEMs are moving straight ahead into the ’24 model year with internal combustion engine vehicles they say will benefit fleets. Early next year, Isuzu’s N-series diesel truck will start production in early 2024 with the new cab design mentioned earlier. The company’s F-series classes 6 and 7 truck and its classes 3 through 5 trucks will receive that new cab design in early 2025.

GM’s Silverado and Sierra heavy-duty trucks that are currently available are showing improvement in fuel economy, and some new engines that are coming out will provide more horsepower and torque, Towe said.

In other ICE news, the U.S. Postal Service said it would buy 9,250 internal combustion vans from Fiat Chrysler, a unit of Stellantis NV.

Planning and Receiving Orders: Provide Lots of Info

How can fleets plan their orders? How do they know if they will receive vehicles and when?

Nissan advised fleets that knowing what models and trim they are requesting, along with the volume for each model, is very helpful.

“The more information you can provide, the more efficient the process will be,” the company stated. “Working with the team early in the model year to discuss process, pricing, incentives, and product availability helps the process.”

Unlike past years when the fleet order bank was open year-round, many OEMs, including Ford, have limited order bank windows, stated Oscarson of Ford.

“It can be challenging to stay productive if you award a contract only to find out order banks are closed and there is a long wait to enter the order and then an additional wait to have that order scheduled,” he stated.

Having flexible vehicle requirements is important, he stated.

“If your dealership is telling you that a particular option cannot be built due to supply shortages, consider removing it from your vehicle order if it is something you can live without,” he stated.

To learn if they will receive vehicles and when, Oscarson noted that customers use their fleet identification number to log on to fleet.ford.com and check order status.

“I recommend anybody to go see their local dealer and try to fill the one- , two- , three-unit holes that they might have,” said Hines of Stellantis. “As we move forward, they will have their opportunity to fill our pipeline, their pipeline, call it June 1st for the ’24 model year, and we’ve got allocation set aside for the government fleet machine as well, whether it’s truck, van or anything in between.”

The industry remains strong, Hines said. He also provided additional recent upbeat news for the future, noting that the company recently unveiled the all-electric, 2025 Ram 1500 REV range-extended vehicle. Hines advises fleets to maintain a balanced portfolio and to give manufacturers time to fulfill their needs.

“It’s hard to snap our fingers and build something in 30 or 60 days, so as soon as we open for ordering, I’d love to see and the company would love to see all of the orders that the government fleet machine may be looking for, and we’ll do our best to fulfill those orders in the fastest way we can,” Hines said.

Originally posted on Government Fleet