Fleet Europe °95

FOR INTERNATIONAL FLEET & MOBILITY LEADERS

#95

02/2018

TIME TO ELECTRIFY YOUR FLEET SPECIAL 22 PAGES

Nexus Communication - Fleet Europe #95 - Periodic magazine - February 2018 - Deposit Office Liège X

• New EVs in 2018 • The answer to the charging and battery question • TCO parity EV and ICE is near • Vattenfall: all electric in 2023

TELEMATICS ANALYSIS From tracking to enterprise management

LEARN FROM THE FLEET STRATEGY OF THE FLEET MANAGERS OF THE YEAR

The advantage of coopetition in Mobility Management p. 37

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• 8" Navigation with Full Link • Wireless charger • Rearview camera • 400l boot capacity • 1.0 TSI 85 KW DQ & MO • 1.0 TSI 70 KW MQ

Official fuel consumption for the SEAT Arona FR 1.0 TSI 115 PS in mpg (litres per 100 km): urban 47.9 (5.9); extra-urban 65.7 (4.3); combined 57.6 (4.9).

C02 emissions 113 g/km. Standard EU Test figures for comparative purposes and may not reflect real driving results.

CONTENT

4-33

2018, THE YEAR ELECTRIC MAKES SENSE

DOSSIER The Year of Electric Fleet

Yes, the electrification of Europe’s fleets continues. But as latest figures show, only 1% of corporate fleet vehicles in Europe are fully electric. If we add hybrids, that figure rises to 5%.

Let’s be frank: that’s not enough. The obstacles all sound familiar: range anxiety, uncertainty over cost-effectiveness and residual values, and insufficient charging infrastructure.

But, as you can read in our Dossier, those obstacles are either not real, or they will disappear soon, as newer EVs on the market have greater ranges, as battery tech improves, as the TCO equation for EVs converges (and eventually surpasses) the one for ICE vehicles, as EV charging networks (and charging opportunities at home and at work) expand across Europe, and as social and governmental pressures on ICEs increases.

The electrification of European fleets will continue at brisk pace in 2018, for three reasons: it saves money, it saves the planet, and it enhances corporate profiles. In brief, 2018 will be the year in which the challenge of How to adapt, how to survive and stay successful with an electric company car fleet could finally be resolved. And it’s our goal to support you with doing that.

Stay tuned!

Steven SCHOEFS Chief Editor, Fleet Europe

Over 120,000 public charging points in Europe, new mainstream electric models arriving, residual values on the rise: 2018 could become a pivotal year for the electric vehicle, also in fleet.

The growing EV market.............................. 4 2018: the year of e-volution......................6 How to make the most of an EV..........8 Don’t get your wires crossed.............. 12 Greenification: Time to re-source....... 14 Mind the raw side........................................... 16 Leasing companies accelerate switch to EVs...................................................... 18

40 REMARKETING

EV TCO starting to rival ICE TCO.. 22 EV charging forces fuel cost rethink.................................................................. 26 View on the EV infrastructure in Europe............................................................. 28 Case Study Vattenfall: all electric by 2023..................................................................... 32

60&62 MANAGEMENT

Why CARaPASS will Meet with the Global accelerate cross-border and European Fleet remarketing Manager of the Year

66 BUSINESS Norbert van den Eijnden on Alphabet’s customer focus

INNOVATION

Telematics and Data: driving towards a secure and open future………………………………34

MOBILITY

The three key principles guiding 'coopetition' in Mobility………………………………………… 37

EXPERT

Why the current OEM business model is obsolete………………………………………………………………… 42

ANALYSIS

Telematics evolution: from vehicle tracking to enterprise management… 46 10 key fleet benefits of Telematics………………………………………………………………………………………………………………48 Telematics: from evidence to insight………………………………………………………………………………………………………50 10 steps to a successful Telematics strategy……………………………………………………………………………………54 The future of fleet Telematics…………………………………………………………………………………………………………………………… 56

MANAGEMENT - FLEET EUROPE AWARDS

28 to 30 MAY

Juergen Freitag, Siemens, Global Fleet Manager of the Year…………………………………… 60 Portrait of Peter Szelenyi, European Fleet Manager of the Year…………………………… 62

2018 GLOBAL FLEET CONFERENCE

Rome

BUSINESS

SEAT: on trend with SUVs………………………………………………………………………………………………………………………………… 64

DOSSIER

FINALLY, THE TIPPING POINT IS NEAR DIETER QUARTIER

Over 120,000 public charging points in Europe, new mainstream electric models arriving, residual values on the rise: it seems that 2018 could become a pivotal year for BEVs. ACEA registration figures yield a remarkable conclusion: during the first three quarters of 2017, the European market for plug-in hybrids (PHEV) was exactly as large as the one for battery-electric vehicles (BEV), i.e. nearly 100,000 units. While the former are still gaining in popularity, their growth – 37.1 percent compared to the same period a year before – is outpaced by that of the latter: 47 percent.

Indeed, BEVs are suddenly picking up speed. An important stimulus in this e-momentum is public charging infrastructure, which grew by over 15 percent in 2017 according to the European Alternative Fuels Observatory (EAFO). Today, Europe has some 120,000 EVSEs (Electric Vehicle Supply Equipment).

Towards TCO parity At least as important in the sales surge of electric vehicles is the availability of affordable long-range models. Given the right usage and sufficient tax benefits, TCO parity with combustion engines is no longer utopian as residual values of newcomers grow stronger.

The last piece of the puzzle is employee buy-in. When fleet management fosters a holistic e-approach and driver convenience, supported by OEMs and lessors, 2018 could become the year for companies to unlock the marvels of emission-free motoring.

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FLEET EUROPE #95

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DOSSIER

2018: the year of e-volution Stijn Blanckaert @StinoBlanco

Almost every carmaker has announced the arrival of electric vehicles in their line-up over the next two years. Seven of them will be joining the ranks of pioneers like the Renault Zoé and BMW i3 still this year. Let's take a look at the innovation they bring to the table.

Nissan Leaf

NISSAN LEAF 2.0 The second generation of the world’s best-selling electric vehicle features a new 40 kWh-battery yielding an improved (NEDC) range of 378 km.

Nissan promises semi-autonomy with its ProPilot technology allowing the car to slow down, stop and restart in dense traffic and change lanes without driver interference.

The Leaf also features Nissan’s e-Pedal technology that allows you to start, accelerate, decelerate and stop by simply increasing or decreasing the pressure applied to the accelerator and without using the brake pedal. Free charging is available at most Nissan dealerships.

Jaguar i-Pace

JAGUAR I-PACE A new star is about to be born within the SUV segment. Jaguar’s i-Pace will feature a 90 kWh-battery pack and a total power output of no less than 400 PS and 700 Nm, with an announced NEDC range of 500 km and, of course, four-wheel drive. Charging from zero up to 80 percent at a 50 kW DC-charger will only take 90 minutes. The interior features two touchscreens and the boot provides 530 litres of storage with an additional 28 litres in the front. Deliveries will start in the second half of the year.

Audi e-Tron Quattro

AUDI E-TRON QUATTRO Audi is about to launch its first electric SUV, the e-Tron Quattro.

With exterior dimensions situated in between the Q5 and the Q7, the interior space will be more than sufficient, and the boot will offer no less than 615 litres of storage.

The 95 kWh-batteries should allow a range of over 500 km. The power output is 435 PS, with a temporary boost-function allowing a peak up to 503 PS. Three electric motors (two in the back, one in the front) will deliver their power to the four wheels.

SPECS

SPECS

SPECS

Battery type and Capacity Li-ion, 40 kWh

Battery type and Capacity Li-ion, 90 kWh

Battery type and Capacity Li-ion, 95 kWh

Maximum Output

150 PS

Maximum Output

400 PS

Maximum Output

435 (503) PS

Maximum Torque

320 Nm

Maximum Torque

700 Nm

Maximum Torque

800 Nm

Range (NEDC)

378 km

Range (NEDC)

500 km

Range (NEDC)

>500 km

Fast-charging standard

ChaDeMo

Fast-charging standard

CCS

Fast-charging standard

CCS

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DOSSIER

Hyundai Kona

HYUNDAI KONA EV After the Ioniq, the recently introduced Kona will become Hyundai’s second EV. Remarkably, this compact SUV features very similar tech specs to the Opel Ampera-e and Chevrolet Bolt, with a 204 PSengine and a battery capacity of 40 kWh. A second version with no less than 64 kWh will also be available, allowing the Kona to have a category-leading range of 500 kilometres.

Since the Opel Ampera-E still has availability issues in Europe, the Kona EV looks like a promising alternative.

Mercedes-Benz GLC F-CELL

Peugeot Partner Tepee

PEUGEOT PARTNER TEPEE & CITROËN BERLINGO MULTISPACE PSA is finally moving into the next era with a more advanced fully electric version of their soon to be launched new Peugeot Partner Tepee and Citroën Berlingo Multispace models in 2018. There are no details about the technology and battery power available yet, but thanks to a larger battery pack than PSA’s current EVs, the range should increase considerably. The two models will each also have a more distinct look, contrary to the current versions that are identical twins.

MERCEDES-BENZ GLC F-CELL A bit the odd man out, this Mercedes-Benz, since the GLC F-CELL combines fuel cell with plug-in battery technology. It looks like a regular GLC, but underneath we find a hydrogen power plant that gives this SUV an NEDC range of 437 kilometres. The tank holds 4,4 kg of hydrogen and can be filled in only three minutes. The additional 13,8 kWh-battery allows 49 kilometres of extra freedom when charged, which should be enough to reach the next filling station when you are out of H2.

SPECS

SPECS

SPECS

Battery type and Capacity Li-ion,

40 or 64 kWh

Battery type and Capacity Li-ion, unspecified

Battery type and Capacity Li-ion, 13,8 kWh

+ Fuel Cell

Maximum Output

204 PS

Maximum Output

unspecified

Maximum Output

200 PS

Maximum Torque

unspecified

Maximum Torque

unspecified

Maximum Torque

350 Nm

Range (NEDC)

up to 500 km

Range (NEDC)

> 200 km

Range (NEDC)

437 + 49 km

Fast-charging standard

CCS

Fast-charging standard

unknown

Fast-charging standard

CCS

Tesla Model 3

TESLA MODEL 3 The long awaited Model 3, Tesla’s first “affordable” EV, will see its deliveries reach cruising speed in the second half of 2018. By the time the Californian saloon reaches the Old Continent, the American price tag of $35.000 will undoubtedly have risen to €40,000 including tax. The Model 3 will still seat five adults and measures 4,7 metres, some thirty centimetres less than the Model S. The promised range varies from 350 to 500 kilometres. Model 3 owners will have to pay for charging at Tesla’s Superchargers.

SPECS

FLEET EUROPE #95

Battery type and Capacity

Li-ion, 80 kWh (long-range version)

Maximum Output

258 PS

Maximum Torque

unspecified

Range (NEDC)

350 or 500 km

Fast-charging standard

Tesla Supercharger + adapters for CSS and ChaDeMo

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DOSSIER

How to make the most of your EV Dieter Quartier @DieterQuartier

Mastering the art of electric driving is a matter of understanding the basic principles.

From one-pedal driving to smart charging, discipline is required to optimise range – and avoid battery degradation.

Electric powertrains are quite simple by architecture. Like many appliances, they mostly use a permanent magnet synchronous motor (PMSM). This is an AC motor (alternating current) that creates a magnetic field under the influence of electric power (coming from the battery) flowing through its coils. In a nutshell: this magnetic field delivers the power to rotate the wheels of the car.

Interestingly, an electric motor delivers all of its (plentiful) torque as of the first rotation. Consequence: there is no need for a gearbox, which easily weighs 50 kg and would add friction and hence compromise efficiency. No clutch, no oil, no filters to replace: an EV’s drivetrain is a dealer’s nightmare in terms of aftersales revenue, but a dream for the driver and fleet owner because of avoided downtime and costs.

BATTERY: THE TRICKY PART Indeed, electric motors are not exactly rocket science. For an OEM, the most challenging part of an electric car is its battery.

It’s all about finding the right balance between capacity, weight and cost. Add more battery cells, and you will get more range. But it is like a snake biting its own tail: the more cells, the higher the weight, which indeed compromises range.

And there is another conundrum: the larger the battery, the longer it takes to charge, which of course compromises user convenience – something you want to maximise in the first place. That is why Hyundai focused on developing a highly-efficient electric motor instead of fitting a heavy and expensive battery in the Ioniq. Each extra kWh

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comes at a hefty price tag, too – the cost grows exponentially, not linearly.

PLUG & BRAKE 2 CHARGE A battery can be charged either by plugging it in, or by recovering energy whilst decelerating. The latter is called regenerative braking. As soon as you release the accelerator pedal, the electric motor switches to reverse mode, acting as a generator that converts rotational (kinetic) energy into electricity to feed the battery. This indeed adds to an already impressive efficiency rate of 80 percent and more. A combustion engine reaches 40 percent at best.

Exactly this regeneration is why EVs are in their element in an urban environment, with mostly stop-and-go traffic. In fact, in most cases you don’t even touch the brake pedal – a phenomenon called one-pedal driving.

In many cases you can adjust the braking force to traffic conditions and to your liking.

In a BMW i3, for instance, switching from Comfort to Eco Pro increases the amount of energy that is recovered at the wheels. In a Tesla, the giant touch screen allows you to select exactly how much lifting off the accelerator slows the car down.

The brand new Nissan Leaf goes one step further, with the so-called e-Pedal. This makes the brake pedal virtually obsolete: you only need it for emergency stops. Again, this has a positive impact on MSR costs. The less you use the brake pedal, the longer the brake pads and brake discs will last.

Because regenerative braking is done more progressively than ‘mechanical’ braking, tyres and shock absorbers are likely to wear down less quickly, too.

FLEET EUROPE #95

DOSSIER

Frequent DC fast-charging is thought to have a negative long-term impact on the battery.

SPEED AND COLD KILL So, regenerating is essential to maximise an EV’s range. It is only logical then that motorway driving is the ideal way to drain your battery in the fastest possible way. Not only does speed equal power consumption, constant speed means no regeneration.

Bringing and keeping the cabin up to temperature when it is cold outside can also reduce the power reserve in a frightening fashion. In a conventional car, heat is taken from the combustion engine and is basically ‘free’, but in an electric car, you need an additional (power consuming) system, such as a resister heater or heat pump, to create a comfortable climate when it is cold outside. That is why pre-climatising the car before you leave, i.e. when it is plugged in, is absolutely necessary to squeeze as much miles out of the battery as possible.

Cooling the interior with the air conditioning requires even more energy, incidentally. Toyota has developed an interesting solution: a glass roof with photovoltaic cells, available on the Prius plug-in hybrid. The watt hours generated are used to feed the onboard electronics. When the car is stationary, the power is sent to the battery.

FLEET EUROPE #95

LOSS OF BATTERY PERFORMANCE There is another problem with low temperatures. It increases the internal resistance of the battery and lowers the discharge capacity, ultimately resulting in less range. In the long run, it can also shorten the lifecycle. Recently, Tesla added a pre-heating system for the battery, advising customers to start pre-conditioning about an hour before you intend to leave. Extreme heat, too, has a negative effect on battery performance. EVs are therefore best stored in a garage and not outside.

Finally, there are a few more things you can do to make the most of your electric car. To avoid premature degradation, it is advised not to use fast chargers frequently, even though research by the Idaho National Laboratory suggests that the impact is minimal. The distance driven seems to be of more importance in terms of battery degradation, and so is completely draining the lithium ion cells, or charging them fully and then not use the car for more than 24 hours. It is best to go by the 20-80 rule: keep the charge status between 20 and 80 percent as much as possible.

INTEGRAL PART OF A SMART GRID Batteries of electric cars and plug-in hybrids can be put to good use as energy buffers for the power grid (V2G, or vehicle-to-grid), levelling out peaks and troughs in both demand and supply. Indeed, they are to become a building block of the so-called smart grid. However, many believe that frequent charging and discharging is harmful for the battery, reducing its service life and increasing degradation.

Recent research performed by WMG, International Digital Laboratory, The University of Warwick and Jaguar Land Rover has concluded that the opposite is true. “We show that an EV connected to this smart-grid system can accommodate the demand of the power network with an increased share of clean renewable energy, but more profoundly that the smart grid is able to extend the life of the EV battery beyond the case in which there is no V2G,” the abstract reads.

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DOSSIER

WHICH ONE FOR YOUR FLEET? Considering opening up your car policy to EVs? Chances are the BMW i3 and VW e-Golf will be on the shortlist. We have tried and tested them for you. Below you can find the verdict. The full reports are available on fleeteurope.com.

BMW I3 94AH

VW E-GOLF

POWER

125 kW

100 kW

TORQUE

250 Nm

290 Nm

WEIGHT

1320 kg

1615 kg

BATTERY CAPACITY

33 kWh

35.8 kWh

13.1 kWh/100 km

12.7 kWh/100 km

300 km

300 km

18.3 kWh/100 km

16.3 kWh/100 km

180 km

220 km

• Clever packaging • Holistic approach (materials, services) • Fun to accelerate, fun to regenerate • Personalisation options

• Looks, feels and drives like a regular car • Product quality, soundproofing • Fun to accelerate, fun to regenerate • Brilliant infotainment system

• "Prototype" interior look • Price tag, necessity to add expensive options • Limitations of the concept (tyres, lateral wind sensitivity) • Small boot

• Sombre interior • Price tag • Slow charging • Limited amount of options available

POWER CONSUMPTION (NEDC) RANGE (NEDC) POWER CONSUMPTION (TEST) RANGE (TEST)

PLUS

MINUS

BATTERY UPGRADES: POSSIBLE, BUT PROHIBITIVE The electric cars of the first hour – Renault Zoé, VW e-Golf, Nissan Leaf, BMW i3 – have in the meantime been upgraded. In the case of the Zoé, the battery pack went from a meagre 22 kWh to a more convincing 41 kWh, nearly doubling the range (to more than 400 km NEDC). But can existing Zoés have their battery pack swapped for the more powerful one? The answer is yes.

For consumers currently leasing the battery, the upgrade costs €3,500. If you have a Zoé with batteries included in the sales price, the swap will set you back €9,900.

That’s rather prohibitive, to say the least, and probably why neither BMW nor VW or Nissan offer such an upgrade option. Until recently, it was possible to change your i3’s battery pack for the more powerful variant introduced in 2016, but for undisclosed reasons, the Bavarians have struck this possibility.

Remarkably, Tesla owners can’t have their batteries upgraded either, even though it is technically possible to swap the pack in a couple of minutes – and fully automatically, too.

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FLEET EUROPE #95

SEE THE UNEXPECTED THE NEW VOLVO XC60 WITH NEW-GENERATION CITY SAFETY

PEACE OF MIND FOR BUSINESS Identifying risk is invaluable in business, as is an accurate response. The Volvo XC60 reacts faster than humanly possible to protect your workforce. In a fraction of a second, it detects hazards, then brakes. While at higher speeds, Steering Support helps manoeuvre drivers to safety.

Available in T8 Twin Engine AWD – a turbo petrol engine combined with a responsive electric motor – its four drive modes give the option of zero-emission driving, hybrid, all-wheel drive, or the full power of both petrol and electric.

302 + 87 HP

49 G/KM CO2

2.1 L/KM COMBINED

EMAIL GLOBALFLEET@VOLVOCARS.COM OR CALL 00 46 313258377

Official fuel consumption for the new Volvo XC60 in l/100 km: Urban 9.3 – 5.8, Extra Urban 6.2 – 4.7, Combined 7.3 – 2.1. CO2 emissions 167 – 49g/km. L/km figures are obtained from laboratory testing intended for comparisons between vehicles and may not reflect real driving results.

DOSSIER

Charging: don't get your wires crossed Stijn Blanckaert & Dieter Quartier @StinoBlanco & @DieterQuartier

While full electric and plug-in electric vehicles gain ground, owners are confronted with an array of charging standards and technologies. Will they all coexist, or will one of them prevail?

Today, four modes of charging technology are available to the public (see below). Each of them can use different combinations of power levels in kW, types of current (AC, DC) and plug types. In general, EV batteries can be topped up using normal household sockets, but this is slow because they provide only a low amount of electric current, making this solution only suitable for overnight replenishing. Faster plug-in charging requires specialized infrastructure.

AC/DC Since electrical power grids provide AC current and batteries can only store DC current, the electricity provided to the vehicle needs to be converted first. In the case of so-called AC charging – the normal way of topping up your batteries, at low to medium speeds – an on-board AC/DC converter inside the vehicle makes direct current out of alternating current.

Japanese OEMs stick to the ChaDeMo standard, which only offers DC charging.

Remember the days of the good old video cassette. VHS, Betamax and Video 2000 were competing to become the standard.

The first one eventually won, basically thanks to a certain niche within the film industry – indeed, one of ill repute.

Similarly, in EV-land, there are several ways of charging today. While wireless charging is still to be vulgarised (see boxout) and battery swap has not been commercialised as a solution yet, we must resign to plugging in.

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DC charging, however, happens through stations that have integrated converters to transform AC electricity from the grid into DC electricity to feed the batteries of an EV, allowing for far greater charging speeds.

The voltage and the maximum current of the power supply determine how quickly a battery can be topped up.

FOUR MODES There are basically four charging modes.

Mode 1 - charging means using domestic sockets and cables – a practice most OEMs do not recommend as there is no power management system, compromising safety.

Mode 2 stands for slow or semi-fast-charging, on non-dedicated sockets but with a special charging cable provided by the car manufacturer.

FLEET EUROPE #95

DOSSIER

WIRELESS CHARGING Wireless or inductive charging does not require a physical connection between the charger and the vehicle.

Instead, the system creates an electromagnetic field around a charging pad, which is activated when a plugin hybrid or fully electric vehicle with a corresponding pad is positioned above it. The wireless method is yet to be commercialized on a larger scale, but BMW already offers it as a factory option on the 530e iPerformance and Mercedes announced wireless char-ging compatibility for their S-Class. Audi is also working on a wireless solution and providers such as Plugless Power propose it as a retrofit accessory for Tesla, Mercedes, Nissan and other brands.

Mode 3 – the most common one – refers to a solution for semi-fast or fast charging that uses a special plug socket and a dedicated circuit to allow higher power levels when charging. This can be done through a wall box or a stand-alone pole.

These three modes all provide AC current that is to be converted to DC by the vehicle itself – which indeed means charging is limited to the vehicle’s converter capacity.

Mode 4 charging is fast-charging with a dedicated charging station having an integrated AC/DC-converter directly delivering DC current to the vehicle.

Unfortunately, electric car manufacturers did not agree on one standard for DC fast-charging, which complicates things for EV customers. Each standard comes with their own connector.

JAPAN, GERMANY AND TESLA Today, there are three major DC fast-charging systems on the market in Europe. The first one is commonly used

by Japanese constructors and carries the name ChaDeMo. You will find it in Nissans, Mitsubishis, Toyotas and Subarus. It does not support AC charging meaning that ChaDeMo-equipped cars need an extra charging port for this.

Today, the system can deliver 62.5 kW of direct current at 500 V and 125 A.

FLEET EUROPE #95

BMW and other German constructors created the Combined Charging System, which supports both AC and DC charging.

The second charging standard is the SAE Combo Charging System (CCS) as used by BMW, Daimler, GM, Volvo, Hyundai-Kia and the Volkswagen group. This system has a single charging inlet that supports both AC and DC charging, contrary to ChaDeMo. It basically combines a Mennekes (type 2) connector for AC charging with a two-pin connection below for DC charging. The latest version (CCS 2.0) can charge 350 kW at maximum 1,000 V and 350 A. Tesla Motors developed a proprietary fast-charging system, called Tesla Supercharger, with adapters for every kind of power outlet. So Teslas can charge anywhere, but ChaDeMo and CCS drivers are not welcome at Tesla’s charging stations – for now. Superchargers can deliver 120 kW at 480 V and 300 A.

standard in the (near) future remains to be seen. The consortium behind CCS, backed by German manufacturers, are actively lobbying to make CCS the global standard, but they haven’t won the battle against ChaDeMo yet.

WHICH FAST-CHARGING STANDARD FOR WHICH EV? ChaDeMo • Nissan Leaf • Peugeot iOn • Citroen C-Zero • Mitsubishi iMiEV • Kia Soul EV • Tesla (with adapter)

THE BATTLE IS YET TO BEGIN In conclusion, the system used for charging is one thing, the charging port and plug type yet another. Today, an electric car driver can’t just go to the closest fastcharge station, but has to find the one that’s compatible with his car.

CCS (DC Combo) • Volkswagen e-Golf • BMW i3 • Opel Ampera-e • Hyundai Ioniq

The industry’s failure to agree on a single universal charging standard for plug-in electric vehicles has been a major impediment to public charging infrastructure. Whether we will have a uniform

AC fast charger • Renault Z.E. line-up • Smart electric drive • Tesla (with adapter)

Tesla Supercharger • Tesla

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DOSSIER

High time to re-source Dieter Quartier @DieterQuartier

Ten years ago, EVs gave you 120 km of range. Today, the latest technology allows for 500 km of zero-tailpipeemission motoring freedom. Which evolution can we expect in the coming years and who will be dividing the cake?

SOLID STATE: THE NEXT STEP Lithium-ion batteries are basically laminated structures with a so-called electrolyte at their centre. This is a liquid or gel-like substance through which the lithium ions travel back and forth between electrodes when the battery is charged or discharged. The next generation of Li-ion battery packs will make use of a solid electrolyte. They will weigh less, carry more energy, last longer and charge faster. Toyota, Panasonic, Honda, BMW and Dyson are amongst those spending lots or R&D money in this next step. The challenge remains finding a material that is conductive enough.

At today’s prices, the new Nissan Leaf’s 40-kWh battery pack should cost less than €8,000.

The clear majority of today’s hybrid and electric cars use lithium-ion battery cells.

This technology won the race against other solutions, such as Ni-Cad (nickel-cadmium) and NiMH (nickel-metal hydride) because of its higher energy density, its lower self-discharge rate and the fact that it has no memory effect issues. Also, Li-ion allows for various applications depending on needs and requirements.

There are as many drawbacks as there are advantages, though. Li-ion cells need protection from overcharging and complete discharging, for instance. They suffer from ageing, too, which is accelerated by frequent charging and high mileage. Moreover, they are temperature-sensitive. The greatest disadvantage, however, is their cost. Exactly this is the greatest hurdle standing in the way of widespread adoption of electric cars.

77 PERCENT PRICE DROP A study published by McKinsey & Company* a year ago states that battery economics are an important barrier to profitability. As with every technology, prices eventually come down once the production scale goes up.

The cost of lithium-ion battery packs has already fallen from €850 ($1,000) per kWh in 2010 to €190 ($227) per kWh in 2016, the consultancy has calculated.

What does that mean in practice? If we take a new Nissan Leaf, which holds a 40-kWh battery, the lithium-ion pack would cost less than €8,000. A Tesla Model X with 100 kWh tucked away in its belly has €19,000 worth of power storage technology. Still, according to this study, battery costs continue to make EVs more costly than comparable ICE-powered variants, despite the considerable price drop.

Current projections put EV battery pack prices below €160 ($190) per kWh by the end of this decade and suggest the potential for pack prices to fall below €85 ($100) per kWh by 2030. That means that it will take two more model cycles before EVs become profitable for car manufacturers.

Consequently, OEMs are unlikely to push e-mobility more than is necessary to meet emission targets or quota – like in China.

Tesla remains the exception, evidently. It

*How automakers can drive electrified vehicle sales and profitability, McKinsey & Company, January 2017

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FLEET EUROPE #95

DOSSIER

claims to be below $190/kWh since 2016, resulting in a 30 percent gross margin on the Model S. ASIA RULES THE CELLS That only leads to one conclusion: if other car manufacturers want to be competitive in the e-scene, they must either invest in their own Gigafactory or work together and close partnerships with suppliers to achieve economies of scale and spread development costs. According to Forbes, the battery market will be worth $240 billion in 20 years’ time, assuming that by 2037, 40 million EVs will be built annually, with an average battery capacity of 60 kWh, the cost of which is $6,000.

Today, the majority of battery cells are produced by Samsung, LG Chem, Panasonic, Samsung SDI, Tesla and – last but definitely not least – BYD. China in particular is expected to become a major player on the battery market. Today, the People’s Republic is already home to over 140 EV battery manufacturers. From 125 GWh today, the global battery cell manufacturing capacity is projected to double to over 250 GWh by 2020. Even that will not be nearly enough, Forbes reckons: “Total cell production capacity will need to increase tenfold from 2020 to 2037, the equivalent of adding 60 new Gigafactories, during that period.”

THE EUROPEAN DIVIDE Where are the Europeans in this story?

Today, the Old Continent lacks big-scale battery cell production facilities, meaning that OEMs are mainly sourcing Li-ion packs from the Chinese, the Japanese and the South Koreans. Exception to the rule is Daimler, which invested in two battery manufacturing sites in Germany with its subsidiary Deutsche Accumotive.

NORTHVOLT, EUROPE’S GIGAFACTORY Founded by a former Tesla executive, the Stockholm-based company Northvolt is planning on building the largest battery production facility in Europe.

Firm believers and investors in the project are power supplier Vattenfall and Swiss engineering company ABB. When it is fully operational (by 2023), the factory should have an output of 32 gigawatt-hour. The first battery cells are expected to leave the factory by late 2020.

Renault-Nissan has no intention of manufacturing its own battery packs.

“As carmakers, we need to develop the technology nobody has, but when the technology is available outside, we should externalise,” said Carlos Ghosn in December 2016. “One of the reasons for why we have suppliers is that one cannot invest in everything.”

EV BATTERY PRICE VERSUS GLOBAL EV SALES Average battery pack price $ per kWh

FLEET EUROPE #95

-77%

1,000

US, EU, and China electric vehicle sales1 Units, thousands

900 800

501

˜

530

800

700

US 642

600

Rival BMW announced last November it would be spending €200 million on a new battery cell competence centre.

“By producing battery-cell prototypes, we can analyse and fully understand the cell’s value-creation processes. With this build-to-print expertise, we can enable potential suppliers to produce cells to our specifications,” BMW board member Oliver Zipse said in a statement. “The knowledge we gain is very important to us, regardless of whether we produce the battery cells ourselves, or not.”

Lobbying for a combined vertical integration instead of sourcing battery cells elsewhere is Volkswagen brand chief executive Herbert Diess, who calls for a Europe-wide bundling of forces. As the OEM aims to have 80 electric models by 2025, it needs four times the capacity of Tesla’s Gigafactory to supply their batteries.

599

+160% p.a.

540

500

EU2 251

400 300 200

227

2020 forecast

100

2030 forecast

0 2010

169

269

2011

2012

2013

2014

4 2015

2016E

China

88

2010

32 2011

2012

2013

2014

2015

2016E3

1. Plug-in hybrid electric vehicles and battery electric vehicles; excludes low-speed vehicles and hybrid emectric vehicles without a plug 2. Includes Denmark, France, germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, and the UK 3. Extrapolated based on Q1-Q3 2016 IHS data and assuming continued growth in all three markets in Q4 Source: IHS, Bloomberg, New Energy Finance Source: McKinsey & Company, How automakers can drive electrified vehicle sales and profitability, January 2017, online

15

DOSSIER

Mind the raw side Fien Van den Steen

With ever more European cities intending to ban the internal combustion engine and carmakers electrifying their line-up, the battery electric vehicle (BEV) is expected to take a big leap forward. But will it be a sustainable leap?

Taking into account the entire lifecycle of EVs, their environmental impact became a topic of controversy. A Belgian research institution specialized in e-mobility, MOBI (connected to the Brussels VUB university), compared several life cycle assessments and concluded that EVs are a greener alternative than combustion-engined vehicles, regardless of the fuel they burn. However, some remarks should be added to the bright – green – side of this story.

POWERTRAIN IMPACT ON CLIMATE CHANGE WTT

TTW

Glider

Powertrain

1% 6%

200

150

100

75% 45% of diesel

3% 14% 15%

50

68% 0

BEV (EU 2015 MIX)

230% BEV

GCO2EQ/KM

Li battery

18%

DIESEL (REF 120 GCO2/KM)

However the carbon footprint of the Well-to-Tank (WTT) stage of a BEV is higher and the footprint of the lithium battery is added, these stages do not exceed the impact of the Tank-to-Wheel (TTW) stage of the diesel driven car.”

Source: MOBI, Life Cycle Analysis of the Climate Impact of Electric Vehicles.

Background information: The basic assumptions are: a life time driven distance of 200,000km and a weight of the glider of 1,200kg. For the battery electric vehicle following assumption are considered: a real-life electricity consumption of 0.2 kWh/km [19] and a 30kWh LMO battery (average of 55 kgCO2/kWh [12]); 1.5 battery replacement is needed over the lifetime of the vehicle [20, 17]. The reference diesel vehicle emits 120 gCO2/km on NEDC, which is augmented with 35% to reflect real life driving conditions [5]. The EU 28 mix of 2015 emits 300gCO2/kWh [21].

16

ELECTRICITY: GREEN OR GREY Several reserach institutions such as MOBI stated that no matter the source of energy a battery is charged from, EVs are greener than their ICE counterparts. This even holds true when the electricity is mostly produced by coal fired power plants, for example in Poland. In addition, due to the tighter EU regulations, the greenhouse gasses caused by electricity production are supposed to drop significantly in Europe.

Furthermore, whereas the emissions of ICEs are mostly produced via their exhaust tail pipes in the close vicinity of people, threatening the overall air quality, the emissions of the electricity for EVs is produced outside the residential areas, reducing their direct impact on human health. However, friction and breaking can still produce particulate matter (PM), depending on other aspects, such as the driving profile.

MINING UNDERMINES THE EV The lithium-ion battery, the dominant technology for EVs today, is the real controversial element of the story. It contains several critical and controversial raw materials, such as lithium, cobalt, nickel and graphite. Three quarters of the world’s lithium is gained in Argentina, Chile and Bolivia.

Supplies are plenty: new production is due to come on line in Argentina and Australia, and China has reserves as well. However, production will not keep pace with the rising demand for lithium, and already causes severe damage to human health and the environment.

Furthermore, 60 percent of cobalt is mined in the Democratic Republic of Congo (DRC), a politically instable country, characterised by corruption, poor labour and human rights practices like child labour.

The mining of graphite, mainly in China,

FLEET EUROPE #95

DOSSIER

Notwithstanding the environmental and social impact, the demand for these raw materials is suspected to rise. This will in turn increase prices, without necessarily tackling labour and environmental issues.

To minimize the hazardous effects, the world’s biggest automakers recently set out ethical standards. However, these might be undermined by a lack of global regulation and independent verification.

RECYCLING OR REDUCING Recycling or reusing can lower the impact of the raw materials and prevent rising prices or even supply deficits. However, despite the EU directive on end-of-life vehicles (EU, 2000), European recycling rates of lithium-ion batteries remain below 5 percent. Economies of scale are needed to make recycling more profitable than mining. Such economies of scale are expected to materialise by the year 2025, when the first generation of EV batteries will reach the end of their life cycle.

Few companies around the world set up pilot projects in this emerging market, pioneered by the Belgian Umicore.

Additionally, reuse of batteries as energy storage units could keep the battery in the running for another decade. BMW, for example, claims it designs its batteries specifically for this purpose. However, since various battery formulas are in use, standardized technologies and legislation are required to make recycling and reuse more attractive and feasible.

SIZE DOES MATTER A bigger battery and a longer range seem great features, but they increase the ecological impact of the EV. Firstly, by increasing the weight and hence the energy needed to propel the car. Secondly, by demanding more raw materials for the battery. Some studies, like the one performed by MIT’s Trancik Lab, show that an EV with a large battery can in fact produce more carbon emissions than an ICE-powered car if you take into account production and end-of-life emissions.

In conclusion, it is safe to state that an EV is greener than its ICE counterpart if its battery is reasonable in size and charged with green energy. The responsibility to switch to renewables lies with power suppliers and governments, but perhaps also with fleet owners, which can install rooftop solar photovoltaic panels, for instance.

KILLING TWO BIRDS WITH ONE STONE Improving the current battery technology might kill two birds with one stone, by reducing or even replacing the current raw materials, and, hence addressing both ethical and environmental issues. New battery technologies are in the pipeline, aiming at alternative raw materials that are less controversial or critical than the current ones. However, most of the research still concerns improvements of the current commercial lithium-ion technology.

Finally, an energy labelling system that takes into account the overall energy use, rather than CO2 alone, over the car’s entire lifespan might be a better way to compare different technologies and make an informed and justified decision.

INFLUENCING THE CARBON FOOTPRINT Influence of the energy source to the carbon footprint

Prognosis of the carbon footprint of EU 28 electricity mix

3.1 13 13

200

160

GCO2EQ/KM

and nickel, mainly in Indonesia and the Philippines, is known to be harmful for human health and for the environment, by causing toxic dust, air and water pollution. Poor labour and human rights practices are also common. Some mines have already been forced to close down.

120

3.1 13 13

180

3.1 13 13

80

90

40

3.1 13 13 20

0 900g CO2/kWh 450g CO2/kWh COAL NATURAL GAS

WTT

100g CO2/kWh SOLAR

3.1 13 13 2

11g CO2/kWh WIND

TTW

Glider

3.1 13 13

60

3.1 13 13

52

300g CO2/kWh 260g CO2/kWh EU 28 (2015) EU 28 (2020)

Li battery

3.1 13 13 16

40 200g CO2/kWh EU 28 (2030)

80g CO2/kWh EU 28 (2050)

Powertrain

“The energy source does influence the carbon footprint of a BEV, however, due to tighter EU-regulations, the produced greenhouse gasses are supposed to drop significantly.”

Source: MOBI, Life Cycle Analysis of the Climate Impact of Electric Vehicles.

TOP 5 BESTSELLING BEV* IN EUROPE IN 2017

TOP 5 BESTSELLING PHEV* IN EUROPE IN 2017 13,9% 13,9%

25,7% 25,7%

26,8% 26,8% 9% 9% 53,2% 53,2%

8,9%8,9%

8,5%8,5% 17,2%17,2%

7,8%7,8%

10,3% 10,3% 11,5%11,5%

7,3%7,3%

Renault Renault Zoe Zoe

Mitsubishi Mitsubishi Outlander Outlander PHEV PHEV

Nissan Nissan Leaf Leaf

Mercedes GLC350e Mercedes GLC350e

BMWBMW i3 i3

Volkswagen Passat Volkswagen Passat GTE GTE

Model TeslaTesla Model S S

BMWBMW 225xe Active Tourer 225xe Active Tourer

Model TeslaTesla Model X X

BMWBMW 330e330e

Others Others

Others Others

Source: EAFO, European Alternative Fuels Observatory

FLEET EUROPE #95

* B EV: Battery Electric Vehicle PHEV: Plug-in Hybrid Electric Vehicle

17

DOSSIER

Leasing companies facilitate switch to EVs Jonathan Manning

The interest for fleet electrification is growing and it's the leasing company's role to guide the fleet customer to facilitate the switch to an electric fleet.

The low fleet adoption rates of electric vehicles belie the efforts and investment that leasing companies are making to prepare for a zero-emission future.

The uptake of battery-powered cars may still be extremely limited in most countries, but there is an overwhelming sense among Europe’s major lessors that electric cars are set for a massive increase in popularity.

“Electric vehicles are what’s next,” said Mathijs van der Goot, senior consultant, LeasePlan International. “We’re therefore delighted to work with some of the world’s largest companies on speeding up and facilitating the switch to electric mobility.”

Hugo SALAUN Marketing and digital director, Arval “Two drivers with similar roles may have different profiles when it comes to the appropriateness of EVs, if one can charge at home and the other can’t”.

As a founding partner of EV100, a new global business initiative designed to fast-track the uptake of electric vehicles and infrastructure, LeasePlan itself has committed to transform to a zero-emission total fleet by 2030. This is part of LeasePlan's sustainability strategy that includes plans to educate customers on making the switch to low-emission vehicles, facilitate the uptake of low-emission vehicles and transition LeasePlan's own employee fleet to a fully electric fleet by 2021.

“While currently the percentage of electric vehicles in our European fleet is small, we encourage other companies to do the same: making the transition to an electric

18

fleet is one of the easiest ways for businesses to lower their emissions and to help tackle climate change,” added van der Goot.

CSR POLICY The environmental benefits of jettisoning internal combustion engines (ICE) for electric power may be attractive to most companies with a CSR policy (corporate social responsibility), but the process is complex. Few companies are in a position to jeopardise either their operational effectiveness or sacrifice their bottom lines in pursuit of a green agenda. For most fleets, electric vehicles still have to make practical and economic sense before they can rival ICEs. Evaluating these criteria needs to be done at a granular level; the appropriateness of EVs varies widely from driver to driver, business to business and country to country, which is why there is such an important role for leasing companies to play in advising fleet clients on electric vehicle policies.

Stéphane Rénie, head of corporate and social responsibility, ALD Automotive, said: “In key markets such as France, ALD Automotive has created specific teams in charge of ‘educating’ customers on what is still a complex and multidimensional topic, identifying the right business case, facilitating adoption and implementation.

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On an international level, for some specific consultancy projects, we have put in place bespoke cross-country, cross-functional teams to accompany our clients in this journey.”

PICKING THE RIGHT POWERTRAIN Arval, too, has developed a set of tools to help clients choose the right vehicle with the appropriate powertrain, “depending on clients’ objectives and needs, as well as the vehicles’ usages,” said Hugo Salaun, marketing and digital director of Arval.

“This helps the client identify those populations of drivers for whom the electric vehicles are the right option.”

Jochen SCHMITZ head of international fleet, VWFS “During the first two years after the registration of their EV, Volkswagen customers can get an ICE rental car for up to 30 days a year in Germany”.

To highlight just one example, it’s possible that two drivers of the same grade and performing the same role within a company may have significantly different profiles when it comes to the appropriateness of EVs, if one has the opportunity for home charging and the other doesn’t.

As a quick guide for individual drivers to calculate whether an EV or plug-in electric vehicle is a viable option, Alphabet has developed an online eMobility advice tool. Drivers enter their profile and the web-based system works out whether a zero-emission vehicle is a viable solution.

This is a far more involved process for employers, which is why Alphabet introduced its Mobility Consulting Tool (MCT) in 2017. Key elements of the MCT include the identification of infrastructure requirements as well as add-on mobility solutions, such as the availability of rental cars for occasions when electric vehicles don’t meet the driver or business needs.

“Fleet electrification is one of the easiest ways to lower their emissions and to help tackle climate change”, says Mathijs VAN DER GOOT senior consultant, LeasePlan.

20

At this early stage of EV adoption, the opportunity to learn from the experience of peer companies is proving valuable. Sixt Mobility Consulting, for example, organises e-days and conferences to introduce clients that are considering EVs to fleets further along the path of EV implementation.

SHORT-TERM ALTERNATIVES As part of a rental group, Sixt is particularly well-placed to provide short-term rental alternatives to an EV, and all the leading leasing companies have developed solutions to this potential stumbling block when drivers are considering an EV. Volkswagen Financial Services will launch its own special consultancy service later this year, but has already partnered with VW to solve one of the problems associated with EVs. “During the first two years after the registration of their electric vehicle, Volkswagen customers can get a rental car with a normal combustion engine for up to 30 days a year in Germany. This service is provided

by Volkswagen Financial Services,” said Jochen Schmitz, head of international fleet, VWFS. PREPARATION AND COORDINATION With several years of experience leasing EVs, Athlon has identified the pinch points where their introduction can falter unless a comprehensive solution is put in place beforehand.

Issues such as the installation of home charge points, the reimbursement of electricity costs to drivers, access to public recharging networks, and the provision of replacement cars all need to be addressed for the successful implementation of an EV fleet policy.

“Doing the technical inspection of the driver’s home and workplace for charging points, and checking the installation is close enough to the delivery of the vehicle (you don’t want the charging pole to be late) is becoming more of an ‘off-the-shelf’ solution,” said Pieter Goossens, international innovation director, Athlon.

“In our experience the whole process requires constant communication between the installer, driver and customer, and as the leasing company we are the central point, coordinating all of this.”

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vehicle (EV) driving and the reassurance of easy fuelling. When your journeys exceed the 50-km pure EV range, the new Prius Plug-in Hybrid is estimated to sip fuel at a mere 1.0 l/100km (NEDC), which equals exceptionally low CO2 emissions of 22 g/km.

Moreover, it retains the benefits of a hybrid vehicle, meaning continued EV mode at low speeds and automatic minimum battery recharge. To fully reload the large-capacity lithium-ion pack, which boasts double the capacity of the first-generation’s battery, all you have to do is plug it in for two hours.

5.5 MILLION ELECTRIFIED VEHICLES PER YEAR Capitalising on our hybrid powertrain know-how, we are building the road towards further electrification. Toyota’s electrified vehicle strategy centres on a significant acceleration in the development and launch plans of hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), battery electric vehicles (BEVs), and fuel cell electric vehicles (FCEVs). By 2030, Toyota aims at yearly sales of more than 5.5 million electrified vehicles, including 1 million zero-emission vehicles.

By around 2025, every model in the Toyota and Lexus line-up around the world will be available either as a dedicated electrified model or have an electrified option.

This means the number of models developed without an electrified version will be zero. As far as FCEV vehicles are concerned, Toyota is planning on expanding the current line-up for both passenger and commercial vehicles in the 2020s.

In just a few years’ time, we will be accelerating the popularization of BEVs with more than 10 models available worldwide.

Crucial to this expansion are the introduction of next-generation solid-state batteries and the development of a social infrastructure conducive to the widespread adoption of electrified vehicles. This means streamlining battery reuse as well as expanding charging infrastructure. As with the first Prius in 1997, Toyota is ready to yet again revolutionize the way we move.

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21

DOSSIER

EV TCO starting to rival ICE TCO Jonathan Manning

In some countries, such as Norway, EVs are already more cost effective than ICEs, due to their tax treatment.

Although the TCO of Internal Combution Engine vehicles is starting to get equal with the TCO of electric cars, local tax and pricing differences prevent fleets from implementing a universal switch to battery power.

22

It’s the question every fleet operator asks, but there’s no definitive answer. When will cost parity between electric and internal combustion engine vehicles arrive?

The contributing factors are so diverse, so unique to each driver’s mileage and recharging opportunities, and so far beyond the control of fleets, that forecasts are virtually impossible to make.

In some countries, such as Norway, EVs are already more cost-effective than ICEs, due specifically to their tax treatment. Similar situations are already present in other markets for certain vehicles and drivers.

But the vulnerability of the Total Cost of Ownership (TCO) balance to government

tax changes remains acute - a change in the taxation of plug-in hybrid cars has seen their sales tumble from thousands to hundreds in the Netherlands as their costs of ownership have risen.

COST PARITY A report published by the European Commission Directorate-General for Mobility and Transport in November 2017, estimated that purchase cost parity between battery cars and ICEs will occur at some time between 2022-2026. The same report forecast that TCO parity will be achieved two to four years earlier, and by 2030 the TCO will be €0.04 to €0.06 per kilometre less than an ICE.

FLEET EUROPE #95

DOSSIER

For Europe’s major leasing companies, providing calculations of the cost effectiveness of EVs for individual clients has become a key part of their consultancy services, even if there’s no clear-cut answer.

Stéphane Rénie, head of corporate & social responsibility, ALD Automotive, said: “TCO is not just driven by the intrinsic price of the vehicles, maintenance and residuals; it is also heavily influenced by the different layers of taxation (on the car itself at the time of purchase, on the benefit in kind for the driver, on fuel, and on subsidised conditions for usage, such as parking). Taxation is in essence a moving target – and local.

Parity is already reached for some mileage/duration combinations in some markets (e.g. Norway), but is not in sight in other areas, until local incentives are put in place and the technology becomes more affordable.”

DISCOUNTS AND RVS Even within current calculations it’s important for fleets to compare likewith-like; EVs tend to be more powerful than the smaller diesel engines in the same model range, said Pieter Goossens, international innovation director, Athlon. He added that fleet discounts and volume rebates are also typically lower for EVs than ICEs. On the plus side, EVs are not behaving vastly differently to conventional cars in terms of residual values, with some meeting and beating their residual value forecasts and others missing them, according to Goossens.

“All the voices that said there would not be a residual value are absolutely wrong,” he said.

Moreover, after supporting the fleet uptake of EVs, leasing companies will

also be heavily involved in the creation of a used market for well maintained, secondhand EVs, which should secure and strengthen residual values, further reducing TCO. COST ADVANTAGE In a number of key areas, EVs already have a cost advantage over ICEs. With fewer moving parts, their maintenance costs should be lower.

Moreover, Sixt Leasing reports that drivers of electric cars are more likely to respect speed limits and drive more slowly, which is leading to fewer accidents and lower wear and tear charges at the end of contracts.

And finally, across Europe, the cost of electricity is significantly lower per kilometre than the equivalent cost of diesel or petrol, whatever the global price of oil.

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DOSSIER

EV charging forces fuel cost rethink Jonathan Manning

The rapidly developing network of public charge points is quelling range anxiety, but recharging costs vary enormously depending on the type of charger and its location.

The Polar Network gives fleet managers a consolidated invoice for EV recharging by all of their Polar card holders.

THE EUROPEAN UNION’S ALTERNATIVE FUELS INFRASTRUCTURE DIRECTIVE FORCES ALL NEW-BUILD HOMES TO HAVE AN EV CHARGING POINT FROM

2019

EUROPE NOW HAS IN EXCESS OF

100,000 CHARGE POINTS 26

Managing the cost of recharging electric vehicles is forcing fleet managers to rethink every aspect of traditional fuel management policies. With petrol and diesel the metrics were simple – buy fuel as cheaply as possible, monitor each driver’s or vehicle’s fuel consumption, and record business and private miles for tax and reimbursement purposes.

But EVs are different. The cost of recharging can vary from cents to euros, based not on the price of the electricity, but on the type of recharger and its location.

The issue is further complicated by the fact that many fleet vehicles will never use a public charging point. Plus, the beneficial tax treatment of electric company cars means records of private and

business journeys are less important – many employers are prepared to let their staff, both company car drivers and other employees, recharge EVs at the workplace for free.

Networks of recharging points are developing rapidly across Europe. Plugsurfing, the continent’s largest network, had 55,000 charge points in 24 countries at the end of 2017, a dramatic increase on its 35,000 charge points in 2016, and it’s continuing to grow. A recent partnership with the Chargy network of public charging stations in Luxembourg will see an extra 800 terminals and 1,600 charging bays throughout Luxembourg by 2020.

Across the continent the development of recharging networks is attracting new players with formidable resources. In

FLEET EUROPE #95

DOSSIER

Germany, electricity providers and city authorities are driving the increase in charge points, in the Netherlands it’s a mix of electricity providers with several smaller companies, while in Croatia telecoms businesses are diversifying into recharging, said Joséphine Dusol, brand and communications manager, Plugsurfing.

At the end of 2017 Shell made a major statement of intent by acquiring NewMotion, one of Europe’s largest EV charging providers, with a network of more than 50,000 public charge points across 25 countries, and more than 100,000 registered charge card holders.

FAST RECHARGER CORRIDORS ‘Corridors’ of fast rechargers are allowing long-distance travel without range anxiety. E.ON and CLEVER, for example, have announced plans to install 180 ultrafast charging stations, stretching from Sweden through Norway, to Denmark, Germany, France and Italy, as well as the UK. In a rival development, Shell has signed an agreement with IONITY (a joint venture between BMW, Daimler, Ford and the Volkswagen Group) to build a network of 350-kilowatt chargers next to major roads across 10 European countries, starting with 80 of its biggest motorway stations.

These high-powered chargers are up to three times faster than any other charger currently available and will take just five to eight minutes to charge next generation EVs. “Demand for electric vehicle charging on Europe’s major highways is set to grow rapidly. Customers want to go on long journeys in their electric vehicles and feel confident that there are reliable, comfortable and convenient places to charge them quickly,” said István Kapitány, Shell’s global executive vice president of retail.

Yet fast rechargers are the exception to the rule. Europe now has in excess of 100,000 charge points, but the vast majority are ‘slow chargers’, which can take up to eight hours to trickle power into a battery.

Cheaper and easier to install, these chargers are set for the most significant

FLEET EUROPE #95

Many company cars will never use a public charge point, and will only power their batteries at the driver’s home or workplace.

increase. The European Union’s Alternative Fuels Infrastructure Directive, for example, forces all new-build homes to have an EV charging point from 2019.

“There are a lot of people who will possibly never or rarely use a public charging network,” said Tom Callow, director of communication and strategy of Chargemaster, which runs the Polar charging network, the largest network of public charging points in the UK, with over 6,000 charge points. “The recharging infrastructure is critically important, but not for every driver, because lots will recharge at home or at work or both.”

Chargemaster views a ratio of 10 EVs to every public charging point as healthy; and at present there are about 130,000 EVs in the UK and 14,000 charge points.

But fleet managers should not consider a kilowatt hour from each of these recharging stations as a commodity, said Callow.

A litre of diesel may be virtually identical wherever it is bought within the EU, but the type of EV charger and its location make a fundamental difference.

occupy the charger for hours and needs to reflect a fee for parking. In major cities parking can cost several euros per hour, and this has to be factored into the price of recharging.

Add into the equation the fact that none of the major recharging networks own the charging points – they have access to them, but the site owner sets the tariff – and it makes the management of electric charging costs difficult for fleet operators, with neither consistent pricing nor volume rebates available. Costs can vary from 5 cents per charge at an office charge point to more than €1 at a motorway rapid charger.

Where efficiencies can be made, however, is in the administration of invoicing.

Networks such as Chargemaster and Plugsurfing have subscription models that allow fleets to receive a harmonised invoice covering all their card holders.

“Our corporate subscription model provides centralised billing for users and lets them trace individual usage,” said Callow. “No fleet manager wants to be inundated with pay-as-you-go-receipts.”

CHARGER TYPES In broadbrush terms, Callow outlined three types of public chargers: a standard, 3kW unit capable of delivering about 16km range per hour of charge; a 7kW fast charger capable of delivering about 40km for every hour of charge; and a 50kW rapid charger with the capacity to deliver about 220km range for each hour of charge. Paying for this power reflects the different cost base – a slow, 3kW charge may not draw much electricity, but it does

27

DOSSIER

Power to the public Dieter Quartier @DieterQuartier

It is safe to bet that 2018 will see new battery-electric vehicle registrations hit the 200,000-unit mark in Europe. The role of public charging infrastructure is key for the uptake of fleet electrification, but i's more that just adding stations.

ACEA registration data for the first three quarters of 2017 show that the European Union absorbed 70,541 battery-electric vehicles, an increase of 53.1 percent over the same period a year earlier. Looking at the top 5 EU markets for EVs, especially Germany is developing a taste for EVs, posting a 114-percent surge. The Germans are finally catching up with the French, who adopted EVs in larger numbers already in 2014-2015 and remain the largest e-market in the EU. The United Kingdom drops from second to third position, with a relatively modest 37.3-percent growth in EV sales.

Remarkably, the Netherlands – a relatively small market in the EU – is pushing the e-envelope and strengthens its fourth position with a whopping 124.8-percent EV sales growth. Also promoting electric mobility are Sweden and Austria, registering 62.1 and 39.8 percent more EVs than in Q1-Q3 2016. Outside the EU, Norway – the largest EV market in Europe – keeps the e-momentum going, with nearly 33 percent extra EV sales.

DIVERGING EV/CHARGING POINT RATIOS Tax incentives clearly play a role in these evolutions, with the Netherlands as a case in point. But how important is access to public charging points in pushing EV sales? According to the European Alternative Fuels Observatory (EAFO), all types combined (ChaDeMo, Tesla SC,

28

CCS, Type2AC and normal AC charge), there are currently nearly 120,000 public charging positions on the European continent.

Based on the Alternative Fuels Infrastructure Directive (EU, 2014), there should be at least one public charging point for every 10 vehicles, considering new developments in vehicle, battery and char-ging infrastructure technology and assuming that most private electric vehicle owners install their own charging points (source: Electric Vehicles in Europe, European Environment Agency, 2016). With some 600,000 EVs roaming our roads today, it seems the ratio is sufficient.

However, the international Energy Agency’s report Global EV Outlook 2017 indicates that the shares of publicly available charging points are not evenly distri-buted, reflecting large variations in EV/charging point ratios across countries.

LESSONS FROM NORWAY One would assume that in Norway, where every third new car sold is electric, the EV per charging point ratio is low – i.e. there is a relatively well-developed public charging infrastructure. However, AEFO data show that the number of vehicles per public charging position is a remarkably high 15 – the second highest number after Belgium (16). In Spain – which is not a keen EV adopter – the ratio is 3 to 1.

How can this be explained? Research by Figenbaum and Kolbenstvedt suggests that electric car charging does not match refuelling habits for internal combustion engines. In fact, unlike ICE drivers, electric car owners most frequently charge their vehicles at home or at work, relying on slow chargers. 96 percent of Norwegians have access to a charger at home. The third most frequent charging choice is publicly available slow chargers, followed by chargers located in commercial facilities (charging at a destination). Interestingly, fast charging is not used frequently, and it primarily takes the form of planned stops for long-distance trips.

In the Netherlands, however, where one in every fifty new cars sold is electric, drivers have less access to private charging due to the higher degree of urbanisation.

Here, the need for semi-public and public charging positions is greater than in Norway – something that was recognised by policy makers and today is reflected by a 3-to-1 ratio.

Does this explain the sudden surge in EV sales? Not on its own, but it is a cornerstone in convincing people to swap ICE for ‘e’. In any case, infrastructure – private, public, slow or fast – should be tailored to the market. Still, as we move away from ownership to MaaS (Mobility as a Service), it stands to reason that there will be a greater need for public charging possibilities in any case.

FLEET EUROPE #95

DOSSIER

NEW PASSENGER CAR REGISTRATIONS

BY MARKET IN THE EU, BATTERY ELECTRIC VEHICLES Q1-Q3 2017 Q1-Q3 2016 % CHANGE AUSTRIA

4.081

2.919

39,8

BELGIUM

2.043

1.546

32,1

0

0

-

CZECH REPUBLIC*

234

130

80,0

DENMARK

437

681

-35,8

ESTONIA

23

29

-20,7

BULGARIA

FINLAND

387

164

136,0

FRANCE

18.763

16.091

16,6

GERMANY

16.433

7.678

114,0

21

11

90,9

HUNGARY

439

121

262,8

IRELAND

953

657

45,1

1.429

936

52,7

LATVIA

32

17

88,2

LITHUANIA*

37

53

-30,2

6.653

2.960

124,8

263

69

281,2

PORTUGAL

1.095

538

103,5

ROMANIA*

97

23

321,7

GREECE

ITALY

NETHERLANDS POLAND

SLOVAKIA

129

37

248,6

SLOVENIA

202

96

110,4

SPAIN

2.354

1.161

102,8

SWEDEN

3.309

2.041

62,1

UNITED KINGDOM

11.127

8.107

37,3

EUROPEAN UNION

70.541

46.065

53,1

NORWAY

23.237

17.485

32,9

3.144

2.382

32,0

SWITZERLAND

NORWAY Q1-Q3: 23.237 Change: 32,9%

SWEDEN Q1-Q3: 3.309 Change: 62,1%

NETHERLANDS

UK Q1-Q3: 11.127 Change: 37,3%

Q1-Q3: 6.653 Change: 124,8%

BELGIUM Q1-Q3: 2.043 Change: 32,1%

GERMANY Q1-Q3: 16.433 Change: 114%

FRANCE AUSTRIA

Q1-Q3: 18.763 Change: 16,6%

Q1-Q3: 4.081 Change: 39,8%

Source: ACEA

*Can't distinguish between BEV and PHEV

ELECTRIC CAR STOCK: 2 MILLION

Electric car stock Electriccar car stockElectric car stock Electric stock million 2 million2 million 22 million 7%

7% 7%

32% 32%

7% 7%

7%

7%

6% 6%

6%

6%

7% 7%

7% 28% 28%

PUBLICLY AVAILABLE PUBLICLY AVAILABLE SLOW CHARGERS: FAST CHARGERS: PubliclyPublicly available slow chargers PubliclyPublicly available fast chargers Publiclyavailable available slowchargers chargers available slow chargersPublicly Publicly available fast chargers available fast chargers Publicly slow available fast chargers 212,000 OUTLETS 110,000 OUTLETS 212 000 outlets 110 000 outlets 212000 000outlets outlets 212 000 outlets 212

7% 32%

7%28%

13%

13% 13% 5% 5%

5%

25% 25% 5%

7% 7%

7%

7%

32%

28%

13%

8%

8% 8% 8% 8%

8% 12% 12%

25%

17% 17% 8% 8% 12%

17% 12%

25%

17%

110 000 outlets 110 000 outlets 110 000 outlets

5% 5% 5% 5%

5% 5% 5% 5%

81% 81%

China China Japan Japan

China

China

Japan

Japan

United States United States United Sta United States United Kingdom United Kingdom United Kin United Kingdom Germany GermanyGermany Germany

81%

81%

France France France France Norway Norway Norway Norway Netherlands Netherlands Netherland Netherlands Canada Canada Canada Canada Others Others Others Others

Source: IEA analysis based on EVI country submissions, complemented by EAFO (2017a)

FLEET EUROPE #95

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DOSSIER

CHARGING HABITS FOR A SAMPLE OF NORWEGIAN ELECTRIC CAR USERS, 2016 100% 90% Frequency of charging

80% 70% 60% 50% 40% 30% 20% 10% 0%

Home

Workplace

Public Commercial charging facilities

Fast

Home

Workplace

BEV Daily

Public Commercial charging facilities

Fast

PHEV

3-5 times per week

One or twice a week

Less frequently

Never

Source: IEA elaboration based on results from Figenbaum and Kolbenstvedt (2016)

TOTAL NUMBER OF PUBLIC ELECTRIC VEHICLE CHARGING POINTS

IONITY: A EUROPEAN TESLA SUPERCHARGER RIVAL Strong believers in the need for (super) fast chargers are Volkswagen Group, BMW Group, Daimler and Ford Motor Company. They are equal partners in the consortium Ionity, which has the ambition to establish 400 stations across Europe by 2020.

This would mean that EV drivers would have to tra-vel 120 km at most to plug in.

The 350-kW stations use the European CCS standard (Combined Char-ging Standard).

Ionity invites other carmakers to join them. "The first pan-European high-power charging network plays an essential role in establishing a market for electric vehicles," declared Ionity CEO Michael Hajesch. “Ionity will deliver our common goal of providing customers with fast charging and digital payment capability, to facilitate long-distance travel”. Ionity is negotiating with existing infrastructure initiatives. In November, Shell announced it would be joining Ionity – by 2019, the oil company will integrate 80 fast chargers in its network.

COUNTRY

FRANCE

GERMANY

NETHERLANDS

CHARGING POWER

CHARGING POSITIONS

PLUG-IN VEHICLES PER POSITION

NORMAL POWER <= 22KW

14407

9

HIGH POWER > 22KW

1722

77

TOTAL

16129

8*

NORMAL POWER <= 22KW

18334

5

1961

54

TOTAL

22095

5*

NORMAL POWER <= 22KW

29813

3

680

173

30493

3*

NORMAL POWER <= 22KW

7947

18

HIGH POWER > 22KW

1686

67

TOTAL

9633

15*

NORMAL POWER <= 22KW

11117

10

HIGH POWER > 22KW

2407

49

TOTAL

13524

8*

HIGH POWER > 22KW

HIGH POWER > 22KW TOTAL

NORWAY

UK

*For 'TOTAL' category, the # of Plug-in vehicles per position is a weighted average.

Source: EAFO, 2017

30

FLEET EUROPE #95

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COMBINED CYCLE CONSUMPTION FOR NEW CITROËN C3 AIRCROSS: FROM 3.7 L/100 KM TO 5.6/100 KM – CO2 EMISSIONS: FROM 96 G/KM TO 126 G/KM.

DOSSIER

Vattenfall: all electric within five years Tim Harrup

In January 2017 Swedish energy supplier Vattenfall pledged to replace all its passenger and light commercial vehicles in Sweden, the Netherlands and Germany to electric alternatives. This is clearly an enormous challenge. Tomas Björnsson, Head of E-mobility at Vattenfall, gives a close insight into what is involved on the ground.

VATTENFALL Vattenfall is a Swedish stateowned energy company with approximately 20,000 employees and operations in Sweden, Germany, the Netherlands, Denmark, Great Britain and Finland. Vattenfall focuses on growth within business areas that drives the transition to a more climate-friendly energy system, thereby ensuring reliable and cost-effective energy supply.

Vattenfall headquarters are located in Solna, Sweden.

Tomas Björnsson was on stage during the Fleet Europe Summit 2017 to present his electrification strategy.

Discover this inclusive interview

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One of the cornerstones of this policy involves the charging infrastructure for Vattenfall’s own fleet of passenger cars and service vehicles. The charging points for the company fleet are being installed in both the office premises and at power plant locations. Installation at employees’ homes is not yet being carried out systematically, and this is dependent on local conditions. For instance, the tax situation in the Netherlands means that charging points need to be installed at employees’ homes so that they can be reimbursed for the ‘fuel’ used for their company EVs. In terms of model types, Vattenfall is talking to manufacturers about the range of available options. With passenger cars, the range of fully electric or plug-in hybrids already available is considerable, so there is no great problem. All existing lease contracts will have been completed within the next five years or so, and the switch to these vehicles will happen automatically.

LCVS: A DIFFERENT CASE Where utility vehicles are concerned, there are far fewer models and model types available. This means that the first step is to map out the actual use of the vehicles. It soon became clear to Vattenfall that concentrating on plug-in hybrids would not be

the solution here, partly because vehicles that have to drive for long distances would quickly switch to the fossil fuel mode, without any clear CO2 benefit. So the focus is on fully electric LCVs, where there are more models appearing, including Chinese.

This leads on to another reality where LCVs are concerned, this time more positive. For those which are involved in urban environments, the usage pattern of LCVs is easy to map. If it is a service vehicle it is likely to visit seven or eight addresses a day within the city and its surroundings, and if it is an installation vehicle it will probably visit one or two. The payload in this latter case is around 850 kilos, and the driving distance (in both cases) is 100 to 150 kilometres per day. So the vehicle can be correctly dimensioned. In Tomas Björnsson’s words: “It is quite unnecessary to provide a vehicle which is designed to drive 300 km a day when you are absolutely certain that this particular vehicle is only going to drive 150 km. This is an important element in calculating costs.” On the other side of the coin, when it comes to rural vehicles or emergency service vehicles, the longer range models will be required.

POPULAR WITH EMPLOYEES To stimulate the switch to electric, Vattenfall is arranging sessions such as the test drive in Amsterdam some while ago. Employees were able to try an EV and were given the opportunity of relinquishing their current vehicle earlier than the end of the lease contract, and switching to an EV sooner. This proved successful, as Tomas Björnsson explains: “Electric vehicles are very popular when people actually try them out”.

FLEET EUROPE #95

DOSSIER

Tomas Björnsson, Head of E-mobility at Vattenfall, is convinced the electrification of the car fleet will be a success in both customer satisfaction and cost-efficiency.

There has also been a positive reaction from clients, and the second leg of the electrification initiative following applying it to the company fleet and infrastructure, is to build infrastructure for business clients and partners, in other words to provide public charging points too. There is a strong demand for this, and the clients involved are experiencing considerable demand from their own employees to move to EVs. This also filters down to the public at large, and Vattenfall now has the largest partnerbased charging network in northern Europe. In Amsterdam, for example, this network now handles over 90,000 single charging sessions a month.

MOTIVES The reason why Vattenfall decided to go electric with the fleet may seem obvious for an electricity supplier, but the motives are deeper than that. The company has a purpose statement which sets out that Vattenfall wishes to enable fossil-free living within one generation. In other words, babies born today should be able to live entirely fossil-free as an adult.

Everything the company does is designed to move in that direction, and electric driving is a perfect embodiment of this objective. Road traffic, Tomas Björnsson points out, accounts for around 20% of CO2 emissions in Europe and is the leading FLEET EUROPE #95

cause of pollution in cities, so Vattenfall wishes to act as a role model and as an inspiration to others.

MOVING FORWARD Part of the thinking which enabled Vattenfall to be an early adopter of such a radical change, is the clear expectation – the certainty in fact – that the driving ranges of EVs are going to increase. So what’s next? More pilot cases, especially in terms of LCVs, talking to the manufacturers about the increasing capability of the EVs they are going to produce.

And in particular, mapping out where Vattenfall wants and needs to be in four or five years’ time. Finally, even more focus on the charging infrastructure for the company and its clients.

LONG TERM VIEW From a strict cost angle, Tomas Björnsson says that it is still too early to have a clear view, and admits that transitioning to electric vehicles does not make much cost sense in the first years – any sort of transition involves extra cost at the outset. “It is a matter of trial and error, of setting up pilot projects, assessing, adjusting, and so on. But eventually, the benefits outweigh the efforts.”

And indeed, he is very clear about the fact that over a few more years, there will be

substantial cost benefits. This is largely because the price of the equipment – cars and in particular their batteries – is expected to decrease considerably. The TCO of the fleet will undoubtedly diminish, compared to the use of fossil-fuel cars. In the meantime, the value to the brand of making this move is not to be neglected – a company which is visibly doing something of benefit to the environment and therefore to society.

SETTING AN EXAMPLE Magnus Hall, CEO of Vattenfall, said at the time of the announcement of this policy: “We will replace the whole 3,500 car fleet to EV in the coming five years. With this decision we not only contribute to reducing CO2-emissions in Europe, we also set an example for other companies. We will work with our customers to deploy charging infrastructure and to build northern Europe’s biggest connected charging network, InCharge”.

33

INNOVATION

Telematics and data: driving towards a secure and open future A world without data has become unimaginable. Data and appropriate access is at the heart of today’s world, and tomorrow’s. The Internet of Things (IoT) is predicted to number 20 billion devices by 2020 and deliver almost innumerable benefits across societies – something that would not be possible without appropriate access to data.

Edward KULPERGER ICD.D, Vice president Europe at Geotab

IOT IS PREDICTED TO NUMBER

20 BILLION DEVICES BY 2020

34

In the IoT commercial space, the connected vehicle has become a reality. Industries and governments could not operate without them. The myriad of advantages offered by telematics data from connected vehicles benefits society as a whole by offering cleaner, quicker, cheaper and more efficient methods of transportation. Connected vehicle data is a crucial building block of smart cities and communities coping with increasing traffic congestion and pollution as the quest for higher quality of urban life continues.

With such a vast amount of data, comes great responsibility. Security is of utmost importance, making it vital that companies take active measures to protect their customer, partner and own data. Good data governance also requires strong practices around transparency of data use, data minimization, and documentation of data flows. The upcoming EU General Data Protection Regulation (GDPR) sets the standard in that regard and will impose substantial financial penalties to companies who manage data poorly. A penalty which comes attached with significant reputational damage.

At the same time, access to data can be threatened by stakeholders who seek to exclude others from data driven business models and business operations. It is therefore important that all who rely on mobility data understand the essential nature of access to their data, remain aware of possible threats and formulate a strategy to preserve access to data in our connected world.

TELEMATICS - OBD PORT AND THE ROAD AHEAD Currently, the OBD (On Board Diagnostic) port provides open access to vehicle data; the OBD must be present in every internal combustion engine vehicle sold in North America and Europe.

Although the original purpose of the OBD port was to provide vehicle emissions data, its use was quickly expanded by both the vehicle manufacturers and aftermarket solutions to include diagnostics and servicing functionality. Adding connectivity enabled the advancement of commercial fleet management applications.

FLEET EUROPE #95

INNOVATION

Today, these features include real-time driver coaching for improved safety and a range of “use cases” including fuel economy, predictive maintenance, lower emissions and more efficient fleet deployment.

Open in-vehicle access to OBD data means large mixed fleets can use a single fleet management solution across their fleet, providing the ability to manage an entire global fleet through one application.

Much has been written about the need for IoT vendor security, including OTA (Over The Air) update capabilities to counter nefarious cyber adversaries.1 In this context, it must be understood that security is a shared responsibility that must be taken seriously by all stakeholders in the mobility ecosystem and becomes a “license to operate”. Fortunately, increased awareness and attention to vehicle security requirements comes from a number of sources: politicians (and their constituents), regulators, industry associations (SAE, ISO, IEEE, NMFTA, Auto-ISAC, ASAM) and the US Federal Government (response to Executive Order 13693). Informed vehicle manufacturers, tier one suppliers and third party telematics vendors have taken note and are actively advancing vehicle security.

The work of leading telematics platform providers and substantial engagement with the security community has proven that open and secure access to data via the OBD is not only possible but equally advanced as other options and has been endorsed by highly credible stakeholders. Despite this fact, however, some industry players have proposed solutions which would prevent access to data by third parties or owners/ operators of vehicles. This would deny fleet managers access to their vehicle data while simultaneously blocking the broader business and societal benefits which rich, open telematics data delivers.

NEUTRAL VEHICLE: THE BETTER WAY Many stakeholders in the mobility world believe in an approach which will preserve competition and customer choice by securing third party in-vehicle data access.

They firmly believe that open systems are more conducive to innovation than closed

Access to vehicle and driver data is key to innovation and creating competitive advantages in the automotive and mobility business. In the future this will only increase, hence the necessity of having safe access to the right data.

systems, and that the connected vehicle will be one of the most transformative innovations of its time only if it is based on free competition and innovation.

To support and “operationalise” the call for open, secure and real time data access a multi-stakeholder working group, has been initiated, including world leading security experts. This group has put forward the concept of a "Neutral Vehicle" which provides management capabilities to commercial fleet managers, vehicle manufacturers and other independent services developed around open access to vehicle data.

The Neutral Vehicle proposal is based on the concepts of openness, security and interoperability and it has been developed taking note of the five guiding principles identified by the EU Commission C-ITS platform project.2 SECURING THE FUTURE OF CONNECTED MOBILITY Making connected mobility work across the hyper-diverse transportation sector and beyond will require creativity, competition and collaboration. This is an essential dialogue. To be effective in a world of new competitive interests, business models and innovative opportunities, it is vital to have clarity of interests, purpose and strategy.

Security and openness are not opposing forces, and the right approach is one which stands to benefit all players within the fleet and vehicle industries.

THE NEUTRAL VEHICLE • A collaborative, multi-stakeholder initiative • Supporting the mission of neutral, secure and direct access to rich, high quality data • Data handling requires broad industry standards for security, privacy and data quality • Mobility data needs a common language • In order to leverage thirdparty applications, platform standards need to be open (Open API), inexpensive and broadly available More on www.neutralvehicle.com

1. S.1691 - Internet of Things (IoT) Cybersecurity Improvement Act of 2017 2. C-ITS Platform Final Report (2016)

FLEET EUROPE #95

35

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The 3 principles of 'coopetition' in Mobility Frank Jacobs & Pascal Serres

Fleet news these days is all about partnerships, participations and acquisitions – especially in the fast-paced Mobility space. Cooperation and competition have merged into something called ‘coopetition’. Who is working with whom, how and why? A look at the three principles guiding Mobility Coopetition.

It’s hard to take a snapshot of an industry with so many moving parts, and moving at such great speed. But, for the sake of argument, let’s zoom in on the three weeks straddling the New Year, including the Christmas break. In this relatively short and quiet span of time, Fleet Europe published no less than ten news items on mergers, partnerships and acquisitions in the Mobility space.

FROM A TO B Working to combine different means of transportation is the first and most obvious way to improve how people move from A to B. But the Moovel/SSB collaboration also points to the first guiding principle of 'coopetition' in the Mobility space: OEMs aim to use Mobility as a means to keep control of distribution, and to generate added value by offering new services.

AUTOMOTIVE 'COOPETITION' Of course, simultaneous collaboration and competition (or 'coopetition') in the automotive industry is nothing new. There are plenty of examples illustrating the complex web of companies that develop partnerships in one area while remaining competitors in other domains.

Listen to top car execs, and you'll hear how each and every one of them tells a surprisingly similar story. They’re all moving away from merely ‘selling metal’, and are edging towards becoming the central hubs of a holistic mobility ecosystem.

But that method of 'coopetition' takes on an amplified character in Smart Mobility, which by definition depends on high tech (which requires large investments and specialised knowledge) and more often than not is multimodal (i.e. touching upon various fields of mobility competence).

Take for instance the news published on 12 December, announcing that “Daimler's mobility subsidiary Moovel and SSB, the public rail company for Stuttgart, are testing an on-demand mobility service”.

FLEET EUROPE #95

MENTAL LEAP OEMs have made the mental leap from fighting against e-hailing and car-sharing solutions to investing in them. If it’s inevitable that traditional business models will be cannibalised by those of the future, then it makes sense for the OEMs to do the cannibalisation themselves. It’s clear that OEMs are in it to stay firmly in the lead. To list just a few recent examples:

• Daimler Mobility Services (DMS) has acquired a majority stake in Chauffeur Privé, the leading private-hire vehicle service in France. This is not the first time a manufacturer moves into e-hailing.

37

SMART MOBILITY

• Bosch

and Continental have acquired a stake in Here. In so doing, the German OEMs are widening their R&D capacities.

• French equipment manufacturer Faurecia has signed a five-year contract with Accenture for the delivery of products and services in the connected and autonomous driving space.

• Intel is partnering with top car makers, including BMW and Nissan, for selfdriving car technology.

Tech companies become a vital ad-on for OEMs and leasing companies in the race to smart and integrated mobility management.

Others have already invested in Uber or Lyft. This trend will continue, as this is a fast-growing customer segment.

• Renault is partnering with infrastructure and municipal services multinational Ferrovial to launch a car sharing service in Madrid.

• ViaVan, a joint venture between Mercedes-Benz Vans and American tech start-up Via, will work with Berlin's public transport authority BVG to offer on-demand ridesharing in the German capital.

LEASING AND RENTAL The second principle of 'coopetition' in the Mobility space has to do with independent leasing and rental car companies, and their efforts to partner with platforms in order to finance cars and provide services.

Those platforms can be the corporate customers of those leasing and rental car companies, or even private ones. Main condition: provide the advantages of leverage and group negotiation. A good example of the former is the cooperation between ALD, Blablacar and Opel. In the second category, ALD is also partnering with DataCity Paris, to develop solutions for tomorrow's cities.

SUPPLIERS AND OEMS The third main principle of Mobility 'coopetition' is between suppliers and OEMs, and their efforts to develop new powertrains and new technologies. Some recent examples include:

38

Major suppliers also need to team up against the background of tech giants like Apple, Google and Amazon, which not only have the know-how but also the deep pockets to generate the research that may turn out to be industry-deciding.

LEVEL BELOW Meanwhile, there’s a level of 'coopetition' below that of the huge budgets, with companies pooling knowledge and resources to work on specific products and services.

Some recent examples:

• Denso,

the Japan-based advanced automotive technology company, has acquired InfiniteKey, a U.S.-based startup developing systems to use smartphones as car keys.

• SEAT and carpark operator Saba are launching Droppit, an app that allows the user to have groceries delivered to their car.

FAIT ACCOMPLI What these three principles demonstrate is how mobility-related technology is accelerating rapidly – as well as, more importantly, the degree to which tech acceptance within both the business sphere and society as a whole is now a fait accompli.

However, the picture these three principles paint should not be taken as a guide for the future. Technological advancement is not just speeding up change, but also changing the way change itself is happening. What seems certain, though, is that coopetition will continue to accelerate, as mobility companies edge closer to the holistic solutions of the future.

FLEET EUROPE #95

ADVERTORIAL

CONCEDED EDITORIAL SPACE

Arval praised for its new reporting tool At the 2017 Fleet Europe Summit in Estoril last December, Arval's efforts in taking the full-service leasing industry to a new level were recognised by a jury composed of its peers. Its Integral Fleet reporting tool was made runner-up for the International Fleet Industry Award.

Philippe BISMUT - Arval CEO “This consolidated view will make it much easier for fleet customers to develop a strategic vision on the management of their fleet, both in a single country and internationally”.

In today's economy of mergers, acquisitions and divestments, most fleet and mobility managers have to work with more than one lease provider. They have to aggregate and analyse fleet data from incompatible systems, leading to much frustration and wasted time.

This service gap has now been filled by full-service leasing company Arval with the launch of Integral Fleet.

“To develop such a tool was a request of our clients for a long time, and while it was not technically possible before, it is today possible to gather and handle such data in a really secure and customer-friendly environment,” commented Bart Beckers, Arval CCO at the Fleet Europe Summit. “At Arval, we are happy to take the lead and invite all the other industry players to join our initiative in our common clients' best interests.”

INTEGRAL FLEET How does this new reporting tool work?

Integral Fleet aggregates data provided by the various lease and fleet management suppliers a fleet customer works with on an international level, and offers a consolidated view of a number of key performance indicators in categories such as Fleet, Spend, Usage and CSR. Over time and listening to customer input, it can easily be enriched with other indicators.

“This consolidated view of their fleet across their various suppliers will make it much easier for fleet customers to develop a strategic vision on the management of their fleet, both in a single country and internationally,” said Philippe Bismut, Arval CEO. Integral Fleet offers its users a fully customisable 360° view of their vehicle fleets, facilitating decision-making and taking into

FLEET EUROPE #95

Bart BECKERS - Arval CCO “We are happy to take the lead and invite all the other industry players to join our initiative in our common clients' best interests.”

account all key aspects of their fleet, regardless of whom they source the services from.

INDEPENDENT ICT PLATFORM Arval has a self-evident benefit in working with this new tool. But why would other lease suppliers provide their data to Integral Fleet?

“Because it is run by an independent thirdparty provider of ICT services,” explains Philippe Bismut. “Neither Arval nor the other suppliers have access to the data on the platform or to the dashboard as viewed by the customer. Other lease suppliers will be keen to cooperate because their customers demand it and because their data will be treated with full confidentiality.”

Arval is the first in the industry to launch such a service, making it a reference on the global market.

MORE INFO emmanuel.mellier@arval.com

39

REMARKETING

Revolutionising crossborder remarketing with CARaPASS Frank Jacobs @FrankJacobs

Since its introduction in 2006, Car-Pass has virtually eliminated mileage fraud in Belgium – to the benefit of both the used-car market and its customers. CARaPASS aims to do the same at European level. Its success could revolutionise cross-border remarketing.

50 %

OF SECOND-HAND CARS SOLD IN SOME EU COUNTRIES HAVE MILEAGE FRAUD

10 years AFTER INTRODUCTION OF CAR-PASS, BELGIAN MILEAGE FRAUD HAS ALMOST DISAPPEARED.

Tampering with a vehicle's odometer so it indicates a lower mileage than actually driven allows unscrupulous traders to sell used cars at higher prices. Mileage fraud means consumers buy cars with more wear and tear than advertised, resulting in a higher risk of costly repairs, reduced road safety and greater environmental damage.

BEST IN CLASS Belgian used cars and vans require a Car-Pass to be sold. By registering mileage at crucial moments of a vehicle's life cycle, the Car-Pass certifies that the odometer has not been tampered with.

Before the introduction of Car-Pass in 2006, it is estimated that between 60,000 and 100,000 used-car odometers were 'clocked back' every year in Belgium. By 2014, less than 1,250 cases of mileage fraud were reported. In 2015, the EU named the Belgian mileage fraud prevention system 'best in class'.

An independent study (by PwC), ten years after the introduction of Car-Pass,

40

confirmed that mileage fraud has almost completely disappeared from Belgium – with some very beneficial effects for the country's second-hand market.

INDIRECT IMPACT

• Consumers trust Car-Pass and no longer doubt the accuracy of the mileage of used vehicles. They experience increased transparency, credibility and professionalism.

• This increased consumer confidence has strengthened the Belgian used-car market, with prices on the used-car market better reflecting the actual value of the vehicles. Ultimately, this benefits the industry players.

• Car-Pass has also had an indirect impact on other forms of fraud, again strengthening consumer confidence – and increasing the sector’s growth potential.

But Car-Pass has one major drawback: the system's effectiveness is limited to cars whose life-cycles started in Belgium. It cannot vouch for the correct mileage of imported vehicles.

FLEET EUROPE #95

REMARKETING

Tampering with a vehicle's odometer so it indicates a lower mileage than actually driven allows unscrupulous traders to sell used cars at higher prices.

CROSS-BORDER In 2015, for example, 20% of the odometers of vehicles imported from the Netherlands were tampered with – at a cost to the Belgian consumer of €2 million. In a first cross-border extension of the Car-Pass system, Belgium and the Netherlands agreed in 2016 to exchange mileage data between their two national databases – Car-Pass and RDW, respectively. In a few months' time, instances of fraudulent mileage for Dutch cars imported into Belgium fell by two thirds.

Keeping in mind that a recent report by the European Parliament's Transport and Tourism Committee (TRAN) suggests that in some EU countries, mileage fraud affects up to 50% of all second-hand cars sold, and that a relatively simple system like Car-Pass can have such demonstrable benefits, it was a matter of time before an EU-wide solution would emerge.

EUROPEAN REMARKETING The question was: Who will take the lead?

The answer, it turned out, was the remarketing industry itself – more specifically, the European Car Remarketing

FLEET EUROPE #95

Association (CARA), a trade organisation aiming to both represent and promote the interests of remarke-ting at European level. CARA came up with a proposal it calls, in reference to itself and to the original Belgian system, CARaPASS. Essential for the success of the tool is that it has access to a critical mass of data. The aim is that CARaPASS, at least initially, will be based on data provided by lease companies (for their ex-lease vehicles).

DATA POINTS For reasons of privacy, only three data points will be used: VIN number (for the vehicle), and the relevant date and mileage of the reading. CARaPASS will then aim for the initial data to be supplemented by readings during maintenance and repair sessions.

In an initial phase, the data will be made available to mass remarketers and remarketing platforms, with others to follow. CARaPASS is slated to kick off some time in 2018. Because of the complexities involving gathering data from multiple markets and from a variety

of sources, the beneficial effect of the system may not be as instantaneous as with the Dutch-Belgian cross-border example, or as complete as with the Belgian example – at least not initially.

MAJOR OBSTACLES But if the benefits of the original example – virtual elimination of mileage fraud, increased consumer confidence, price credibility and market reputation – can be reproduced, albeit at a somewhat slower pace, CARaPASS will eliminate one of the major obstacles to cross-border trade in used vehicles between European countries.

The imminent creation of the CARaPASS label (and car-specific QR code, which will link to an online database where mileage can be double-checked) could provide a huge boost to the European remarketing industry, and revolutionise the way in which Europeans buy (and sell) their used cars from as early as next year.

41

EXPERT

Why the current OEM business model is obsolete The thrust and speed of e-mobility is impacting the business model which OEMs have been using for the last 120 years.

They need to do more in order to remain in the game as nontraditional competitors are starting to change the rules.

ANDRÉ GILBERT LATENDORF, Latendorf & Doggaz GmbH

Although worldwide new car registrations remain rather stable, in 2017 the new e-sales already exceeded 1 million cars by November 2017 with more than 1% of the new car sales (Hybridcars.com, 2017; Irle, Pontes & Irle, 2017; Statista, 2017). China makes up 50 percent of that volume.

That poses substantial challenges for automotive manufacturers and their sales organisations. The reasons mentioned frequently are1: • The increased number of electrical vehicles and especially the need for a different service infrastructure, be it for charging or for maintenance and repair. Especially for fleet managers and their cost consciousness this poses an important challenge for the OEMs not only in providing solutions but first to provide expertise.

• Ever more knowledgeable customers in the digital world, frequently the customers have got more knowledge about electric cars and the surrounding aspects than the OEMs and their sales force.

CHANGE TO REGAIN GRIP OEMs need to rethink their business model as the current one loses profitability. In addition to the customer needs and pure market requirements there are regulatory constraints, which force OEMs to adapt.

In 2014 the EU has defined a clear target for CO2 emissions for car manufacturers2, with heavy penalties involved in case of non-compliance.

In the past, product and delivery competence were key driving factors. OEMs were experts in producing and shipping cars and dealers were experts in bringing them to the customers and making sure that they remain in perfect running condition.

However, that is changing. In the e-mobility world the traditional car manufacturers are no longer the product experts, and the dealers are no longer the delivery and service experts.

So logically, the access to the customers is significantly more difficult for e-cars for the existing players and that results in the need to change the business model. This change may well be necessary in order to become the mobility experts of tomorrow.

1. Roland Berger Strategy Consultants & IESE Business School, 2013; Hainz et al., 2015; Mandat, 2015; Fischer & Parkin, 2016; Latendorf, Kohl & Minarski, 2017 2. Mock, 2016; European Commission, 2017

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EXPERT

NEW REGISTRATIONS OF BEV AND PHEV

1 200 000

1 000 000

Others Sweden Netherlands France UK Japan Germany Norway USA China

800 000

600 000

400 000

200 000

0

2010

2011

2012

2013

2014

2015

2016

2017

Source: EV-Volumes (based on Nov 2017 figures) (Irle, Pontes & Irle, 2017)

FUTURE MEASURES Range and price issues are frequently mentioned as obstacles. So currently the traditional OEM focus on building cars with more range at a lower price. This may take a while, but given the current development it is only a matter of time until this issue is solved.

NEW PARTNERSHIPS FORMING To adopt the new technology and adapt to the market context, OEMs are seeking help in that battle with respective and logical experts in their field.

Ionity is a partnership of several car manufacturers that was formed in November 2017 aiming to build 400 fast charging stations in Europe by 2020.

Shell already agreed to participate and others may follow, as the current petrol station network offers an excellent starting base for electric charging stations.

The infrastructure issue is frequently mentioned as well. In 2016, there were just over 100.000 petrol stations in the EU1 and following a research report from the EU from April 2017, there are as many electric charging points around2.

However, it should be taken into consideration that a petrol station has got more than one charging point. The plan for the next five years is to increase that number by a factor of ten, in order to allow a reasonably dense network3.

Waze is an app that tracks the driverâ&#x20AC;&#x2122;s movement and OEMs are collaborating with this start-up with the goal of deducing information to help the decision making for an electric vehicle, based on the driving profile.

This actually poses a big risk for the incumbent players, such as oil companies and petrol station providers as utility companies are entering that market because of their electricity expertise.

Another logical cooperation is between the OEM and the utility providers in order to exploit further smart charging options as they are the experts when it comes to electricity.

However, this is only the beginning and as sales grow exponentially so will the need for future solutions to satisfy that increasing demand for e-mobility services. There are many more initiatives forming all over Europe.

POTENTIAL MEASURES TODAY The above described measures indicated potential and actual future activities.

Nevertheless, regardless of technological progress, there are a few measures the OEMs can take today to ensure their competitiveness.

Understanding customer requirements beyond the number of vehicles As self-evident as that statement is, the reality is frightening, especially when fleet customers are concerned. Many OEMs know how many cars their top customers have in their car park, what the annual mileage of those cars is and some are even aware of the scheduled replacement cycle. However, when it comes to optimising the car parks, saving costs and increasing the usability, fleet managers are on their own.

1. FuelsEurope, 2016 2. Pape & Bjornavold, 2017 3. IEA, 2016.

FLEET EUROPE #95

43

EXPERT

EVOLUTION OF BATTERY ENERGY DENSITY AND COST 500

1 200

BATTERY COST (USD/kWh)

400 350

800

300 250

600

200 400

150 100

200

BATTERY ENERGY DENSITY (Wh/L)

450 1 000

50 0

0 2008

2009

2010

2011

2012

2013

2014

2015

2020

2022

US DOE battery cost (PHEV)

2020 Tesla battery cost target (BEV)

2022 GM battery cost target (BEV)

2022 battery cost target (PHEV)

US DOE energy density (PHEV)

2022 energy density target (PHEV)

Note: PHEV battery cost and energy density data shown here are based on an observed industry-wide trend, include useful energy only, refer to battery packs and suppose an annual battery production of 100 000 units for each manufacturer.

Source: US DOE (2015 and 2016); EV Obsession (2015); and HybridCARS (2015).

E-MOBILITY WILL DRIVE OEM BUSINESS MODEL E-mobility has a strong impact on the automotive industry today and there is little doubt that the impact and influence increase every day. It is too early to predict a successful business model and maybe there is not only one in the future.

However, the current market development and regulatory constraints force the OEM to adapt and change and the suggestion is to not only do that from a technical perspective, but rather use it as an opportunity to review the complete value adding design process and start from the customerâ&#x20AC;&#x2122;s perspective in terms of usage and in terms of purpose and design thinking.

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Electric vehicles have got some constraints, without doubt, but compared to ICE they already offer some advantages. As a current research project shows, fleet managers would appreciate a more holistic view and understanding from their OEM counterparts in order to advise them adequately. This goes far beyond knowing the technical specifications of an electric vehicle, but deals with a profound understanding of the mobility requirements of the fleet customers.

Co-creation with the customers In some instances, fleet and private customers are invited to fleet clinics or pre-evaluation of electric vehicles to share their opinion. However, in the same study, some fleet customers state that this is already too far down the road.

Electric vehicles offer unique opportunities and if the purpose of those vehicles

were the driver design, this might result in products and solutions more adapted to the business need. One example could be a delivery service, where the driver would not need to open the driverâ&#x20AC;&#x2122;s door, go around the car and open the back door to fetch a parcel, but rather go straight through. The modified powertrain also opens up design opportunities.

That requires OEMs to modify their development strategy and involve customers from different industry segments earlier in the development process. In the past, there have been vehicle designs for specific purposes (i.e. agriculture, construction). This way of thinking could be extended further by making use of design advantages that the electric vehicles bring.

FLEET EUROPE #95

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FOR INTERNATIONAL FLEET & MOBILITY LEADERS

ANALYSIS

From vehicle tracking to enterprise management Alison Campbell

Telematics has advanced and the added value for corporate fleets has gone way beyond location tracking and driver safety aids. The speed at which that evolution has occurred continues to gather pace and the next few years is expected to be an exciting time for this hybrid of telecommunications, information technology and mobility.

For corporate fleets the new generation of telematics enables monitoring of driver behaviour and vehicle health, the tracking of maintenance intervals and communication with end customers. Fleet telematics helps increase safety, cut costs and downtime, augment the overall efficiency of the fleet and boost customer service.

A BRIEF HISTORY OF AUTOMOTIVE TELEMATICS We can thank F1 Motor Racing for early stage automotive telematics, such as computer controlled fuel injection and anti-lock braking systems embedded in the vehicle. These have now evolved into fullblown advanced driver assistance systems (ADAS), such as adaptive cruise control, automatic emergency braking, collision avoidance, lane assistance, blindspot monitoring to name a few.

The development of early stage fleet telematics was driven largely by security and safety concerns. These included tracking devices to locate and recover stolen vehicles and navigation systems used for route planning.

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THE INFLUENCE OF INSURANCE TELEMATICS Then came black box insurance telematics, initially aimed at young drivers as a way to monitor driving habits and offer lower cost insurance. A byproduct, many believe, is that the incentive of more affordable insurance has served to influence drivers and promote good driving behaviour.

The technology was based on a black box device (approximately the size of a deck of cards) fitted inside the car, which recorded when and how it was being driven: speed patterns, mileage, cornering, swerving, braking, acceleration and so on to build up a picture of personal driving style. The device sent the data (using a standard wireless communication network) to the insurer who then used it to calculate an individual insurance premium accordingly. This technology also spawned a raft of fleet monitoring systems and applications.

Fleet telematics has gone way beyond these early stage programmes to offer more in the way of enterprise management and a method for controlling and organising

FLEET EUROPE #95

ANALYSIS

Telematics technology can be used to track personal driving behaviour and can help fleet managers find out how their fleet is performing.

vehicles and mobile workforces. It helps monitor driver behaviour and increase safety. It enables fleet managers to know exactly where their drivers are and this, in itself, negates the outdated and unsafe practice of calling drivers on their mobile phones. The system can also be used to communicate with end customers via text message (such as estimated time of arrival, when they can expect their parcel and so on) as a way of improving customer service.

THE NEXT PHASE OF FLEET TELEMATICS - THE POWER OF DATA Can-bus integration into fleet systems and the use of sensors in and around the vehicle means telematics can capture and log a vast amount of data, which can be overwhelming for fleet managers.

So, solution providers are now offering products and services that turn that data into meaningful insight. This is the new telematics, the fourth and fifth generation systems that are set to change the face of fleet management over the next few years. Much of the technology will be embedded or built into new vehicles by manufacturers. As this happens, itâ&#x20AC;&#x2122;s no surprise that some telematics and

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leasing providers are moving away from pure play companies to fleet data service provision.

Mining fleet telematics data is hugely beneficial. Knowing whether every vehicle is performing optimally, reaching its peak in terms of fuel efficiency and having a clear picture of how the fleet is performing overall can only influence better decision-making. Being able to examine data over time to discover patterns, such as how weather conditions affect fleet performance or how a small change in route planning could have a huge impact on delivery times and fuel efficiency. Imagine being able to compare your fleetâ&#x20AC;&#x2122;s performance against industry benchmarks set by others? Fleet data providers think this is the future.

But making decisions based on past data is one thing, predictive analytics is another and that is where many in the industry believe telematics is headed.

There are already systems available that use telematics data to perform risk assessments and predict accidents and breakdowns before they happen so that avoidance action can be taken.

CLOSER LOOK In this analysis, we take a closer look at some of these advances and see just what lies in store for the future of fleet telematics.

Imagine if your fleet telematics could communicate with other systems, such as billing and accounting, delivery and order tracking. Having to pull all this data from different sources was the bane of every fleet manager but with telematics integration, itâ&#x20AC;&#x2122;s possible to have them all talk to one another and be able to produce automatic reports.

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ANALYSIS

10 key fleet benefits of telematics Jonathan Manning

Tracking vehicles can transform the efficiency of every area of fleet management

More and more corporate fleet customers and suppliers are convinced of fuel-efficiency, productivity and safety benefits of Telematics. But successful implementation is often a challenge as it is more than pushing the button.

LOCATING VEHICLES The original purpose of vehicle tracking systems was to give fleet operators minute-by-minute location of all of their vehicles. This allowed security firms with cash in transit to track their valuable cargoes. It is still used today to locate stolen vehicles.

1

Vehicle location has also enabled emergency services and breakdown and recovery companies to despatch the closest vehicle to an incident. As the service has developed, the despatch has become more sophisticated – control rooms can now despatch the closest vehicle with the most appropriate tools, parts and skills on board to an incident, even if this is not the closest vehicle.

Suppliers: LoJack Pioneering OEM in this respect: Opel OnStar

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ROUTE PLANNING Tracking multiple journeys by multiple vehicles allows companies to develop far more efficient route schedules. Analysis of the data can show unnecessary duplication of routes by two or more vehicles, enabling planners to plot more efficient sales or service territories for their staff. It can also highlight under-utilised vehicles, which could be re-assigned to other areas of the business, allowing companies to grow without increasing the size of their fleet.

2

In addition, telematics data reveals vehicles that suffer regular congestion and traffic jams at certain times of day on certain roads, and then re-route to avoid these. In one famous case study, UPS discovered that each time its drivers had to turn left and cross oncoming traffic it created delays and increased the risk, so the company introduced a ‘no left turn’ policy for its route FLEET EUROPE #95

ANALYSIS

planning in 2004. Since then it has saved millions of litres of fuel by plannning routes as loops that only involve turning right, even if the distance is slghtly longer.

engine running, even though the vehicle is not in use. Reducing incidents of idling has helped heavy goods vehicle operators cut their fuel bills significantly, and the same philosophy applies to vans.

Suppliers: mapanything.com Pioneering OEM in this respect: PSA through its partnership with Ocean

Supplier: Geotab Pioneering OEM in this respect: Toyota Proace Telematics

tyre pressure monitoring systems, so that fleet departments are aware of low pressure tyres, often before the driver.

Supplier: Lo-Jack Italia Pioneering OEM in this respect: Mercedes Me

EMERGENCY RESPONSE A European Union-wide initiative to accelerate the speed of response to crashes will see vehicle manufacturers forced to install eCall in all new vehicles from March 2018. eCall automatically alerts the emergency services if in-vehicle sensors (e.g. airbag) detect a serious crash. The EU estimate that eCall can speed up emergency response times by 40% in urban areas and 50% in the countryside and can reduce the number of fatalities by at least 4% and the number of severe injuries by 6%.

9

IMPROVED CUSTOMER SERVICE In today’s just-in-time economy, knowing when an engineer, service technician or delivery is going to arrive is a key element of customer service. It allows businesses to plan their schedule accordingly, and helps to avoid private customers waiting in all day for a delivery. The exponential growth of online retail means telematics is now vital for the offer of specific time slots.

ACCIDENT INVESTIGATION Many insurance claims are shared between both parties because the insurers cannot attribute blame convincingly to one driver or another. Telematics gives fleet operators the information to challenge claims when their driver is not at fault. It can prove both the speed the vehicle was travelling, and pinpoint exactly where the vehicle was on the road – essential for contesting a disputed claim.

Supplier: OptimoRoute

Supplier: MiX Telematics

3

DRIVER BEHAVIOUR AND COMPLIANCE The combination of duty of care to employees and escalating insurance costs has seen companies pay much closer attention to the driving behaviour of their staff. Telematics systems can identify incidents of over-speeding, harsh acceleration, braking, and swerving. This allows fleets to spot drivers with a more dangerous driving style, and offer training (and discipline) to encourage a safer approach. The result is typically fewer accidents, less severe collisions when they do occur and cheaper insurance costs.

4

Telematics can also be a powerful aid in the governance of compliance, ensuring drivers comply with hours of work rules.

Supplier: Masternaut Pioneering OEM in this respect: Volkswagen with ConnectedVan

IMPROVE FUEL ECONOMY Telematics can drive down fuel bills in two key areas – firstly, a less aggressive driving style improves fuel consumption.

Secondly, telematics sensors can record incidents of engine idling – when the driver leaves the

5

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6

CAMERAMATICS The combination of telematics with forward (and rearward) facing cameras provides compelling evidence for the swift resolution of insurance claims. And the faster the claims are settled, the lower the cost of the claim. The camera provides video evidence of what happened in the lead up to a collision, while the telematics system provides the proof of vehicle speed and position on the road. Cutting edge systems transmit this video and telematics information to the fleet and insurer the instant the system senses a crash.

7

Supplier: Smartwitness Pioneering OEM in this respect: Citroën ConnetedCAM

TRACK VEHICLES FOR MAINTENANCE It can be difficult for fleet operators running vehicles with multiple drivers, such as daily rental firms, to keep a check on mileages for scheduled maintenance.

Telematics systems offer a solution to this, accessing information from vehicles’ diagnostics systems which makes it easy for managers to plan regular servicing of their cars and vans, and even to identify developing faults. This can include remote

8

Supplier: All car makers from April 2018 Pioneering OEM in this respect: Mercedes with eCall

THE FOUNDATIONS FOR THE FUTURE Telematics will be at the heart of mobility services and the connected car. It will allow car share companies to allocate their fleets according to demand, making sure vehicles are in the right places. It facilitates keyless entry to vehicles, so pool fleets and car clubs do not have to monitor keys, and it tracks who is driving the vehicle and how far they drive. It’s also a building block for ‘pay on use’ insurance. The mind-blowing levels of data collected by cars will be able to signal approaching weather conditions, incidents of ice on the road, and average traffic speeds, all in real time.

10

Supplier: TomTom Telematics Pioneering OEM in this respect: Volvo with Connected Safety

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ANALYSIS

Telematics - from evidence to insight Alison Campbell

So far, telematics technology has focused on data - principally collecting data, data that could be used as evidence (in the case of dash cams and tracking devices) but there is now so much data being collected that the emphasis is shifting from evidence to insight.

20 %

YEARLY GROWTH IN COMMERCIAL VEHICLES MANAGED WITH TELEMATICS IN EUROPE

BY 2020

10 MILLION COMMERCIAL VEHICLES MANAGED WITH TELEMATICS IN EUROPE

The data that telematics technology provides can equip fleet managers with insight so that they are not driving blind (as it were). The potential impact is far reaching, customers report savings way beyond the financial investment in telematics systems. These include areas such as fuel and insurance, others talk about a reduction in risk and increased productivity. Telematics has now become the thrust of development in fleet management with a flurry of activity from telematics specialists, OEMs, lease companies, insurance providers and others.

It can often be difficult for fleet managers to fully understand why they want the technology. So, telematics specialists that have millions of data feeds into their systems everyday can help distil fleet data into meaningful benefits.

Over half (55%) of the respondents to an RAC Telematics Report in 2016 reported lower fuel costs from installing telematics systems, 43% reported fewer collisions and a reduction in maintenance costs but they also found 15-20 other benefits, such as exposing excessive mileage claims by drivers.

Anglian Water in the UK, which runs a fleet of 1,640 vans reported a saving of £650,000

50

after installing telematics. Alongside a typical 10-13% increase in fuel economy across the fleet, this comprised a saving in insurance premium of £60,000 a year and tyre costs of £10,000 a month.

A West London-based private hire company fitted a telematics system costing £35,000£40,000 a year across 300 vehicles following a period of a high number of collisions. It resulted in a saving of £600,000 per annum.

DIAGNOSTIC INSIGHT INTO VEHICLE HEALTH The AA (a leading breakdown recovery service in the UK) has teamed up with Trakm8 to launch Car Genie, a device that predicts vehicle breakdowns before they happen.

Designed to be self-installed, the system plugs in to the vehicle’s on-board diagnostic (OBDII) port. This enables it to read the vehicle’s EOBD (European On-board Diagnostics) system in real time and broadcast the information to a mobile app.

The AA has been trialling Car Genie since April 2016 and claims it will anticipate up to a third of breakdowns. What it does is analyse the fault codes that come from the device and the breakdowns members have had.

FLEET EUROPE #95

ANALYSIS

Telematics systems can predict breakdowns before they happen. They can connect to a workshop so the garage can schedule an appointment and ensure that all parts are available when the vehicle arrives.

Car Genie detects faults such as degrading battery health, problems with ignition coil and failing exhaust gas recirculation and alerts users to act on them. The AA also contacts customers in serious cases.

Leasing company Arval has been intensifying its investment in telematics to roll out an initiative across the globe. It offers an intuitive telematics platform called Active Link for fleet customers, which can be tailored to the needs of the fleet providing clear summaries of important data and alerts based on pre-defined requirements. The company introduced the system a year ago to retrieve data and provide recommendations on journey optimisation or driver behaviour. Arval’s solution spots abnormal driving behaviour but it is up to the fleet manager to decide what to do with that information.

By collecting data from vehicles’ onboard diagnostics units (OBD), smart telematics can identify vehicles in need of service and maintenance, transmit this information to the fleet manager, the leasing company and the driver, and connect to a workshop so the garage can schedule an appointment and ensure that all parts are available when the vehicle arrives.

This is one of the services delivered by Moove Connected Mobility, part of the European AutoBinck Group. The company FLEET EUROPE #95

offers telematics solutions that include the usual vehicle tracking and driver behaviour information. But its Connected Maintenance programme, which integrates and automates the service and maintenance of vehicles, is an innovative solution for the fleet and automotive aftermarket.

The system is OEM agnostic, capable of working with all makes and models, said Himanshu Gautam, technical director at Moove Connected Mobility.

“Every OEM has its own specification in terms of collecting and presenting the data. Our format translates this data to a format that we understand, and our mobility platform connects all the different partners; telematics systems, parts companies, vehicles, garages. We have made a platform where everything is interchangeable so if a company is working with another system, we can connect with their APIs and translate the data to how the customer needs it.”

Importantly, Connected Maintenance is ‘privacy proof’, and can be installed without fleets having to contend with data protection issues and the new General Data Protection Regulation rules, said Henk Kooijman, managing director of Moove Connected Mobility.

ENGAGE DRIVERS RATHER THAN MONITOR Monitoring individual drivers can be a huge burden on the workload of the fleet manager so Masternaut has come up with a way of engaging drivers with its In-Cab Coach. It offers immediate feedback via a small dashboard mounted device that provides drivers with instant feedback when it detects wasteful and dangerous driving behaviour.

Mix Telematics has a similar system, the Mix DriveMate, which gives live driver feedback deploying a traffic light system of LEDs - green, amber, red. Starting on the left of the display, it moves to Amber and then Red as driving deteriorates in terms of harsh acceleration, braking, cornering and speeding. If the driver doesn’t self-correct, the system emits a buzzer

BENEFITS OF TELEMATICS: • Lower fuel costs • Fewer collisions • Reduction in maintenance costs • Exposing excessive mileage claims • Savings in insurance

51

ANALYSE

Telematics solutions enable companies to monitor their vehicles’ usage much more closely.

53 %

REDUCTION IN SPEEDING THANKS TO TELEMATICS

52

sound that notifies them that the event will be recorded. It also includes a panic button the driver can use to send an alert if they are in trouble. It complies with privacy legislation by providing a button the driver can use to switch the system from ‘business’ to ‘private’ mode and this helps categorise mileage for tax purposes. All data collected by the system is available to customers in various report categories including tax and expense management, personal and business mileage, fuel, driver scoring, event, driver identification and road speed.

ECONOMIES OF SCALE FROM IN-BUILT TELEMATICS In-Vehicle Technology (IVT), such as navigation, safety and entertainment systems is nothing new but car manufacturers such as Audi, Volvo, BMW and Mercedes-Benz are now teaming up with telematics technology companies to build capability into vehicles. In this way, costs fall as manufacturers achieve economies of scale. In-vehicle technology provider Harman recently issued a statement saying that IVT has been shown to have a positive effect on residual values (RVs) of fleet vehicles. At the Fleet Europe Summit 2017 in Estoril, Portugal the company also shared the results of a study

by BF Forecasts that proved the added value of high-end navigation systems and their appeal to used car buyers.

Harman goes beyond navigation systems with a Life Enhancing Intelligent Vehicle Solution (LIVS), which claims to offer drivers an intelligent driving experience and features capable of learning and anticipating the preferences of vehicles passengers. It offers real-time traffic updates enabling drivers to plan and modify their routes smartly, reduce time in congestion, cut down on stop/start, reduce fuel consumption and cut wear and tear on drivetrains.

Over the Air (OTA) updates enable fleets to stay up-to-date with the latest security features.

INTELLIGENT TELEMATICS INSURANCE Octo Telematics has formed a strategic alliance with Willis Towers Watson to focus on advanced UBI (usage-based insurance) data analytics through algorithms and tools to provide actionable insights to the insurance industry. DriveAbility aggregates and analyses granular telematics and insurance data to provide a driving score and assist insurers to design, score, issue and bind telematics-based insurance policies. In a FLEET EUROPE #95

ANALYSIS

such as monitoring driver behaviour, FNOL (first notification of loss) remote tachograph downloads, CAN bus integration, driver ID and vehicles diagnostics. Route optimisation and scheduling algorithms are also built into the device.

EASIER AND LESS DISRUPTIVE TELEMATICS INSTALLATION Masternaut offers a range of services and solutions for fleets, from vehicle tracking, fuel cards and company car products, all linked by its own “eco-system” fleet platform Masternaut Connect. The platform processes thousands of data points per second in EU-based data centres and turns it into actionable insights for fleet customers via web application, mobile apps or its API.

press release issued by the company in December 2017, Fabio Sbianchi, CEO, Octo Telematics said: “The increased amount of data being gathered means that more information than ever before must be analysed swiftly and accurately through AI and algorithm technology in order to provide insurers with actionable intelligence. DriveAbility is a welcome addition to the Octo product suite and the work we do with Willis Towers Watson will allow us to continue to build an insurtech ecosystem that provides ever-greater technological advantages to insurers.”

Trakm8 recently launched what it claims is the world’s first in-cab dash cam integrated with fully-featured telematics.

The RoadHawk 600 features a choice of single and dual cameras with detachable heads which can be used to monitor the road ahead alongside the inside of the cab. It can be configured to automatically provide real-time images and video footage surrounding harsh events picked up by the system’s built-in accelerometer.

It also provides fleet managers with the opportunity to live stream footage from the cab. It mirrors the functionality of Trakm8’s advanced tracking devices, FLEET EUROPE #95

In May 2017, Masternaut announced an exclusive partnership with Vauxhall/ Opel to provide fleet telematics services to commercial vans. As of May, Opel and Vauxhall vans could be purchased with Masternaut’s telematics devices pre-installed, thus eliminating deployment time, hassle and cost. The vehicles are then managed by Masternaut Connect.

The offer is available in the UK, France, Germany, Belgium, the Netherlands and Luxembourg.

Industry analysts estimate that over 10 million commercial vehicles in Europe will be managed with telematics by 2020, representing growth of 20% per year.

Part of this growth will come from reducing hurdles to deployment, which include taking productive vehicles off the road and incurring separate installation charges.

The CEO of Masternaut, Dhruv Parekh, believes that pre-installed telematics is a game changer: “The telematics industry has witnessed impressive growth in recent years, but many companies still want easier installation. Despite its proven benefits, telematics is still only installed in a tenth of European commercial vehicles.”

In August 2017, Masternaut and Telefleet Insurance announced the launch of telematics-based insurance for the UK motor fleet market, a major step forward in risk management for the motor fleet industry, it claimed. The partnership provides fully integrated telematics, insurance products

and claims management (encompassing FNOL capture) in a single solution. In a press release, Parekh is quoted as saying: “To align our telematics solutions with an insurer such as Telefleet is a natural extension of our products and services.

We recently conducted a controlled study on over 9,000 vehicles, showing that our products reduce speeding by 53%. Thanks to this partnership, we can now reward our customers’ commitment to driver safety with lower insurance premiums. It takes us one step closer to our vision of a connected world that is safer, cleaner and more productive.”

NO ONE UNDERSTANDS THE VEHICLE BETTER THAN THE MANUFACTURER Ford Telematics, which is powered by Telogis, is available in Ford commercial vehicles. It uses built-in GPS technology to monitor a range of performance metrics including vehicle location, speed, hard braking or acceleration, excessive idling, seat belt use, oil life, engine temperature, battery and it’s all done in realtime. Telogis provides the processing via a secure web-based application and a dashboard, aptly named InSight Alerts. From here, data can be formatted into actionable reports. Coming straight from the manufacturer, this diagnostic data has the edge in terms of authenticity and accuracy - no one can tell you more about Ford vehicles than Ford themselves, right?

But it’s not just Ford, a number of manufacturers are already proposing connected options on their models, such as: ConnectedDrive (BMW), Connect Apps (Peugeot), R-Link (Renault), Command Online (Mercedes-Benz). An obvious benefit to all drivers of the connected car of the future will be the Europe-wide ‘eCall’ system which will alert the emergency services automatically in case of an accident, shortening response times.

The fleet industry is changing as never before and telematics data is central to that, enabling greater visibility, analysis, insight and action than has been possible in the past. This will continue as manufacturers, lease companies, technology providers and the like bring more to the table in terms of advancement, connectivity and capability.

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ANALYSIS

10 steps to a successful telematics strategy Jonathan Manning

A poorly implemented telematics policy can anger drivers and deliver vast quantities of data but no insight. So follow these steps to maximise the return on your investment.

DETERMINE YOUR BUSINESS OBJECTIVE Telematics systems can record and transmit data from just about every area of a vehicle’s working life, so it’s important to have a clear goal from the outset. Is the principal intention to save money, improve safety, develop greater operating efficiencies or enhance customer service? These aren’t mutually exclusive objectives – each should follow on from the other – but deciding which is most important will help to determine which vehicles should start the project, what data needs to be captured, which reports should be generated and how this should be presented for optimum ease of use.

• Highlight how telematics can help route planning so drivers avoid congestion, enjoy smoother journeys, and endure less fatigue.

• Explain how telematics data can help defend them in incidents of contested accident claims, protecting their individual record, driving licence and reputation.

• Reveal how telematics can identify developing faults in a vehicle, so that preventative maintenance can be carried out before a breakdown occurs.

• And reassure them that in the event of a breakdown or accident, telematics location systems can help emergency assistance to arrive much more swiftly.

INVOLVE DRIVERS FROM THE OUTSET There are compelling positive messages for the introduction of telematics, but if drivers are unaware of these, the fear of a ‘big brother’ watching their every move will lead to a sense of mistrust and hostility.

REASSURE DRIVERS ABOUT THE SCOPE OF DATA CAPTURED Will vehicles be tracked when employees are making private journeys? How will data of poor driving behaviour be used to discipline drivers? Experts advise a positive approach – private journeys stay private; incidents of dangerous driving will be investigated and appropriate training offered to protect the driver in future.

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• Hold group and individual meetings to explain the business objectives, and involve trades unions and worker councils.

• Show how telematics can reduce the administratove burden of recording mileages.

• Emphasise how telematics can improve drivers’ safety by identifying the risks they face and the training and support that will be available to reduce these dangers.

• Highlight how telematics can reduce costs on corporate bottom lines, making the business more profitable and their jobs more secure.

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BE WARY OF UNINTENDED CONSEQUENCES Some fleets want to share in the success of telematics projects by sharing some of the gains with drivers. They might, for example, introduce driver league tables with prizes for the best performing driver or drivers in the previous week or month. Popular league tables include fuel economy and the lowest number of speeding incidents. However,

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ANALYSIS

Implementing a successful telematics system requires the support of managers and drivers, as well as robust technology.

for this type of incentive to work, every driver has to believe he or she has a chance of winning. If, on the other hand, their territory involves lots of stop-start traffic, then it will be much harder for them to win a fuel consumption challenge than a driver on quieter roads. And a driver who triggers an alert about unsafe driving on a Monday has little incentive to drive extra carefully for the rest of the week, because he or she knows they are already out of the competition.

SELECT A FLEXIBLE SUPPLIER While it’s tempting to think of telematics as sole supply arrangement, the truth of modern business is that vehicles join and leave fleets each time a company buys or sells a subsidiary. A uniform telematics system can only ever be shortlived, so it’s essential that the software which processes telematics data can receive and consolidate information from multiple, often incompatible hardware into single coherent reports.

SECURE THE WHOLEHEARTED SUPPORT OF SENIOR MANAGEMENT There’s no point in a sophisticated telematics system generating priceless insight into how a business might improve its operating efficiency and safety if no one is going to act on the conclusions. Senior management has to buy in strongly to the potential of telematics to transform a business in every country, so that each line manager uses the management reports available. Regular local feedback to drivers is vital, whether individually or in groups, and if this doesn’t happen the sense of a company’s commitment to telematics will soon weaken in the eyes of drivers.

START WITH A PILOT PROJECT However many zeroes roll along the foot of the business case to install telematics, it’s wise to tread carefully. A limited pilot of five to 10 vehicles will demonstrate how the data collected can be reported and analysed, and give an opportunity to revise or change goals if the early results are not producing the information and insight required. Selecting a wide variety of pilot vehicles might also indicate which vehicles or departments hold the greatest potential for improvement.

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USE THE PILOT TO TRACK EASILY MEASURABLE AREAS Mileages, fuel expenditure, time behind the wheel, vehicle idling time – these are straightforward, objective measures with a direct application to the corporate bottom line. Improvements here lead to

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immediate savings; whereas improvements in driving behaviour are more difficult to quantify – excessive acceleration or harsh braking are more subjective criteria.

IDENTIFY MEANINGFUL BENCHMARKS Is your fleet efficient or inefficient, safe or dangerous? There’s no absolute answer, but telematics does offer the opportunity to compare fleets in different areas of your company, either geographically or by trade. It’s also possible to compare performance with fleets of a similar profile, run by other companies. The larger telematics firms can facilitate this type of benchmarking, and the results can reveal the so-called ‘lowest hanging fruit’ – the easiest areas to secure the biggest gains.

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REVIEW THE SITUATION Once telematics reports start to deliver management information, give drivers and managers the chance to respond. Management may start with measurement, according to the business mantra, but as companies change so may their data and reporting needs change.

Selecting the appropriate areas to measure and formatting actionable reports, whether in real time or retrospectively, is the key to the ongoing success of fleet telematics.

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ANALYSIS

The future of fleet telematics connecting the dots Alison Campbell

The next twelve months will be pivotal in terms of fleet telematics development as OEMs, lease companies and technology players expand and improve on the solutions they’ve already introduced whilst also preparing for a driverless future - a future in which the fleet transport and logistics industry will play a major role.

By far the most interesting areas in the shorter term, however, particularly for fleets, will be Big Data and mobility.

40 %

OF ROAD DEATHS ARE WORK-RELATED

2018

MAAS ACCELERATES TELEMATICS TECHNOLOGY DEVELOPMENT

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Having recently launched an integrated dash cam telematics solution, Trakm8 is currently building on that theme by developing Advanced Driver-Assistance Systems (ADAS) to monitor high-risk behaviours such as mobile phone usage, insufficient concentration on the road, and driver micro-sleeping - a service it intends to bring to the market in 2018. The company also plans to incorporate these high-risk behaviours into its driver behaviour scoring algorithms.

Colin Ferguson, Managing Director of Fleet and Optimisation at Trakm8, commented: “The RoadHawk 600 is a powerful device, which is the culmination of years of development from our engineering teams to amalgamate two highly sought-after products into a single compact device. Our customers can expect all the benefits of in-cab cameras combined with telematics functionality in a single low-cost unit.”

The device allows operators to address compliance issues, reduce insurance liability, identify driver training requirements and offer advanced notification of vehicle faults. The company believes that the RoadHawk 600 is the first 4G telematics camera of its kind.

MOBILITY AS A SERVICE Mobility services marry together transport needs, vehicles, road infrastructure and technology into one canny ecosystem in which telematics plays a key part. It is predicted to be one of the high growth areas of the near future and 2018 will see activity in terms of new technologies and services being launched.

In 2017, Fujitsu and HERE technologies announced a plan to link their respective competences into integrated solutions for customers developing advanced mobility services and autonomous cars.

Fujitsu is a leading system integrator with data analytics, AI and high-performance computing technologies, while

FLEET EUROPE #95

ANALYSIS

Maintenance costs correlate with mileage rather than the age of the registration plate. Bald tyres, worn-out brakes etc. can be prevented by feeding telematics information into a maintenance programme.

HERE is a provider of digital mapping and advanced location-based data services and technology.

Through their planned partnership, the companies aim to support automakers, mobility providers and cities with integrated, end-to-end technology solutions.

Initially, the focus is on Japan-originated companies but there are plans to expand into international markets.

Fujitsu has deep experience in services and information systems such as automotive telematics. The company has provided approaches that utilise data analytics and AI through Fujitsu Human Centric AI Zinrai and its mobility service Fujitsu Mobility Solution SPATIOWL. Fujitsu will serve as a strategic system integration partner for HERE and provide various mobility-related solutions worldwide to address opportunities in the smart city and smart mobility arenas.

Fujitsu plans to offer innovative mobilityrelated solutions, such as an on-demand mobility solution for the car-sharing market where car allocation can be optimized based on forecasts of traffic as well as supply and demand. It also shared information about a traffic monitoring solution developed with the aid of information

FLEET EUROPE #95

recognised and predicted from camera images that enables quick response to traffic incidents such as violations and accidents. Plus, there is a multi-modal route guidance solution that optimises city traffic by taking train delays and congestion relief into account.

Shingo Kagawa, CTO at Fujitsu Limited, had this to say: “By leveraging human-centric AI and high-performance computing technology, as well as our experience with services related to location information, Fujitsu will promote the expansion of mobility services and the provision of the dynamic maps necessary for autonomous vehicles. Through this collaboration going forward, we will contribute to improved convenience in travel and shipping for people around the world.”

“In the next five to ten years, we will see massive changes in our transport, energy and city infrastructure,” said Edzard Overbeek, CEO HERE Technologies.

“During this transition, automakers, transport providers and cities will need fast and easy access to critical location and analytics technologies. By uniting our respective technologies, HERE and Fujitsu can help customers build powerful products and services for the autonomous world.”

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ANALYSIS

TELEMATICS - DATA MINING AND SECURITY Telematics can produce a large amount of useful data, we know this but no one can ignore the security risk that comes with that.

Reports of hacking into vehicle systems have come to light in recent years and this is a worry for fleet managers, not used to having to deal with the rigours of information system security. The warning is to ensure all parties, from one end of the fleet supply chain to the other, particularly telematics providers can demonstrate extremely high standards of security and protection.

5 HIGH-RISK BEHAVIOUR ELEMENTS • Mobile phone usage • Insufficient concentration on the road • Speeding • Driver micro-sleeping • Tailgating

THE CRITICAL ROLE OF PREDICTIVE ANALYTICS IN TELEMATICS We are beginning to see more development around predictive analysis, rather than simply relying on what telematics data can tell us about past events. One of the most powerful capabilities of telematics is the ability to use data to feed a predictive analytics platform. Fleet managers can then forecast events before they happen, such as collisions, mechanical failures, breakdowns, route delays and so on.

It’s one thing to monitor driver behaviour and initiate safety training after the fact, it’s quite another to be able to predict and prevent accidents in real time. There are telematics systems now, such as DriveMate from Mix Telematics, that provide instant feedback to drivers in real time. Such solutions are becoming increasingly sophisticated and we may even see them being built into fleet vehicles in the future.

Paul Miller, product manager, Fleetmatics, said, “Maintenance costs correlate with mileage rather than the age of the registration plate. Bald tyres, worn-out brakes, decaying tie rods and failing engines can have devastating consequences – for your drivers as well as other people on the road. Despite the strict safety regulations across Europe, 40% of road deaths are work related. Drivers [of heavy commercial vehicles] are required by law to perform a daily safety check of their vehicle, so feeding insights from these checks can be an effective star-ting point for a maintenance programme.”

He advocates preventative maintenance, which enables fleet managers to schedule vehicle health-checks at the best times, rather than face repairs on a faulty vehicle during crucial and busy periods. “By using a fleet management system, businesses can

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stay on top of vehicle health and receive pre-emptive maintenance alerts. These services can track key indicators such as engine-on time and mileage, and determine the type of service a vehicle may need. Once a vehicle hits a point where maintenance might need to be checked, an automatic email is issued or an alert will come up in the reporting suite. Fleet management systems can also use insights gleaned from drivers’ daily vehicle checks to help managers keep on top of potential maintenance issues,” said Miller.

“By taking extra care of the fleet, vehicles will run more efficiently and have a smaller environmental footprint. It also decreases the likelihood that vehicles will need to be taken of the road for unscheduled repairs – reducing the risk of an LCV malfunctioning out on a job and boosting safety.”

TELEMATICS AND THE CONNECTED VEHICLE Autonomous vehicles are not yet common but they’re coming - possibly sooner than expected - and cannot be ignored. It is expected the fleet sector will lead the way in terms of widespread adoption. In this respect, telematics will continue to drive the agenda in terms of how fleets are monitored and managed and data around asset utilisation, routes, safety and the ability to communicate with driverless units will be crucial for maintaining integrity and safety.

This, of course, includes vehicle-to-vehicle communication, which will be critical for safety. In the short term, systems such as adaptive cruise control, forward-collision avoidance and lane assist will continue to improve but these technologies are already here. The future of telematics is to find new and more advanced ways in which vehicles are connected to each other, their surroundings, the environment and management systems.

The future of fleet telematics is an exciting one but there are challenges ahead. Being connected - vehicle-to-vehicle, smart cities and communication networks is advantageous but it can also be dangerous and will inevitably create risk around unknown vulnerabilities. All fleet managers must familiarise themselves with the potential hazards of thrusting headlong into this brave new world. If they do so with caution, awareness and preparation, the potential commercial benefits will be significant while the risks become manageable over time.

FLEET EUROPE #95

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MANAGEMENT

Digitalising our Fleet Management is crucial Steven Schoefs @StevenSchoefs

Juergen Freitag took up his post three years ago. He manages a fleet of 48,000 vehicles worldwide, including 5,000 LCVs. The bulk of the Siemens fleet – 33,000 vehicles – is in Europe. Aiming to streamline fleet management, Mr Freitag decided to digitalise the process. But digitalisation is not the only topic on his To Do list.

Juergen FREITAG, Siemens “This initiative will lead to great benefits in the future.”

Praised for his “truly global strategy, with clear responsibilities and an efficient steering on regional and local levels,” Juergen Freitag was proclaimed Global Fleet Manager of the Year at the Fleet Europe Awards on 6 December in Estoril, Portugal. It was the very first time this specific award was issued, so naturally Mr Freitag – Head of Global Fleet Management at Siemens – was honoured. So, what exactly does his prize-winning approach look like?

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“In fact, we came up with a six-point global fleet commodity plan. One: defining and developing a global guidance paper; two: outsourcing operational fleet management; three:enhancing our procurement methods, which are already very good; four: harmonising the various demands in the regions in order to produce the best possible TCO. Digitalisation related to operational driver elements is a fifth point, and last but not least, we want to ensure that all these capabilities are based on transparency in the fleet portfolio. We are well on track with most of these topics.”

What is digitalisation all about?

“Digitalisation starts where the driver interfaces with our internet tool. There’s a single sign-on for the driver, and a link to our internal corporate directory, so no special approval from HR is necessary.

The level of eligibility of the driver is also included in the directory, so there is an automatic direction in which he can choose the car according to the right policy level.

And there is a configuration process. Then you have the car selection finalised and approval follows automatically.”

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MANAGEMENT

“The next step will be to include the dealers and all the data of the car. And another step will be delivering an HR Benefit in Kind interface for salary management and EDI for direct invoicing.

The goal is that at the end there is no need for paper anymore in the fleet management process. Digitalisation should be a very convenient, end-to-end process, from selecting a product to invoicing to cost centre and this all aligned with your fleet programme and policy.”

Why are you doing this?

“We want to create pro-activity in fleet and safety management. We would like to save time, optimise communication between supplier and driver and enhance accuracy in procurement and fleet management. So, there are various reasons – all leading to TCO optimisation. These reasons can vary from region to region and from country to country, just as maturity in terms of fleet management and digitalisation varies.”

Do you aim to have all cars, all drivers and all suppliers brought together into one digital tool?

“We are adopting the level of digitalisation according to respective market maturity. What can’t be done digitally needs to be replaced by other procedures.

If there is a supplier with an extremely sophisticated digital approach, combined with a very high level of commercial service, then perhaps we could do this, but this not yet the case.”

we’re using external Fleet Management providers to digitalise the fleet management flow. This is in fact the case for most of the countries.”

What about the Return on Investment of this fleet management digitalisation?

“It depends on the countries, their maturity and their past cost structure. This initiative is one that will lead to great benefits in the future. In fact, we’re investing in business development with our partners as we expect from them the same approach and we believe that if it benefits them, it will thereafter benefit us. Digitalisation often leads to a disruptive new business or service model significantly improving the existing cost structure and in principle also lessening the workload.”

How are you planning to install alternative mobility solutions in this digitalised management process?

“At the moment, we’re not as yet adopting any real new mobility solutions. It will depend on the needs of our employees. Senior management has a userchooser policy and there it could be a solution. However, for sales staff and technicians we haven’t yet seen a ‘mobility as a service’ solution that fully fits the needs of our employees, nor one that is flexible and convenient enough, or that is at least cost-neutral compared to the car fleet we have. Having said that, there are definitely some good pilot programmes out there.”

In your opinion, who owns the data?

“The question is: Which data? Contracts are usually based on data protection rules, and everyone has to follow these rules. If a car is registered to a person, then the individual is the owner. In our relationship, I would say that the owner of the data is Siemens. We give our partners the opportunity to get insight into the data, but it is Siemens that has ordered the vehicles and it’s Siemens’ employees who are driving the vehicles.

But in the end, it all depends on local laws and regulations.”

Finally, what can you tell me about your green mobility programme?

“Siemens has a clear company strategy in this regard: we intend to be carbon neutral by 2030 at the latest. Based on this goal, Siemens has established a global programme and has defined actions to be taken according to various business modules and the respective emissions these modules produce. Fleet is one such module. I report on our ongoing progress within this programme to the global Sustainability Board. This includes members of Siemens’ Global Board, which means there is huge motivation to monitor the developments with regard to CO2 and sustainability and therefore, as a result, to optimise the Fleet module.”

So not a driver profile app?

“Not yet, we have to work in phases. First you need to have the right KPIs and to digitalise the way to process these KPI flows. If you implement an app, it should be one that is interesting enough for the drivers to use, and frankly, at this moment, there are not so many fleet apps that are widely used.”

Your digitalisation is in the hands of Sixt Mobility Consulting in Germany.

Why don’t you work with multiple lessors?

“That’s not an issue. Our fleet managers are in control of fleet management in their country or region. And here we’re talking about fleet management digitalisation. Independent of the lessors, FLEET EUROPE #95

If you believe in digitalisation, I imagine you’re also a believer in connectivity.

“That is the next important step. With direct connectivity and telematics, we hope to evolve towards even more efficient fleet management. We will then have more intelligent and real data, and that will be used to gain uptime of the vehicle, reduce fuel consumption and improve safety issues. We have telematics in the UK and we will now expand the telematics programme with pilots, including in Germany, where we will use it for our electric fleet and where we can monitor aspects like charging and the way people drive e-vehicles.”

WHO IS JUERGEN FREITAG? • Company: Siemens AG • Function: Head of Global Fleet Management • Years in function: 3 • Number of vehicles managed worldwide: 48,000 vehicles including 5,000 LCVs • Sector: Industry, Energy and Power Generation, Healthcare

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MANAGEMENT

Company car may not be best option for all Frank Jacobs @FrankJacobs

The Novartis European fleet strategy has five pillars, Peter explains: optimise regional supply, disentangle fleet operations, ground savings to reality, observe duty of care, and build the future. Considering the relatively short time frame, a lot has been achieved: “We started with supplier consolidation, defining how we measure and track TCO and designing and piloting our 'above-country', regionalised procurement model. Adding to that, we've disentangled our fleet operations and are implementing our outsourced provider”.

Peter SZELENYI, Novartis

At the end of 2015, Peter Szelenyi was appointed Global Fleet Category Manager and Regional Travel Category Manager (Europe Region) at Novartis. In 2016, he designed and rolled out the fleet strategy that earned him the 2017 European Fleet Manager of the Year Award.

How does that strategy work, and what lessons can his peers learn from it?

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You're the most recent of many Fleet Europe Awards laureates from the pharma industry. Why is that?

“Certainly, volume matters. But also the fact that pharma companies mainly buy premium vehicles. Also, we have a working group of Pharma Fleet Managers that meets every month to discuss operational practices, innovations, market challenges, etcetera. We do this while maintaining strict ethical rules for our discussions to keep prices, contracts or any other competition-related topics off the agenda. Instead, we compare best practices in dealing with tax changes, the coming of IFRS16, and so on”.

Your job encompasses both Fleet and Travel. Do you see both growing together in future?

“Absolutely. In fact, this is the area where I see the biggest opportunities for innovation over the next three years. The future

of keeping our business mobile and flexible will be to bring together car-sharing and car-pooling, train and air travel, public transport and various forms of accommodation in one, consolidated platform”.

Finally, what's your advice to peers also aiming for excellence?

“Understand what your business is about.

Corporate fleets are business enabler tools, so we have to find cost control opportunities, without reducing the effectiveness of the fleet to run a successful business”.

“As a personal tip: dive deep into European emission regulation changes, understand upcoming access restrictions, and get to grips with your company's overall emission and sustainability goals. Don't be ruled by old perceptions. These days, for many employees, company cars may not be the best option for mobility”.

NOVARTIS IN A NUTSHELL • Novartis is a world-leading healthcare company.

• The company employs 123,000 across 155 countries.

• In 2016, net sales amounted to $48.5 billion and net income to $6.7 billion.

• The Novartis fleet numbers around 30,000 globally, of which about half in Europe.

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MANAGEMENT

In socialist Hungary, Renault 16 was our dream car Frank Jacobs @FrankJacobs

Peter Szelenyi manages a fleet of about 30,000 vehicles worldwide for pharma giant Novartis.

He was crowned 2017 European Fleet Manager of the Year at the Fleet Europe Awards, past December in Estoril. It's been an interesting journey for the boy who fell in love with the smell of petrol in his father's car shop, back in 1980s Hungary.

“I spent my weekends helping my father to repair engines. Petrol smelled sweet to me, and made me who I am today. I'm a certified car mechanic and technician, but I went on to obtain a B. Eng. in combustion engines and technical management”.

Party members “In socialist Hungary, petrolheads like Peter had a very limited range of cars to aspire to: “It was all Ladas and Trabants.

Only privileged party members could get western cars. Our dream car was the Renault 16 (chuckles)”.

After his studies, Peter launched his professional career in procurement. “In most roles, fleet was included, so I stayed close to my passion”. The most influential companies on his path were GE, DHL and – since 2007– Novartis.

Passionate believer “About a year and a half ago, Peter had the chance to test-drive an electric car.

“I became a very passionate believer in pure electric mobility. This is the most FLEET EUROPE #95

Peter Szelenyi of Novartis and European Fleet Manager of the Year is rarely happier than when fishing.

exciting change in our industry today”.

But cars have to compete with a wide range of interests: “In 2004, I had the chance to visit the Bordeaux area for a whole month.

I was fascinated, so much so that I’m now also a certified wine-maker. I returned to my first passion – cars. But once I retire and go back to Hungary, I plan to set up a small vineyard”.

Boeuf bourguignon “As an accomplished amateur cook, Peter is quick to suggest some pairings to his favourite dishes: “For a boeuf bourguignon, I'd suggest a nice pinot noir. If you prefer white wine, I'd make a cream chicken to go with a chardonnay or riesling”.

Peter is rarely happier than with fishing rod in hand. “Nothing can wipe out stress like standing in beautiful river water, waiting for the catch”. Catch and release, that is: no barbed hooks for Peter.

Charging challenge But how will he go fishing at Lake Balaton or in Slovenia in a full-electric? “The

average EV has a range of about 200 to 250 km. It's about a 700-km trek to Slovenia.

Once outside Switzerland, the biggest challenge is the charging network”.

In 5 years, advances in battery and charging technology will solve the issue. For now, “my EV will cover 95% of my needs.

For some tasks, shared vehicles are the obvious solution. For holidaying without range anxiety, car rental may be better”.

WHO IS PETER SZELENYI? • Nationality: Hungarian • Age: 43 (born in 1975) • Lives in: Basel (Novartis HQ) • Married: with Andrea. They have two sons, Adam (12) and Barnabas (11) • Favourite album: Master of Puppets (Metallica)

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BUSINESS

SEAT: on trend with SUVs, focus on connectivity Tim Harrup

As SUVs have become a reality, we asked SEAT International Fleet Sales & Remarketing Director Giuseppe Tommaso about how he sees this domain, along with other issues facing the industry.

How important is the compact SUV sector going to be for the industry in general?

The SUV segment has been experiencing a positive trend for years and it is definitely very important for our business. We entered this segment for the first time last year with Ateca, achieving a huge success and recently we launched the SEAT Arona, our new crossover, which will be followed by the arrival of a large SUV this year, confirming that SEAT has its product roadmap aligned with the market trend.

Do you expect to see this segment take sales away from the traditional B and C sectors, including brakes?

The growth of SUVs will have an effect on the classic segments, such as hatchback, station wagon and MPV. This last segment will be impacted most, followed by a small drop of hatchbacks, while the station wagon share will probably be similar to today. SUVs are already present in many companies’ car policies, especially in the area of user-choosers, and the next step may be to observe small SUVs in the segment of service cars. We believe that in the short term the volume of SUVs will be quite similar to hatchbacks in true fleet.

Giuseppe TOMMASO, International Fleet Sales & Remarketing Director, SEAT: "We want to become a frontrunner in connectivity."

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How is SEAT positioned within the Volkswagen Group and how do you differentiate the models from their in-house rivals?

average. Our customers are digital natives, which is why we want to become a benchmark when it comes to giving them what they are asking for. In addition, we are the gateway to the Volkswagen Group as 70% of our customers in EU5 come from other brands outside the Group. And at the same time, we are a brand created in Barcelona and we have a stronghold in the south.

Does SEAT have any plans to increase its offering in the mobility domain?

Our goal is to become a front-runner company in connectivity. We are launching the SEAT Dongle, a device which enables vehicles that are not adapted to support digital technologies to access latest generation connectivity services. Thanks to an OBD connection, the Dongle securely extracts data from the car and sends it to the Smartphone to be able to interact with the vehicle via an app. From 2018 on, our cars will be equipped with connectivity of the future.

You are based in Catalonia – is there any impact from the current situation?

SEAT is a company with deep roots in Barcelona, Catalonia and Spain. So far we have been able to develop our operational activity with normality. Political stability and legal certainty, together with belonging to the European Union, are essential to ensure the economic and employment sustainability of our company.

SEAT has its own DNA. We are the brand with the youngest average customer in Europe – 10 years younger than the sector FLEET EUROPE #95

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FLEET EUROPE #95

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BUSINESS

Customer satisfaction is our #1 strategy Steven Schoefs @StevenSchoefs

Like its main competitors, Alphabet grows above the market average. “But our growth is organic,” says CEO Norbert van den Eijnden. “And we expect our growth to continue as we will stay customer-oriented and deliver added value service in eMobility.”

What's the secret of your organic growth?

“More than others, we have focused and we will focus on customer satisfaction. That's our #1 strategy. Plus, we have successful, innovative solutions like AlphaCity and AlphaElectric. These show our customers the way to new, efficient mobility solutions, and that's what they want.”

With all the talk about smart mobility, why is traditional fleet management still so popular?

Norbert VAN DEN EIJNDEN, CEO Alphabet: "We expect our growth to continue."

“One does not exclude the other. Moving to smart mobility doesn't mean you shouldn't focus on your core, which is still fleet management and leasing. We've always said that leasing will be our main activity, at least until 2020. Of course, we're already looking for new solutions, together with our customers. But even as a multimodal concept, mobility will still be centred on the car for years to come”.

What are Alphabet's goals for the next two years?

“At Alphabet, we believe that close cooperation with the customer is the key to success. When finding the right eMobility solution for our client, we take the time to understand the company, their goals and their fleet. Our consultants work together with the customer through the steps for switching on eMobility. For instance:

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actively exploring electrification opportunities, as we do with AlphaElectric.”

“Second element: Oasis, the new software we've been working on for two years.

Uniquely, the central element in this database is not the car, but the user. Many others have tried this before, but failed. We are convinced we've found the right way.

The system will be rolled out in Spain next spring, and in all other markets thereafter. Not via the classic waterfall method but more directly, by including users from the beginning. That process is both quicker and more sustainable.”

Where are your innovative services like AlphaFlex, AlphaCity and AlphaElectric in place now?

“AlphaFlex, our flexible mobility service, is live in the Netherlands and Belgium. Our corporate CarSharing solution AlphaCity is available in nine countries: the Top 8 plus Austria. It allows companies to share valuable assets among employees on demand.

We believe in offering individual advice and support. Because each fleet is different, every AlphaCity solution starts with an in-depth analysis of a company’s mobility needs and results in a comprehensive, customised solution. The business benefits from its own fully managed CarSharing scheme, accessed and booked online, directly by the employees.

Moving forward, the customer can analyse

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BUSINESS

and optimise the fleet performance on an ongoing basis with the individual Alphabet reports. Our next step will be to offer AlphaCity for multimakes. AlphaElectric, based on consultancy, is more feasible to deploy than AlphaCity – hence it’s already present in all our 19 markets.”

How did you feel about Daimler acquiring Athlon?

“It was a logical step. I was also quite proud, as it meant they (Daimler) copied our (BMW Group) strategy. It shows that OEMs understand that the future will be driven by mobility, and that it's critical for them to offer mobility services.

Which will be your 20th market?

“We are always investigating a number of markets where we see a potential for business growth. Focus continents therefore are North America and Asia in general. But I can't tell you anything more today.”

B2B may still be your core business, but how will you deal with the newer business segments coming up?

I expect more OEMs will go for partnerships with or acquisitions of lease suppliers and mobility companies. Outside interest for ALD, LeasePlan and Arval will increase.

In the future, it will make business sense to develop different strategies for different services within a single large company.”

“B2B plus B2C looks nice on paper, but combining them will be a challenge.

Remarketing via customers and social media is also a hot topic, and a promising avenue.

But not an easy proposition either.”

QUICK QUESTIONS • If you were not a CEO, what would you be doing? As a child, I dreamt of being an archaeologist, but I quickly realised that’s quite a boring job.

• What’s your passion outside the industry? I like speed. I’m a very active skier, downhill skiing and waterskiing.

• Who would you like to meet one day? I would go for Roger Waters of Pink Floyd. I’m a fan and it would be fascinating to hear how he sees life, how Pink Floyd became what they are and how he managed the success.

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EDITORS Steven Schoefs – Chief Editor sschoefs@nexuscommunication.be Céline Gilson – Project Coordinator cgilson@nexuscommunication.be Benjamin Uyttebroeck – Journalist buyttebroeck@nexuscommunication.be Christine Germain – Editorial Manager cgermain@nexuscommunication.be

Julien Domken – International Key Account Manager jdomken@nexuscommunication.be Saskia Lannau – International Key Account Manager slannau@nexuscommunication.be Vincent Degives – Marketing Manager vdegives@nexuscommunication.be Virginie Emonts – Sales and Marketing Assistant vemonts@nexuscommunication.be CONTRIBUTORS Aline Verpoorten – Internal Sales Stijn Blanckaert, Alison Campbell, Assistant Tim Harrup, Frank Jacobs, Jonathan Manning, Dieter Quartier, André Gilbert averpoorten@nexuscommunication.be Latendorf, Fien Van Den Steen Laura Petit – Sales and Marketing Assistant EXPERT lpetit@nexuscommunication.be Edward Kulperger, Geotab ADVERTISEMENTS Pictures: ©Shutterstock, Benjamin Brolet, SEAT (2), ALD Automotive (5), Denis Erroyaux Volvo (11), BMW Group (19), Toyota Layout: Cible - www.cible.be Motor Europe (21), TomTom (23), Jaguar Land Rover (24-25), Citroën SALES & MARKETING (31), Geotab (36), Arval (39), David Baudeweyns – Sales Director Kia Motor Europe (59), Free2Move dbaudeweyns@nexuscommunication.be Lease (65), Nissan Europe SAS (68)

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