The industry faces what the North American Council for Freight Efficiency (NACFE) calls the “messy middle,” where fleets must weigh immediate operational realities against long-term sustainability goals.
Today, the transition to cleaner fleets isn’t a straight road; it’s a labyrinth of competing technologies, shifting economics, and operational growing pains. And it doesn’t seem on the right track to get much easier anytime soon.
Having spent my early profession optimizing fuel economy at Navistar (now International), where squeezing out an additional mile per gallon promised significant savings for our large fleet customers, I can appreciate firsthand how today’s electrification debate echoes past efficiency battles, but with rather more drastic impacts.
The industry faces what the North American Council for Freight Efficiency (NACFE) calls the “messy middle,” where fleets must weigh immediate operational realities against long-term sustainability goals.
Here’s learn how to navigate this complex landscape while keeping options open.
The Messy Middle: More Than Just Batteries vs. Diesel
The messy middle isn’t only a selection regarding battery electric vehicles (BEVs). It’s a transitional phase where multiple powertrains compete for relevance, each with unique tradeoffs.
Hybrids (HEVs/PHEVs/HREVs)
Hybrids offer 10-20% fuel savings over conventional powertrains, with minimal infrastructure changes. For fleets running urban routes with frequent stops (e.g., delivery vans), regenerative braking and predictable charging downtime can nearly eliminate fuel costs today.
Nonetheless, because of their smaller batteries, hybrids still depend on combustion engines, exposing fleets to volatile fuel prices while delaying pushing aside dreams of zero emissions.
Compressed Natural Gas (CNG)
CNG provides 15-30% lower emissions than diesel and has stable fuel costs in gas-rich regions. Waste management fleets like Republic Services have adopted CNG successfully. Nonetheless, limited refueling infrastructure and methane leakage concerns create long-term uncertainty.
Hydrogen Fuel Cell Electric Vehicles (FCEVs)
FCEVs mix EV efficiency with rapid refueling, which is right for long-haul routes. Recent bankruptcies of burgeoning OEMs, hydrogen’s $16/kg production cost today, and sparse infrastructure make this a purely “future play” for many fleets.
Sustainable/Renewable fuels
Some engine builders like ClearFlame are designing them to be compatible with low-emission fuels with advanced waste-heat recovery and emissions tech, which continues to dominate fleet powertrain portfolios.
They’re reliable, familiar, and a mandatory step, but efficiency gains have limited potential because of inherence losses of combustion engines.
Common Powertrain Tradeoffs for Fleets to Consider
| Powertrain | Upfront Cost | Fuel Savings Potential | Infrastructure Needs | Best for… |
|---|---|---|---|---|
| Diesel/Gas | Baseline | Baseline | Baseline | Edge case fleet operations not yet addressed by newer technology |
| BEV | Low – High | 40-50% | Moderate | Light/medium-duty urban applications with access to low-cost electricity |
| Hybrid | Moderate | 10-20% | Low | Emissions reduction without range anxiety |
| CNG/LNG | Moderate | 20-30% | High | Existing natural gas infrastructure |
| FCEV | High | 30-40% | High | Heavy-duty long haul when hydrogen falls below $7/kg |
| Renewable fuels | Low – Moderate | Varies | Moderate | Meeting emissions goals |
The Strategic Imperative for Fleet Managers
Fleet managers must balance short-term priorities like safety, driver retention, and asset management with long-term planning for electrification. Listed below are three potential strategies for navigating this transition:
1. Wait-and-See Approach
Some fleets may delay motion until total cost of ownership (TCO) parity is undeniable and infrastructure is fully developed. While this minimizes immediate risks, it also leaves fleets vulnerable to being outpaced by competitors who adopt earlier. For models like Ford’s EV Pro van, the MSRP already matches its gas equivalent, in order that time is now.
2. Proactive Transition
Forward-thinking fleets are strategically advancing towards electrification and integrating more efficient powertrains. This approach includes piloting electric vehicles (EVs) in applications where they’re most viable, comparable to ride-hailing and drayage. These initiatives are complemented by leveraging incentives, rebates, and modern financing options to scale back capital expenditures.
By developing expertise at this stage, these fleets are positioning themselves as industry leaders for when the technologies fully mature.
3. Status Quo Preservation
As a rule, smaller fleets and people with limited resources opt to persist with what they know, hoping to squeeze out probably the most they’ll from the more conventional technology. While this approach may provide short-term stability, it risks leaving these fleets unprepared because the disruptions compound (e.g., connectivity integrations, upskilling needs, ecosystem partnerships). In consequence, they postpone coping with the training curve (read also as growing pains) of adopting the newer technology.
Why Early Motion Matters
Electrification isn’t a passing trend to be ignored or indefinitely postponed. Larger fleets with sufficient resources are attempting to iterate and work out how best to capture all of the potential advantages.
In spite of everything, no other technology can match the pace at which battery prices have fallen — they’ve seen an 89% decrease since 2010, in line with BloombergNEF. Smaller players who delay risk being outpriced or acquired as market leaders gain much more market share.
Furthermore, electrification offers greater than just cost savings — it enhances operational efficiency, improves driver satisfaction, and stays ahead of zig-zagging regulatory demands for reduced emissions in transportation. Waiting too long to act could mean missing out on these advantages after which struggling to catch up after earlier adopters have baked of their lessons learned.
But none of this is simple. Unpredictable energy markets, characterised by shifting tariffs and fluctuating prices, introduce significant complexity and pose a risk to cost savings.
In 2023, diesel prices exhibited a variation of 40%, while electricity rates ranged from $0.08/kWh in Texas to $0.28/kWh in California. These discrepancies present challenges in maximizing asset value because of unpredictable costs, significantly impacting fleet managers’ financial planning.
A Path Through the Chaos
- Start with electrification feasibility: Use tools like Brightmerge’s calculator to assist model different scenarios. Electrification isn’t universally viable today. For instance, a California-based maintenance technician coping with unpredictable day by day schedules of their heavily upfitted work truck might find BEVs impractical until reliable 5-min charging from 20-80% is ubiquitous. But even when BEVs aren’t workable now, you’ll baseline your infrastructure needs and financial tradeoffs.
- Bridge with other cost-saving powertrains: Leverage transitional technology buys time while batteries improve. Years ago, Waste Management reduced diesel use by 80% with CNG, cutting costs without stranded assets. The identical industry is taking steps towards EVs as battery costs improve.
- Construct strategic partnerships: Identifying the proper partners early on is crucial for fleet managers to make certain they don’t tackle an excessive amount of without delay. Firms like MN8 have already got charging infrastructure accessible to fleets, while others like Merchant’s Fleet provide access to vehicles — each helping to scale back capital spend while allowing fleets to ramp up the newer technology.
Planning for Tomorrow Starts With Realism Today
The messy middle demands pragmatism, not dogma. This phase is critical for shaping the longer term of moving people and goods, but the present tariff mayhem reminds us that external aspects can disrupt even the best-laid plans. Success would require balancing immediate priorities with long-term vision, taking steps today to position your fleet for tomorrow’s realities.
While other powertrains may fit the bill higher now, electrification’s trajectory makes it a everlasting fixture for the long run. Fleets that skip the feasibility evaluation risk playing catch-up in a winner-takes-all market.
As I learned optimizing those six mpg engines at Navistar, the largest cost isn’t adopting early. It’s not considering your options.
Concerning the Creator: Laolu Adeola is the owner of Leke Services. He’s a management consultant and enterprise investor with 15 years of experience in mobility technology across automotive, energy storage, charging infrastructure, aerospace, batteries, manufacturing, and more. He helps fleet managers navigate the mobility energy transition.
This text was authored and edited in line with Automotive Fleet’s editorial standards and magnificence. Opinions expressed may not reflect that of Automotive Fleet.
This Article First Appeared At www.automotive-fleet.com
