There are a lot of reasons why a commercial fleet owner should collect data from their vehicle fleet. Making the fleet more efficient, safer, more secure, producing less CO2, lowering maintenance costs – all of those are well-known in the industry for decades – and every fleet management provider will be happy to tell you all about them. No reason to go into detail for all of them here, after all this is not a promo for fleet management systems. Many of you know I have been working in this space for pretty much all of my professional life (more than 17 years now) – and I have been wondering lately if the industry should add one more reason to this list – which is: monitoring the battery-health of your electric vehicle. This article is exploring if procuring, installing and paying the subscription-fees for an aftermarket telematics unit is worth it – for the sole reason to monitor and improve your battery health.
Disclaimer
Before we go into detail here – let me start with a big disclaimer. I will be juggling with a lot of numbers in this article – and for very few of them, industry-benchmarks backed up by real studies are available. Nevertheless – I will be using numbers that I feel are making sense. Your numbers will be different, though – so the value of this article is not so much in the exact numbers or business case – but instead in the factors that I think should be influencing a decision like this – as well as the approach I am taking towards making this decision. You have been warned 😉.
The Costs We Are Working With
Let’s start with what this actually costs – taking the US-market as an example. Based on current market rates, you’re looking at the following costs per vehicle (roughly and on average):
- Hardware: $400 for a good Telematics Control Unit that is actually capable to monitor battery health
- Installation: $175
- Monthly subscription: $20
- Five-year total: approximately $1.775
For a 100-vehicle fleet, that’s $177.500 over five years. Not insignificant for sure. The question is whether battery health monitoring alone justifies those costs.
Quantifying the Value of Battery Health Management
If you thought the math so far was rough around the edges – it only gets worse from here on 😉, as it depends on multiple factors and little study material is available to back it up. So bear with me as I try to make a case here:
Residual Value Impact According to data from Autovista Group / Schwacke, vehicles with documented battery health certificates achieve roughly €450 ($500) better residual values for compact EVs. For our fleet of 100 vehicles, maintaining detailed battery health records translates to approximately $50.000 in improved residual value. The key word here is “documented” – buyer confidence in battery health directly correlates with price. The reason for this increase is easy to see and also explained in the article: a large part of the value of the vehicle is in the battery (30-50% – depending on vehicle and age). Buyers of used EV’s often have concerns about the battery – and addressing those concerns with real data about battery health does translate into higher resale values.
Warranty Claim Success Rates This is where fleet data becomes powerful. Individual owners struggle with warranty claims because they lack comprehensive data. Fleet operators with telematics data successfully claim warranty coverage at significantly higher rates – simply because they have actual data to backup their claims. How much this is actually helping? Really hard to judge – and I did not find any research that gives real numbers here. So I can only make a conservative estimate for our fleet of 100 vehicles. Let’s say 10 of them have some kind of a battery problem in the 5 years that they are being used. For 9 out of those 10, the manufacturer honors the warranty without problems – but 1 of them remains disputed. Having data to backup a claim leads to the fleet owner avoiding having to pay for the battery replacement – saving let’s say $15.000 for this case for a battery replacement. Is this a realistic assumption? Make up your own mind with your own data – how many warranty-claims do you have with your manufacturers – and how many of those are you winning? Then you know if the number I have come up with here is too high or too low.
Operational Optimization Here’s where fleet scale becomes interesting. With 10+ vehicles, you start seeing patterns, with 100+ even more so:
- Which routes cause accelerated degradation
- Which driving behaviors impact battery life
- Which charging strategies optimize longevity
Also here, it is hard if not impossible to find numbers to back this up – so I also have to rely on rough estimates. If you are paying attention to those factors and start optimizing your fleet operation, e.g. by making sure to switch vehicles between routes, coaching your drivers or avoiding patterns that hurt your battery health (such as leaving vehicles in the depot fully charged to 100% over the weekend – during summer-time with hot temperatures), I believe a 10% improvement in battery health over a period of 5 years is not too much to ask. If we are conservative again and estimate that the value of the vehicle deprecates by 70% over those 5 years of heavy use – and that the battery is worth 50% of the residual value – this would give us a battery value of $35.000 * 30% residual value * 50% battery value = $5.250. Improving that by 10% using the battery health data gives us a further $525 gain per vehicle.
Predictive Maintenance Value Early detection of battery degradation patterns allows for planned rather than reactive maintenance. Your fleet can only earn money when it is actually on the road. If we are using conservative numbers again, this translates to maybe $600 per vehicle over this 5 year period in avoided emergency repairs and optimized service scheduling. Luckily – current batteries break way less often than people fear 😉, therefore this number is relatively small per vehicle – but of course, for a 100 vehicle fleet, some incidents will have to be factored in. Also here, those numbers are rough estimates – maybe very different from your case, you have to judge that.
The ROI Calculation
Let’s add this all up. For a 100-vehicle fleet of $35.000 EVs over 5 years:
Investment:
- Hardware: $40.000
- Installation: $17.500
- Monthly subscription: $2.000 – comes down to $120.000 for the whole 5 year period
- Total cost: $177.500
Returns:
- Residual value improvement: $50.000
- Warranty claim success rate improvement: $15.000
- Operational optimization: $52.500
- Predictive Maintenance value: $60.000
- Total returns: $177.500
Not so Great – Is It?
So the return is equal to the costs for my calculation. However, as you have probably noticed – I have tried to be extremely conservative in my calculations. If you have a fleet of 100 vehicles and talk to a fleet management service provider or battery health service provider – I would be very surprised if you don’t manage to come out with less costs than the mentioned ones to equip your fleet. Talk to two or more providers, compare offers, negotiate well, ask for volume discounts – and prices will drop significantly from the ones I have used. Also prices in your geography might be significantly lower in the first place.
Another factor to keep in mind is the vehicle costs. I have once again conservatively calculated with $35K – but for most commercial fleet operators, the costs per vehicle will be higher and if we are talking about trucks – a lot higher. An electric truck can cost more than $250K – and still be worth getting due to the lower operational costs. The costs stay the same for a case like this – yet the value goes up a lot along with the vehicle and battery value.
Also things like usage patterns can improve the ROI significantly. If you drive a lot and therefore consume your battery cycles faster – or if you are operating in high temperatures putting additional stress on the battery – can all make the return-factors more likely and more valuable.
So all in all – I believe the costs you will be paying will be less than my estimates (probably way less) – and the value will be higher. But as mentioned at the top of the article – please make up your own mind using your own numbers, by all means!
My Assessment
After running these numbers and considering the operational realities, I believe battery health monitoring alone justifies aftermarket telematics investment for most commercial fleets. The ROI is positive even in conservative scenarios, and the risk mitigation value is substantial.
The caveat: this assumes you’re actually using the data. Installing monitoring without operational changes is expensive theater. The fleets seeing these returns are those that integrate battery health into their operational decision-making – from driver training to route planning to replacement scheduling.
And if you already have a fleet management system installed in order to benefit from all the other operational benefits I have mentioned at the start of this article – and have therefore already paid all the costs I have listed above – why not check in with your provider to have a conversation about battery health? I know this is what I would do.
