Fuel prices accelerate delivery companies' shift to EVs

Eye-watering gasoline and diesel prices are sending delivery companies into the waiting arms of the handful of vehicle-fleet managers that serve EVs.

Why it matters: Significant commercial interest in EVs will drive growth toward EV service providers.

• Startups like Inspiration Mobility and Amply Power have made serving commercial EV fleets their business, along with established players like Element, which has expanded its EV offerings.

Context: "The surge in gas prices has increased the urgency for all commercial fleets, but particularly the highest-mile applications, where the fuel price is really eating into their profitability," Inspiration Mobility CEO Josh Green tells Axios.

• Inspiration Mobility charged out of stealth in November with a $200 million commitment from ArcLight Energy Partners and a partnership with the EV rental company Revel.

Go deeper: The shift isn't total upheaval — delivery companies aren't crashing through the doors of EV fleet servicers. Rather, the shift is proceeding along two tracks, say EV providers.

• Companies that haven't taken EVs seriously are now engaging in deep conversations about making the shift or even launching pilot programs, Element Fleet vice president Avninder Buttar tells Axios.
• Meanwhile, companies that have started making the transition are now doing so with fresh urgency.
• Who's interested? "Every last-mile-delivery player," Green says, "whether it’s someone bringing you your dinner or something you ordered online from a vendor."

Between the lines: Electrification remains a relatively slow process. The vehicles remain pricey, parts are hard to find, installing charging infrastructure is expensive, and the enormous ecosystem of charging options can seem a tangled mess.

• "Across hundreds of fleets we have touched, we have yet to come across a single operator that standardizes one vehicle or even one charging product," Vic Shao, founder and CEO of Amply Power, tells Axios.
• Plus, he adds that factors like time-of-use schedules, demand charges, and the volume of utilities can spike electricity prices in a single day.

Alan Neuhauser co-authors the Axios Pro Climate Deals newsletter. Sign up now.