This is a guest blog written by Sophia Schuster, Policy Principal at Michigan EIBC. This article is featured on our collaborative fleet resource, the Clean Fleets Hub.
Managed charging (also commonly referred to as smart charging or coordinated charging), however, allows fleet operators or a utility to strategically control when, how much, and at what power level an EV (or an entire fleet) is charged without sacrificing the fleet’s schedule demands. In practice, managed charging uses software, telematics, and networked EV charging (i.e. smart chargers connected to a platform via the internet to allow remote management) to shift charging into lower-cost periods where electricity demand is low (off-peak), to throttle or delay charging during high grid‐demand periods, or to coordinate charger loads such that the facility’s electrical service isn’t overloaded. Managed charging can also allow utilities to right-size infrastructure upgrades to lower customer make-ready costs.
As commercial and public fleets increasingly transition to battery electric vehicles (EVs), one of the most critical elements for efficient and cost-effective operations is the strategy used to charge those vehicles. Depending on the number, type, and duty cycle of vehicles in a fleet, fleet electrification and determining the appropriate charging schedule can be complex. Managed charging can help fleet operators address these concerns and ensure that they are optimizing electricity consumption to reduce costs. This article explains what managed charging is, outlines the benefits it brings for fleet owners and utilities, and provides real-world examples of how fleets across the United States have saved money by implementing it.
What is Managed Charging?
Irrespective of a customer’s electricity rate and local grid capacity, unmanaged charging – plugging in and drawing electricity at the vehicle’s maximum charging rate as quickly as possible – can result in:
- Higher energy costs due to charging during hours where electricity demand is high (on-peak);
- Steep demand charges, especially if multiple vehicles are charging simultaneously; and
- Inefficient infrastructure (e.g. transformers, wiring, electrical panel) investments due to large and unpredictable peak loads.
Generally, managed charging can be classified as passive or active. Put simply, passive managed charging allows the customer to preset charging times. If a fleet operator is enrolled in their local utility’s time-of-use (TOU) tariff, they can set charging times to align with the lowest TOU rates while ensuring that their vehicles are ready for operation when they are needed. This provides the customer with more control over charging times.
Active managed charging allows another entity, often an electric utility or an implementing third-party, to directly control the customer’s EV load to provide a number of benefits, including reducing grid constraints, enabling increased use of renewable energy, and providing customers with even greater cost savings. Under these conditions, the fleet operator still communicates its needs (e.g., the required state of charge at the start of the next business day, or how many vehicles it will need by a given time), and charging automatically adjusts based on current grid conditions or to optimize customer costs. If the utility acts as the charging manager, in most cases, fleet operators can often opt out of participating in a managed charging event if it does not suit their current needs.
What are the benefits?
Given the flexibility of EV charging load, managed charging can help utilities reduce grid constraints and avoid unnecessary grid infrastructure upgrades. One study estimates that each vehicle whose charging is actively managed results in $575 in avoided costs for utilities. It is estimated that these savings could result in a 10% reduction to all ratepayers’ electric bills by 2035. Fleet owners also stand to greatly benefit by implementing managed charging, including with:
- Lower electricity costs – By steering charging sessions to off‑peak hours or times of lower rates, fleets reduce the cost per kWh. For example, one study found that switching to smart charging could reduce average electricity bills by 30‑50% annually.
- Lower demand (peak) charges – Many commercial electricity rates include demand charges, which are based on the maximum amount of electricity drawn within a given time period. Managed charging spreads electricity use over time, thus reducing these charges.
- Defer infrastructure upgrades – By reducing peak load on the site and local grid, fleets may defer transformer, service panel, or interconnection upgrades.
- Operational assurance – Managed charging systems can be configured to always guarantee vehicles are ready for duty while optimizing charging; this means uptime is preserved while cost savings are captured.
- Lower the total cost of ownership – As fleets scale EV adoption, disciplined charging and energy management become key to controlling the total cost of ownership. Managed charging also supports the integration of other on‑site generation (e.g., solar and batteries), which can further reduce charging costs.
Case Studies Prove the Benefits
In the U.S., Southern Company and Ford Pro ran a six‑month pilot involving more than 200 trucks and 150+ Level 2 chargers. The pilot demonstrated managed charging in action. During demand response tests, the fleet reduced charging demand by about 0.5 MW (500 kW) in a 30‑minute event (i.e., approximately 10 kW per charger) to avoid peak grid demand windows. The pilot demonstrated that meaningful cost reduction (30% in the pilot) can be achieved via managed charging.
This aligns with a CALSTART analysis of a hypothetical heavy-duty EV fleet in which managed charging reduced the cost of electricity per mile from $0.44 to $0.29. Overall, this resulted in 37% lower electricity costs compared to the unmanaged scenario.
While the positive impact of managed charging is still being studied, fleet operators can take advantage of the benefits it has to offer today! Reach out to your local utility about the managed charging programs it has available for commercial customers.
Key considerations & best practices
If you are a fleet operator—or a utility working with fleets—there are several recommendations to ensure a successful managed charging implementation strategy:
- Understand your fleet’s duty cycle and charging window – To do this, you will need data including when vehicles return, how long they dwell, how much energy they need, and by what time they must depart. Charging scheduling can only work if vehicle readiness is guaranteed.
- Use intelligent software/communication capable chargers – Managed charging requires chargers that can communicate, be controlled or throttled, and respond to grid/fleet/vehicle data.
- Align with electricity rates, demand charge structure, and grid signals – Understanding the utility rate structure (time‑of‑use, peak demand charges) and possible demand response programs/incentives is critical.
- Avoid costly infrastructure constraints – Often, the depot’s electrical service or transformer may be sized based on unmanaged peak loads. Managed charging helps flatten demand and may allow you to avoid or defer upgrades.
- Prioritize fleet readiness and resilience – If managed charging compromises readiness (e.g., vehicles not fully charged when needed), the savings may not justify the risk. Good managed charging systems always prioritize readiness first, cost optimization second.
- Collaborate with the utility/energy provider – Utilities have a full understanding of local capacity and expected energization timelines. Additionally, utilities often have rebate programs and demand response or flexible-load programs that they can share with fleet operators. As such, collaboration between the charging site host and the local electric utility is paramount.
- Start early and scale intelligently – Managed charging should be integrated into fleet electrification planning from the beginning, before uncoordinated charging becomes costly.