The average annual cost of a medium-sized sedan is more than $11,000. Due to market conditions, the cost to operate a fleet vehicle is rising. Fuel prices are the highest they have been in the past four years.
Maintenance costs continue to rise. Increased labour costs and parts costs are also part of the fleet operation push for efficiency. Incentives to purchase and operate low or no emissions vehicles continue, but for an unknown length of time.
Choose electric vehicles now for your fleet to reduce your overall operating costs and improve your bottom line. Choose carefully, though the difference between the least expensive and most expensive electrical vehicle is nearly $10,000 per year.
Read on the learn how to reduce fleet operation costs with electric vehicles.
The Right Vehicle for the Task
Procurement of your fleet’s vehicles is a significant part of your budget. Choosing the right vehicles for the task is vital. Going green and reducing greenhouse gases are a significant concern. The record-breaking daily temperatures notwithstanding, the right vehicle for fleet use is now electric.
The best research strategy assesses all factors that impact the budget, leasing options or cost of ownership, and capital expenditures.
Avoid being brand or manufacturer specific at this stage. Focus on vehicle capabilities and performance to match your needs. Whether you’ll be buying, financing or leasing your fleet vehicles, make sure that they are appropriate for the intended use.
Your suitability determination should consider:
- Carrying capacity
Who are the people and what are the product or equipment requirements for the vehicle? For example, a small, lightweight vehicle without a traditional boot is impracticable for executive airport transfers.
What is the projected route, terrain and road condition? Is the vehicle for a stop and start delivery situation, a long motorway commute or adverse off-road terrain? Fuel type and the vehicle body are important. A large 4 x 4 SUV is probably not the most economical choice for deliveries in Adelaide; a lightweight electric shuttle doesn’t belong on M1.
Consider downsizing to use specific vehicles if your operation doesn’t need a bigger vehicle. By reducing unnecessary fleet autos, you could reap valuable fuel savings. For example, you maintain trucks or other vehicles for use on your property; you may find they rarely (if ever) leave the premises.
Fleet Operation- Insurance
If reduced accident costs is a high priority, consider smaller vehicles for on property-use only. Safe operation of these types of vehicles is under your complete control.
It’s worth considering monitoring technologies designed to enhance safety and record driver behaviour. Both vehicles on and off your property would benefit. Some electric vehicles already include advanced collision avoidance, monitoring and GPS options.
A cost-benefit analysis of driver monitoring and insurance costs should show firm evidence that there are savings. Better accident management goes hand-in-hand with return on investment and lowers costs.
Electric vehicles enjoy a discount of up to 25% on comprehensive insurance. For road-worthy vehicles like the Tesla, BMW and Nissan LEAF, there are several safety factors on the side of the fleet operator.
Insurers are sure to take note standard safety technology in many electric car models, such as the included safety features that come standard in the new Nissan LEAF. It consists of six airbags, electronic brake-force distribution, anti-lock brakes, tire pressure monitoring system and LATCH seating system for children. Regenerative braking systems require less maintenance than petrol-based automobile brakes, thus less chance of an accident due to faulty brakes.
Also, drivers of plug-in vehicles are generally considered to be more responsible than their petrol-powered counterparts.
Fleet Operation- Reduced Maintenance and Repairs
The easiest way to explain the reduced maintenance and repair costs is that the typical electrical vehicle has half the moving parts of a petrol-powered equivalent. The fewer moving parts reduce total maintenance costs.
Studies suggest total maintenance may be reduced by more than 60% compared to diesel or petrol-fueled car of similar size and use pattern.
Look to these four areas for reduced fleet operation costs:
- Spark plugs and wiring
- Engine and transmission repairs
- Brake systems
- Oil changes
Oil changes are the most common bit of maintenance necessary with conventional combustion engine vehicles. Even lawnmowers and golf carts require them! For regular fleet maintenance, if you follow a rule of every 3,000- 5000 km, the costs add up.
Costly brake system maintenance is something expected for fleet vehicles, but regenerative braking found in electric cars halves the number of expected repairs. Soft braking using the regenerative systems improves the distance per charge as well.
There are no spark plugs, carburettors or such in electric vehicles. So no maintaining those. Engine and transmission costs are also negated.
Fleet Operation- Fuel Costs
Renewable energy in the form of water, solar and wind-generated electricity incentives make electric vehicles especially desirable for short hops. Beginning in 2016, the national infrastructure for road-worthy electric vehicles began placing public charging stations.
While the fuel cost for a fleet of vehicles varies by region, the economics of electric vehicles makes sense across the board. Many good examples come from the United States, the state of California, where the highest number of plug-in cars are registered in North America.
In California, the average price of regular petrol fuel was $3.55 per gallon ($1.33/litre) in 2018 – the highest price of any of the 48 contiguous United States. Meanwhile, its residents pay just $0.16 per kilowatt-hour for electrical power. Commercial accounts spent even less per kilowatt-hour.
The car in California is of medium efficiency, 20 miles per gallon. This works out to $2,662.50 for a year of driving (15,000 miles) The same car, if an all-electric Tesla, will cost just about $240. With Brisbane’s average petrol cost of 134.5 cents per litre, a year of driving will be $5,334. The electricity cost, even at 28 cents per kWh is less than $500.
One Big Caveat
Capital outlay for electric vehicles can be considerable. The initial cost of an electric vehicle for road use in Australia can be double that of an equivalent diesel or petrol-powered car. On the other hand, special purpose vehicles like shuttle buses or tractors often have similar costs.
Data is available for fleet operators to crunch their own numbers. While it may take a decade or more to recoup the cost difference in fuel alone, add in the savings in repairs, maintenance and insurance.
Electric models are typically more expensive than petrol-burning models of comparable size and technology. However, the price gap is closing. Battery costs and hybrid technology are decreasing the difference in price and convenience.
So Why Aren’t There Many Electric Cars on the Road?
Australia is slow to adopt electric road-worthy vehicles for many reasons. One is the cost. Unlike the specialty electric vehicle market, highway electric autos in Australia are limited to only a few brands and models. All at the top end!
This is changing slowly. However, the electric highway for Australia is still a few years off. Public charging stations in the major cities are few and far between. The electric revolution is taking off in small fleet operations.
Dramatic savings comes without major capital expenditure when you replace inefficient petrol engines with electric vehicles for short hauls. No flammable petrol or diesel cans on the premises, no fumes and very little noise from your shuttle or service vehicles. No specialised charging systems necessary. Most small electrics are plug and go.
Add Electric to Your Fleet
Australia does not yet have a national zero-emission incentive program to encourage electric vehicle adoption. However, existing local and state incentives to adopt renewable energy plus the lower cost of electricity as fuel are compelling reasons to choose electric vehicles.
As you look at the use of your vehicles, electric makes sense for short distances. Hop-on and off trips are incredibly rough on petrol-fueled vehicles. Especially brakes and engines. Guess what electric vehicles don’t have?
Case by case, electric may not be the answer. For example, long haul freight over rough terrain is impractical, given the weight of the battery and distance between recharges. However, where noise and emissions are a big concern, like on a golf course or inside a building, electric wins.
Compare Vehicle Operating Costs
For road-worthy electric vehicles in the low and mid-price range, a detailed cost comparison will find capital outlay to be similar. If your fleet operation needs to bring down expenses, electric vehicles are a way to get the job done.
Choose the right vehicle for the purpose. Many activities are particularly best suited for small electric vehicles rather than their noisier, smellier, petrol engine counterparts. Electric vehicles require less maintenance because they have fewer moving parts than petrol-driven vehicles.
Want to learn more about how an electric vehicle can fit into your fleet? Keep reading this blog and ask our experts. Contact us today!