Trucks
Trucks
For many businesses, the purchase price of a battery-electric truck can still be a barrier. The good news is that there are multiple ways of bringing the cost down, potentially making electric trucks more affordable.
While the cost of electric trucks is expected to continue to decrease, the reality is that for many businesses, the price gap between them and diesel trucks is still substantial. However, it’s also important to not only focus on the purchase price.
There are other factors that affect the cost-effectiveness of an electric truck and things that businesses can do to make them financially viable.
As a first step, determine the real cost of ownership of an electric truck. One of the biggest advantages is the fuel savings and, depending on the price of diesel and electricity in your market, these cost savings alone could negate the higher purchase price. In general, the higher a truck’s milage, the more positive impact it will have on the TCO.
On top of that, while the service and maintenance costs are currently on a par with diesel trucks, in the long term they are expected to go down for electric. This is because electric drivelines consist of fewer moving parts compared to internal combustion engines, meaning less wear and tear on components.
“When you calculate the complete TCO for an electric truck, you might be surprised at how viable electric actually is as a future solution for your business,” says Johan Larsson, VP Electromobility Business Development, Volvo Trucks. “Even if it’s not cost-effective right now, the parameters that go into a TCO calculation are constantly improving for an electric truck.”
2. Are there any tax breaks or government incentives that you can use?
In many countries, governments offer incentives and subsidies to help businesses to invest in electric trucks. For example, the French government offers ecological bonuses to incentivize the purchase of electric vehicles. And the Australian government’s Future Fuels Fund has been expanded to include grants to support the electrification of long-distance and heavy vehicles.
In other countries, governments are instead penalizing fossil fuels by introducing CO2-based road tolls, such as Germany’s updated MAUT road toll system. Several other EU countries are now following suit with CO2 road tolls of their own.
“Incentives are helpful in markets at the beginning of the electrification journey, because they can help get things moving in the right direction,” says Johan. “But once the volumes are up, governments are likely to shift towards tax-based solutions that punish fossil-fuel use. Either way, these types of initiatives will contribute to making electric trucks more cost-effective compared to diesel.”
If you’re among the early adopters with an electric fleet, you’re well positioned to make the most of these new opportunities.
The transition from diesel to electric changes many of the economic elements in truck ownership, which also affects the options for financing.
An experienced financial services provider can help navigate the complexities of electric truck ownership. From traditional financing or leasing options to more flexible as-a-service models, there are multiple ways to acquire electric trucks that best fit your business. Additionally, working with a knowledgeable partner ensures that any available government incentives are integrated into your financing plan and that you receive support for charging infrastructure and the other unique needs of electric vehicles.
Learn more about Volvo Financial Services’ electromobility solutions.
Since many transportation companies and haulers have similar challenges, perhaps there are opportunities to collaborate on solutions? In some instances, competing companies have invested in charging hubs together, to share the investment costs.
For example, Dutch haulage company Millenaar & van Schaik has invested in two charging stations: one at its home depot and another at one of its project sites, while its client invested in WattHub the world’s largest fast-charging station for trucks. This enables its drivers to book guaranteed charging slots, with charging speeds of up to 250 kW, using 100% sustainably produced electricity.
Other companies have also been able to collaborate with local energy providers to secure agreements for reduced and/or fixed costs for electricity.
In many markets, having a fleet of electric trucks is a huge competitive advantage. Public tenders and large transport buyers are increasingly requesting zero-emissions transport, and this represents a huge opportunity. For example, H. van Wijk Transport began transitioning to electric trucks when it saw zero-emissions transport was increasingly in demand, and shortly afterwards successfully won a large tender with the Amsterdam city municipality.
Electric trucks can also be used in the growing number of low-emission (LEZ) and zero-emissions zones (ZEZ) being created in cities across the world. It is estimated that there will be over 500 LEZs in Europe by 2025. Meanwhile, many cities plan to ban diesel in their centers, including Stockholm, Paris, Athens, Madrid and London.
“Electric vehicles can access areas and carry out assignments that are increasingly being cut-off from conventional diesel trucks,” says Johan. “They can be used in residential areas and low-noise areas, as well as making night deliveries. If you’re among the early adopters with an electric fleet, you’re well positioned to make the most of these new opportunities.”
Learn more about electric trucks and how to best utilize them for your business:
