The Truth About Electric Vehicles: Making Dollars and Sense (2 of 3)

November 14th, 2022 | by Stacey Papp, Director, Content | Posted in: Insight on Things

Faced with ongoing supply chain challenges, material shortages and geo-political turmoil, fleet-based businesses are also tasked with finding more environmentally friendly and cost-effective ways to service the growing global marketplace.

But there is great news—while electric vehicles (EVs) require an initial investment, they can be a valuable component to running a profitable fleet long-term. Here’s what you need to know about the cost of adding EVs to your fleet, and the benefits you can realize when it comes to profitability, efficiency and savings.

What does it cost to add an EV to your fleet lineup?

Adding new vehicles to your fleet always presents a significant financial investment. Fleet owners may see the price tag of the latest EVs and be concerned that they won’t see ROI from moving toward a hybrid or fully electric fleet model. But while EVs often cost more, many cities, states, and countries are finding ways to incentivize electric vehicle ownership, and the cost of the entire lifecycle of an EV is probably less than you think.

While the starting average price point for an EV is around $10,000 more than a gas-powered vehicle, the federal EV tax credit is currently up to $7,500 for new passenger cars or smaller commercial vehicles in the US. Many states offer their own tax incentives too—and tax credits for bigger commercial trucks can be up to $40,000.1

An electric vehicle costs significantly less over its full lifetime than an internal combustion engine (ICE) vehicle,2and because EVs are able to service more customers over a longer period of time, the reduction of fuel and service cost can be passed down to end consumers.

Are EVs expensive to maintain?

According to Consumer Reports, owners pay half as much to repair and maintain electric vehicles compared to a gas-powered car. EVs have fewer parts to service or replace, as they don’t need oxygen sensors, spark plugs, motor oil, or timing belts.

It’s estimated that scheduled maintenance for fully electric vehicles costs about 40% less than for gas-powered cars,3 which means consumers who own an EV can expect to save an average of $4,600 in repair and maintenance costs over the life of the vehicle.4 This also makes EVs more sustainable, as their lifecycle can be much longer than ICE vehicles due to fewer parts needing to be replaced over time.

Is charging EVs difficult or costly? Are there enough charging stations in place?

The lower pricing of electricity makes EVs more cost-efficient to operate than gas-powered vehicles. Mile for mile, it costs less than half as much to operate an EV than an ICE vehicle. EV owners, on average, spend 60% less on fuel compared to internal combustion engine vehicles.5 The adoption of electric vehicles and fuel cell vehicles avoided almost 1.5 million barrels of oil per day in 2021 alone—about 3.3% of total demand.6

Fleets may also be concerned that they won’t be able to charge vehicles as easily as filling up a tank with gas. However, this infrastructure need is being addressed on a global scale. Many government agencies, utilities, and companies are constantly expanding the network of charging stations. The U.S. currently has around 47,000 charging stations for plug-in EVs, and more are coming—the White House recently announced its goal of building a national network of 500,000 EV chargers along highways and in communities by 2030.7

Is it time for your fleet to make EVs a reality?

It is much more affordable to build an EV or hybrid fleet than many businesses realize. EVs are not only beneficial to the environment but also provide long-term financial benefits to customers and businesses.

And, in order to get the most out of the investment, vehicle utilization must be a core focus. Fleets can keep the transition to EVs smooth by digitizing vehicle access and automating tasks coming from all fleet vehicle data.

“With EVs, it’s incredibly important to increase vehicle utilization so the vehicle is being used by multiple people and multiple shifts”, says Aarjav Trivedi, Ridecell Founder and CEO. “Being sustainable requires fleet managers to use EVs at a higher volume as well as the data being collected from those vehicles, which is more than a traditional fuel-based vehicle. Fleet automation can help to automate decisions, such as charging locations and times, so the overall operation of these vehicles is much easier across makes and models, leading to smoother adoption”.

Keep an eye on our blog for part three of our EV series as we will be taking a deeper dive into some of the latest EV trends.

Stacey Papp, Director, Content, Ridecell

6 Bloomberg NEF-Zero-Emission Vehicle Progress Dashboard, May 2022

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