Purchase price alone makes electric vehicles look expensive. Total cost of ownership (TCO) looks at every cost over a vehicle's working life, and that is where electric fleets often come out ahead, especially for vehicles that drive a lot.
What goes into TCO
- Purchase or lease cost, minus any subsidies or incentives.
- Energy: diesel versus electricity per kilometre.
- Maintenance: electric drivetrains have far fewer moving parts and no oil changes.
- Charging infrastructure: depot chargers and any grid upgrade.
- Insurance, taxes and registration.
- Financing costs.
- Resale or residual value at the end of the vehicle's life.
Where electric saves
Energy is usually the biggest saving. Electricity per kilometre typically costs well below diesel, and more so with off-peak depot charging. Maintenance savings add up over years of brakes, filters and engine servicing that electric vehicles largely avoid.
Where electric costs more
Vehicle purchase price is higher today, and chargers and grid connections are an upfront investment. Battery life and residual values are still becoming clearer as the market matures.
Kilometres decide the answer
The more a vehicle drives, the faster running-cost savings pay back the higher purchase price. High-use vehicles such as delivery vans, cabs and buses usually reach break-even sooner than lightly used ones.
How to calculate your own TCO
- Pick a period, such as 5 or 8 years.
- Estimate yearly kilometres per vehicle.
- Calculate energy cost per km for diesel and for electricity at your tariff.
- Add maintenance, insurance and financing for each option.
- Add your share of charging infrastructure for the electric option.
- Subtract expected resale value and incentives.
- Compare the totals, and the cost per kilometre.
Reduce the infrastructure cost
Charging-as-a-service and managed models can remove the upfront charger investment, turning it into a predictable monthly cost. Shared public charging can cover vehicles that don't return to the depot.
EVee Buddy can model charging costs for your routes and help you build a TCO comparison with your own figures.