As electric vehicle (EV) options for work trucks and vans become more common, fleet owners are faced with a complex decision. The high initial purchase price of an EV can be daunting, but the sticker price tells only a small part of the story. To make a smart financial decision, you must look beyond the initial cost and calculate the Total Cost of Ownership (TCO), which often reveals a compelling case for going electric.

Beyond the Sticker Price: Fuel and Maintenance

The most significant savings for an EV come from fuel and maintenance. Electricity is, on a per-mile basis, significantly cheaper than gasoline or diesel. You can calculate your potential savings by comparing your current fleet’s average cost per mile for fuel with the cost of electricity in your area. The savings can be dramatic, often cutting “fuel” expenses by 50% or more. Maintenance savings are also substantial. EVs have no oil changes, spark plugs, fuel filters, or complex exhaust systems to maintain. Their brakes also last much longer thanks to regenerative braking. These reduced maintenance needs mean less money spent on parts and labor and, just as importantly, less vehicle downtime.

Factoring in Incentives, Infrastructure, and Resale Value

Government incentives can dramatically lower the upfront cost of an EV. Federal tax credits, combined with state and local rebates, can reduce the initial purchase price by thousands of dollars. You must also factor in the cost of charging infrastructure. Installing Level 2 chargers at your business location is an essential part of the TCO calculation. Finally, consider resale value. While the EV market is still evolving, some electric models are holding their value well. Your TCO calculation should compare the initial cost (minus incentives) plus the lifetime fuel and maintenance costs of both an EV and a comparable internal combustion engine vehicle to see which one is the more economical choice over a 5- to 10-year period.

Is an EV Right for Your Routes?

The final piece of the TCO puzzle is operational feasibility. An EV that can’t complete its daily route is not a good investment, no matter how much money it saves on paper. Carefully analyze the daily mileage, payload requirements, and route topography for each vehicle you are considering replacing. Ensure the EV you choose has a real-world range that comfortably exceeds your longest daily route, with a buffer for things like weather and traffic. For many local service businesses like plumbers, electricians, and delivery services, today’s electric vans and trucks are a perfect fit and a financially savvy investment.