This article originally appeared in the “Wheels Mobility Guide,” a feature of the April 2019 edition of Automotive Fleet magazine.
Every automaker has announced that they are making huge investments in new hybrids, plug-in electric hybrid vehicles (PHEV) or all-electric vehicles (EV). This trend is driven by sustainability and regulation, particularly in overseas markets, but is also predicted to power autonomous and ride-sharing capabilities. However, current U.S. adoption of EVs is very low. There are only a few electrified models currently on the market and availability, as well as infrastructure, is limited. Demand is expected to increase over the next five years; in fact over 100 new electrified models are expected to be introduced through Model Year 2022. Many of these new models will be high-end or luxury vehicles, however; we do expect some new fleet-friendly models as well.
But even with new fleet-friendly options on the horizon, the cost of EVs hasn’t been as friendly to fleet. Currently, costs are high and the Total Cost of Ownership (TCO) has been difficult to quantify, for several reasons:
Pinpointing electricity costs
Tracking the cost and use of electricity can be difficult. Drivers may be charging their vehicles at home, at the office, and on the road. The cost of electricity at different charging stations may vary dramatically – think about regional and peak-hour variances. It’s also more difficult to determine if the energy used is spent on work vs. personal use.
Higher upfront cost
This cost is only partially offset by lower energy and maintenance costs and higher resale values.
Low gas prices and efficient engines
Internal combustion engines are more efficient than ever and gas prices are predicted to stay low, both reducing the overall benefit of using electric instead of gas for energy.
Questionable maintenance savings
Maintenance costs on EVs are generally lower than on combustion engines. The regenerative braking systems are easier on the brake pads and tires, and oil changes may not be required or greatly extended. However, the savings may not be substantial on a three- to four-year lease.