THE COST OF EV OWNERSHIP

Alternative Fuel Vehicles Offer Fleet Operators Lower Total Cost of Ownership, Hedge against Future Fuel Price Shocks

April 17, 2012 (Pike Research)

“Many fleet managers in North America and Europe are facing increasing pressures to “green” their fleet operations…[and] budgetary pressures are driving fleet operators to look at new ways to reduce costs, including by cutting fuel consumption and maintenance. One way to achieve these goals is by switching from conventional gasoline or diesel vehicles to alternative fuels and propulsion systems…

“Fleet operators have a wide range of alternative vehicle options…including battery electric, hybrid electric, plug-in hybrid, fuel cell, compressed natural gas (CNG), and other models, all of which offer different emissions, operational, and cost characteristics. While these alternative fuel vehicles carry an up-front cost premium (and can require additional infrastructure investments), the total cost of ownership (TCO) over the lifetime of the vehicle can be lower than conventional internal combustion engine vehicles.”

click to enlarge

“According to a new report from Pike Research, the lowest alternative fuel option for fleet operators in the United States is the battery electric vehicle [BEV], assuming that the operator is able to claim the $7,500 federal tax credit…[BEVs] will have a lower TCO over a vehicle lifespan of 120,000 miles, but not at mileage levels that are well under that..With $3.50 per-gallon gasoline, alternative fuel vehicles will provide payback in fleets that do a lot of driving. As gas prices continue to rise over $4, the equation will tilt further toward options like hybrids and plug-ins…

“Pike Research’s TCO analysis also reveals the benefits of moving to a smaller vehicle, no matter the fuel type. The lowest TCO vehicles are the compact options, whether hybrid, gasoline, or compressed natural gas (CNG). The compact BEV and hybrid electric vehicle (HEV) models have lower TCOs than the small gasoline model, while the plug-in hybrid, mid-size HEV, diesel and CNG all have lower TCO than the mid-sized gasoline sedan. By comparison, flex-fuel and stop-start vehicles are unlikely to pay off their higher sticker prices…”