- A new study shows that moving from gas to electric is basically a cheat code for businesses to save money.
- Fleet costs could be reduced up to 50% by making the switch.
- The biggest winners are light commercial fleets like local delivery vans.
When you or I buy a new car, we’re probably looking at monthly payments, style, or how a particular vehicle makes us feel. But businesses? The folks in comfy office chairs crunching through spreadsheets all day are obsessing over something much less glamorous: total cost of ownership.
Automakers have been touting that EVs have a lower total cost of ownership for some time. Now, a new study from consulting firm EY and Eurelectric, a trade association for Europe’s electricity industry, makes it hard for bean counters to ignore the savings of going electric.
Photo by: EY
The study argues that switching a corporate fleet from gas to electric could cut total vehicle operating costs by as much as 50%. That’s thanks to cheaper energy costs (versus gasoline), lower maintenance requirements, and various regulatory perks that favor EVs as a whole. In fact, the report finds that companies that move from diesel to battery-electric vans can achieve cost savings between 15% and 40%.
Eurelectric’s study focuses on the European sector where corporate fleets make up around 60% of all new car sales, as well as virtually all commercial vans, buses, and trucks. Operating costs make up between 60% and 75% of the vehicle’s total cost of ownership.
The data suggests that electrifying the various fleets across Europe could cumulatively save up to $286 billion through 2030. And if certain costs—like high acquisition costs and lower residual values—are reduced further, those savings could rise even higher.
The economics of EV ownership makes a lot of sense. It’s not a political issue or preference when it comes to businesses. When it comes down to the bottom line, it’s just dollars and cents on whether to spend the extra money up front on battery-electric.
On the operations side of the business, it’s hard to ignore that electrification won’t work for every business with fleets, at least not yet. But the entire segment is getting better each day. Better, cheaper EVs with more range are coming to market and the DC fast chargers needed to power them are popping up in more locations. So while they might not work today, the future still looks pretty bright—especially if you work in the accounting department.