Your Best Bets for Upgrading Your Fleet to PEVs

Commercial plug-in electric vehicles (PEVs) can be a viable option in your vehicle fleet. They are often more expensive initially, but they can deliver considerable benefits in certain fleet applications. PEVs include both pure electric vehicles and plug-in hybrid electric vehicles, the latter having relatively small, gas-powered engines in addition to their large electric motors (Figure 1). At this point in the commercialization of PEVs, it’s all about finding the right applications, identifying and assessing value to your organization, and considering carefully what role these vehicles can play in the future of your business.

FIGURE 1: Plug-in hybrid electric vehicles have combustion engines and electric motors
A typical plug-in hybrid electric vehicle features an internal combustion engine that powers a generator and a battery, which together run the electric motor.
Diagram of the connections between combustion engine and electric motor in a plug-in hybrid electric vehicle
What Are the Benefits?

There are several reasons to consider PEVs, including reduced costs and enhanced public perception of environmental responsibility.

Reduced fuel costs. Electricity as a transportation fuel is about 75 percent less expensive than using gasoline for the same application.

Reduced maintenance costs. Electric motors have fewer moving parts than gas-powered engines, and require fewer oils and lubricants to keep them running. Thanks to regenerative braking—where the electric motor is used to directly slow the PEV—brake pads don’t need to be changed as frequently. Early reports from PEV fleet managers suggest that, on average, PEVs cost about half as much to maintain on a per-mile basis than all-gas-powered vehicles do.

Reduced carbon dioxide emissions. For businesses that participate in carbon reduction programs, PEVs can help. Numerous studies have shown that even when the charging electricity comes from a coal-fired plant, PEV passenger cars have 30 percent lower emissions than conventional, gasoline-powered passenger cars.

Increased opportunities for demonstrating corporate commitment to sustainability. Few aspects of business operation are as public as company vehicles, particularly vans or trucks that are wrapped with corporate logos. PEVs help project an image of corporate responsibility.

Increased financial incentives. There are a number of government incentives available to help reduce the relatively high up-front cost of purchasing a PEV.

Where Should You Start?

The following vehicle applications are your best bets for replacing a gas-powered vehicle with a PEV in the near term.

Regional delivery vehicles. This PEV application is currently being demonstrated by global leaders in delivery fleet management, most notably snack-food distributors like Frito-Lay and Coca-Cola. Frito-Lay employees drive the company’s all-electric delivery vans up to 100 miles before they need to pull over to be recharged. The company expects to save approximately 1 million gallons of petroleum fuel every year. At $70,000 each—without incentives—Frito-Lay’s new Smith Electric vans cost about $20,000 more than new diesel-powered delivery vehicles. While fuel savings alone could pay back the incremental investment difference in about five years, additional savings from maintenance and government incentives can help lower that to two years or less.

Warehouse forklifts. Forklifts are an established application for electric vehicles and have recently become price competitive with gas-powered units. For warehouse environments, electric forklifts offer distinct advantages in terms of improved indoor air quality and reduced energy-use requirements for ventilation. The most important factor in determining whether an electric forklift will work for your business is the duty cycle; is there enough time throughout a regular daily shift to recharge the forklift as needed? If not, the use of rapid charging equipment and/or redundant forklifts may still provide a superior alternative to gas-powered options, albeit at a higher up-front cost.

Local and regional shuttle vehicles. Whether they’re being used by employees to carpool to and from work or to drop off clients at regional destinations, shuttle cars and buses are often a great application for PEVs. With predictable daily driving patterns and plenty of downtime, both all-electric and plug-in hybrid vehicles can serve as viable alternatives to their gas-powered counterparts. With incentives, it is now possible to purchase an all-electric passenger car for between $25,000 and $30,000, a price that’s fairly competitive with that of gas-powered cars of similar size and performance.

Campus cruisers and maintenance vehicles. For businesses that own and operate multiple buildings in a campus environment, low-speed electric vehicles are a no-brainer alternative to gas-powered fleet vehicles for on-campus transport. The “golf cart”–style vehicle is one of the most popular applications for PEVs in the US today, thanks to their superior performance, simple maintenance, low-cost operation, and competitive pricing.

If you’ve identified an application for PEVs, but you still aren’t sure if they’re the best choice for your business, ask the PEV manufacturer if you can test-drive a vehicle in that application for a week or two to learn about its strengths and weaknesses. If there is a potential for a bulk order in the future, there’s a good chance the manufacturer or dealer will allow a trial run. If the short-term test is promising, consider acquiring a small number of vehicles so that you can evaluate longer-term performance under a wider range of operating conditions. Early evaluation of PEVs in these types of applications will prepare you to deploy them confidently on a broader basis if and when you can demonstrate a solid business case.

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