Ryder: going electric will increase transport cost

Switching to electric trucks could increase transport costs by up to 114 per cent according to research under­taken in the USA by fleet giant Ryder System.

Faced with increased pres­sure from governmental au­thorities, American hauliers, like their British counterparts, are seeking unbiased and ac­curate advice about the costs and benefits of switching to battery-electric vehicles. In response, Ryder’s analysts produced a report: Charged Logistics: The Cost of Elec­tric Vehicle Conversion for US Commercial Fleets.

Based on representative network loads and routes from Ryder’s dedicated fleet opera­tions in today’s market, and other factors, the data shows the annual total cost to trans­port (TCT) by EV versus die­sel is estimated to increase across the board – ranging from up to five per cent for a light-duty transit van to as much as 114 per cent for a heavy-duty tractor (depending on the geographic area). And, for a mixed fleet of 25 light-medium- and heavy-duty ve­hicles, the analysis shows an increased TCT of up to 67 per cent for an all-electric fleet.

Robert Sanchez, chairman and CEO of Ryder, said: “While Ryder is actively deploying EVs and charging infrastruc­ture where it makes sense for customers today, we are not seeing significant adoption of this technology.

“For many of our custom­ers, the business case for converting to EV technology just isn’t there yet, given the limitations of the technology and lack of sufficient charg­ing infrastructure. With regu­lations continuing to evolve, we wanted to better under­stand the potential impacts to businesses and consumers if companies were required to transition to EV in today’s market.”

Ryder’s analysis was based on representative network loads and routes from its dedicated fleet operations, of more than 13,000 commer­cial vehicles and professional drivers. It factors in the cost of the vehicle, maintenance, drivers, range, payload, and diesel fuel versus electricity, while also accounting for EV charging time and equivalent delivery times. The analysis also assumes the accessibil­ity and use of the fastest ap­plicable commercial vehicle chargers – though this infra­structure network is not yet available.

First, Ryder conducted one-to-one comparisons for die­sel and EV transit vans, rigid trucks, and heavy-duty trac­tors, using cost assumptions from California, which typical­ly has the highest fuel, elec­tricity, and labour costs in the USA, and in Georgia, where costs are generally lower.

Then, the company applied the individual costs to a fleet of 25 vehicles of mixed class­es and types, and compared the cost of owning and oper­ating that fleet in California and Georgia. The fleet mix is based on the overall mix of commercial vehicles in the USA and includes 11 light-du­ty vans, four medium-duty rig­id trucks, and 10 heavy-duty tractors.

Overall, the report finds large increases in the up-front cost of electric vehicles, and these rise exponentially with vehicle size. A BE van is 71 per cent more expensive to purchase than a diesel equiv­alent, a medium-duty truck 216 per cent more expen­sive, and a heavy-duty tractor about 500 per cent!

Other costs that increase when an EV is substituted for a diesel include labour (due to ‘dead time’ spent charging and reduced payloads), and general and administrative costs, including reduced pro­ductivity.

Again, the larger the vehi­cle, the less attractive a busi­ness proposition it is. With heavy tractors, it takes almost two electrics to do the work of one diesel, and more than two drivers, compared to 1.2 drivers to utilise a diesel trac­tor. Much of this is attributa­ble to battery weight reducing payload and reduced up-time because of battery charging.

Cost savings are made on fuel and maintenance. In Cal­ifornia, fuel bills for BE vans were 71 per cent lower than diesel, medium-duty trucks saved 57 per cent on fuel and heavy-duty 52 per cent. Main­tenance cost savings were 22 per cent for vans and trucks.

In Georgia, the savings from switching to battery pow­er were less, thanks to lower fuel prices. Here the TCT for a heavy-duty tractor rises by 114 per cent!

The Californian figures are probably closer to what might be achieved in the UK, as our energy costs are more com­parable. Here the overall in­crease in cost for switching a van to electric is three per cent per annum, for a medi­um-duty truck 22 per cent, and for a heavy-duty tractor 94 per cent.

Overall, Ryder calculates that the cost of switching the American road freight industry to battery power would result in an increase of 0.5 to one per cent in consumer inflation as the costs were passed on.

Karen Jones, EVP and head of new product development for Ryder, said: “There are specific applications where EV adoption makes sense to­day, but the use cases are still limited. Yet we’re facing regu­lations aimed at accelerating broader EV adoption when the technology and infrastructure are still developing.

“Until the gap in TCT for heavier duty vehicles is nar­rowed or closed, we cannot expect many companies to make the transition; and, if required to convert in today’s market, we face more supply chain disruptions, transpor­tation cost increases, and additional inflationary pres­sure.”