High diesel prices ‘strengthen case for electrification’
Chris Welch, CEO of Welch Group
Haulier and electric vehicle advocate Welch Group has projected significant long-term savings for its fleet in the context of soaring diesel prices, which it says reinforce the case for switching to electric HGVs.
The transport operator, along with fellow supporters of electrification, has suggested that with the latest surge in diesel pump prices, substantial savings could be generated using electric trucks and shared charging infrastructure.
Welch Group runs both diesel and electric HGVs, and has developed its own financial model which examines the economics of electrification and shared depot charging.
Its internal modelling projects potential annual savings against a diesel-fleet comparison of £792,000 by 2035, as its electric fleet expands and charging infrastructure is shared with other operators. The figure is a projected operating cost comparison, says the firm, and not an achieved saving or a complete vehicle lifetime cost assessment.
The company cites analysis from transport research group New AutoMotive, estimating that the diesel price surge since July is adding around £35 million a week to UK hauliers’ fuel bills.
“Diesel prices are proving that our decision to go electric was the right one,” said Welch Group CEO Chris Welch.
“We’re already seeing substantial savings on energy costs compared with diesel, and every increase at the pump makes the economics of electrification more compelling.
“But the opportunity goes much further. By opening our charging hubs to other operators, we can spread the cost of infrastructure and make our own electric trucks progressively cheaper to run. Our internal modelling suggests the savings could become increasingly significant as our fleet and charging network grow.
“This is about running a more efficient and competitive haulage business. Cutting emissions matters, but so does protecting our margins. The more electric trucks we put on the road, the greater the opportunity to do both.”
Assuming its planned fleet expansion and shared charging activities materialise, the internal model projects that the all-in cost of charging its own electric trucks could fall from around 42 pence per kWh in 2026, to 9.1p per kWh by 2035.
Its estimates include electricity and allocated infrastructure costs, and are sensitive to future energy prices, charging demand and utilisation.
The firm cautions that its figures are its own forward-looking estimates, and not independently verified, nor forecasts for the wider haulage industry. But it says they illustrate the potential for shared charging infrastructure to become a commercial asset for hauliers, rather than merely an operating cost.
Simon Smith, CEO of electric HGV charging specialist Voltempo, added: “Diesel at these prices changes the commercial conversation around electric trucks. For years, operators have been told that electrification means choosing between doing the right thing and making money. That choice is disappearing for a growing number of operations.
“Electric trucks, intelligent depot charging and competitively priced energy can give hauliers greater control over one of their biggest operating costs. Shared charging offers another opportunity to strengthen the economics by making better use of infrastructure.
“The opportunity isn’t simply to replace diesel trucks with electric ones. It’s to build a more efficient, resilient and potentially more profitable haulage business.”
Ben Nelmes, CEO of New AutoMotive, said: “Hauliers are paying tens of millions of pounds more every week for diesel, and almost every new truck sold in Britain still depends on it.
“Electric trucks offer a way out of that exposure, but operators and manufacturers cannot plan around a policy that does not yet exist. The government asked the industry for its views at the start of the year. It now needs to get on and decide, so that fleets can invest with confidence.”
The message was amplified by Wen Han, the founder and CEO of the Chinese electric HGV manufacturer Windrose.
“The structural economics of electricity versus diesel are increasingly making electric trucks the clear choice for operators,” he said.
“We have seen a huge increase in orders as diesel prices have risen, and the change in customer behaviour is striking. Operators are not only ordering more trucks, they are increasingly prepared to pay for them before they even arrive on site.
“This is no longer simply about fleets wanting to decarbonise. It is about economics, energy security and protecting operators from volatile diesel costs.
“We see the UK as an important market for that transition. Windrose is actively looking for a suitable site.”
The expected influx of competitively priced Chinese-manufactured electric trucks into Europe, as evidenced by the array of truck makers displaying their models at IAA Transportation in Hannover last month, is likely to further strengthen the economic argument for fleet operators considering whether to make the switch.
