Electric Vehicle Economics Cost Saving Strategies for EV Owners

Economics Of Going Electric: Cost Saving & ROI In Commercial EV Adoption

By Kalyan C Korimerla

The transportation industry has witnessed a global shift towards electric vehicles, prompting a focus on sustainability and cost savings. As such, various verticals such as Logistics, E-commerce, Agri-logistics, Waste Management, and others are transitioning towards electrifying their fleets to enhance their economic gains. Commercial EV deployments have yielded substantial data-based evidence, demonstrating the significant cost savings and return on investments in EVs.

Businesses have recognised the superior Total Cost of Ownership (TCO) as a significant advantage for EV adoption. With rising fuel costs, electric three-wheelers have become more appealing, offering potential savings of up to 70 per cent on operational costs. Early adopters initially favoured Electric Vehicles for their environmental benefits, but most fleet operators now prefer them for their superior economics.

The superior economics of EVs are compelling fleet operators towards electric vehicles over traditional internal combustion engine (ICE) vehicles. The three-wheeler electric vehicles have overcome the cost barriers, and the emerging total cost of ownership (TCO) advantage of four-wheeler LCVs and electric trucks is rapidly driving the electrification of cargo fleets in India.

EV operators are realising substantial TCO benefits, which have become particularly prominent due to the skyrocketing fuel costs. By leveraging EVs, they can save significantly on fuel expenses and vehicle maintenance costs, while also enjoying enhanced residual value. Furthermore, the intelligent features of EV technology enable operators to optimise their load and route planning, further enhancing their bottom line.

Moreover, the Indian Government has outlined a transparent federal plan to reduce the logistics costs in the country and improve competitiveness as a globally recognised manufacturing hub. The transportation cost constitutes a large portion of these logistics costs, which have led to a growing disparity in TCO between ICE vehicles and EVs. Customers are now transitioning towards electric LCVs and trucks for last-mile logistics, and are demanding EV fleet deployments for first-mile and mid-mile transportation requirements.

The adoption of commercial EVs also reduces maintenance costs, as these vehicles have fewer moving parts than traditional vehicles, a longer lifespan, and features such as regenerative braking systems that help cut down brake repair costs. Additionally, commercial EV adoption also offers an opportunity to leverage renewable energy sources to power on-site EV charging infrastructure, which can help businesses gain a sustainable cost advantage. The EVs also depreciate less and have a higher resale value than conventional vehicles, allowing business owners to recuperate a substantial amount of their initial investment.

It's important to note that not all EV players offer the same cost advantage. There is a variability of TCO between different electric vehicles and providers based on three over-arching factors - advanced technology capabilities, superior customer service resulting in lower downtimes, and superior vehicle designs.

The latest technological advancements, such as artificial intelligence (AI)-based intelligent electric vehicle (EV) systems, advanced telematics technology, sensors, and augmented reality (AR), have revolutionised the transportation industry. With these cutting-edge tools, cargo load optimisation and route optimisation have become more efficient, while end-point recognition has become more accurate, and driver safety has been significantly improved. The integration of these technologies has brought about a new era of innovation and efficiency in the transportation sector, making it easier than ever before to transport goods safely and seamlessly.

Production efficiencies stemming from smart manufacturing practices lead to economies of scale that effectively decrease the per-unit production cost. Streamlining manufacturing processes and placing emphasis on diminished component requirements involved in building electric vehicles contribute to enhanced reliability and diminished maintenance expenses.

Superior vehicle designs incorporate battery systems that are both efficient and lighter in weight, which make up a substantial portion of an electric vehicle's overall cost. To further improve upon this, manufacturers of electric vehicles are implementing the use of lightweight, streamlined aerodynamic designs that positively impact fuel efficiency, prolong battery life, and ultimately result in cost savings through reduced charging times.

As EV technology matures, the upfront cost differential between an electric vehicle and a traditional gas-powered vehicle continues to reduce, making the economics of deploying electric vehicles inevitable when it comes to commercial fleet adoption.

(The author is the Managing Director & Co-promoter at Etrio)

Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP Network Pvt. Ltd.

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Electric vehicles in the United States - statistics & facts

New players are yet to reach profitability

Tesla

continues to dominate the U.S. EV market, with an estimated 536,100

electric vehicles sold in the United States

in 2022. However, competition is beginning to gain momentum, and manufacturers such as General Motors are continuing to add new EV models into their range of vehicles offered. Ford's Mustang Mach-E and

Chevrolet's Bolt

made it into the list of

best-selling battery-electric vehicle models

in 2022. Nearly 20,800 and 22,100 Chevrolet Bolts were sold in the United States in 2020 and 2021, respectively. The model is manufactured by a subsidiary of General Motors, which will end its Bolt production at the end of 2023 to focus on building electric pickup trucks. 2022 Chevrolet Bolt sales dropped to their lowest point since 2017. General Motors intends to only sell zero-emission vehicles by 2035.

Despite more American brands ranking high among the

best-selling battery-electric vehicle (BEV) brands in the United States

, the U.S. electric vehicle market heavily depends on Tesla's sales. In 2022, the company reported over five times as many BEV sales as Ford, which ranked second. This contrasts with the

global BEV market

, where the gap between Tesla and other manufacturers is not as steep.

Tesla's success and the increasing popularity of electric vehicles have attracted growing investments in EVs, charging infrastructure, and battery manufacturing. Manufacturers are looking to increase their research and development expenditure, with electric mobility at the forefront of their investments. This is partly motivated by the U.S. government's commitment to decarbonizing its fleet, with many states pledging to ban the sale of fossil fuel vehicles by 2035. However, despite this success, new market players still struggle to attain profitability. Despite the R1T being among the ten best-selling battery-electric cars in the U.S.,

Rivian reported its largest net loss

in the 2022 fiscal year. Lucid Motors fared better,

decreasing its net loss that same year

, but has yet to become profitable.

Market challenges discourage consumers

Increasing retail gasoline prices

could contribute to consumer interest in EVs. However, the market still faces various challenges which can act as disincentives for prospective car buyers. In an October 2022 survey, U.S. respondents highlighted EVs' cost, driving range, and the time necessary to charge their batteries as the

leading concerns regarding battery-electric vehicles

. According to an October 2022 survey, 47 percent of

U.S. participants expected an EV to have a driving range of 400 miles or above

, including 19 percent expecting an EV to have a driving range of 600 miles or more. As of April 2023, the 2022 Lucid Air Dream Edition Range was the EV model with the

longest range on the market

at 520 miles. Tesla's 2021 Model 3 with all-wheel drive, second in this ranking, had a driving range of around 353 miles, fitting or exceeding the expectations of 53 percent of U.S. consumers.

However, while consumers' range anxiety might not match market reality, price inflation has been heavily impacting the automotive market due in part to market uncertainties linked with the semiconductor shortage and rising raw material prices. While electric vehicles were not as affected by this uncertainty, their price point was still prohibitive for many consumers. In December 2022, the

average selling price for electric cars

was the third highest across all vehicle types. It remained relatively stable compared to December 2021down 397 U.S. dollars to nearly 61,500 U.S. dollars.

When it comes to electric vehicle charging infrastructure, the United States boasts the

third-largest public charger network worldwide

. However, 77 percent of U.S. consumers surveyed in October 2022 reported

intending to charge their electric vehicles most often at home

, highlighting prohibitive installation costs as one of the main reasons they could not access charging at home. In 2022, the U.S. recorded over 136,500

public chargers

installed in the country, over six times the size of its

private charger network

. These various challenges leaves space for new opportunities in the U.S. EV market, with the government supporting EV adoption by enacting

various laws and incentives to promote the sector

608 electric vehicle laws and incentives were recorded in 2022.

This text provides general information. Statista assumes no liability for the information given being complete or correct. Due to varying update cycles, statistics can display more up-to-date data than referenced in the text.

Electric Vehicle Calculator

What is an EV calculator?Our EV calculator helps you assess the money you save if you switch to an electric vehicle. It gives an estimation of the running cost of a traditional Internal Combustion Engine (ICE)-based vehicle compared to an electric vehicle for an informed choice.How to use the EV Calculator?This calculator is designed keeping in mind fluctuating fuel prices and the electric vehicle options available in the market. It gives you the flexibility to not only calculate savings as per current fuel prices and EV availibility, but also to check costs of upcoming models.This gives a dynamic, 360 degree view between the two choices.The calculator has two parts. It will need details like your state and city and your average travel time (again you can add estimated travel time). There are two different sections to add average travel time during weekdays and weekends.In the second part, you have to provide the cost of fuel and mileage of the ICE (Internal Combustion Engine) vehicle in use. Also, you have to add details of the electric vehicle such as estimated range, battery capacity, and charging tariff.Based on your inputs, the calculator will give an estimate on the running cost per kilometre, the average daily running cost of both traditional and electric vehicles. It will also calculate the running cost of both ICE and the EV per year, which helps you know the money you can save should you choose an EV.

Charging, road trips, maintenance, and more: 8 EV owners reveal the realities of going electric

Rick Samuels, 71 Portland, OR Tesla Model 3

The Nissan Leaf was the first affordable, practical EV. We leased our first Leaf for three years in 2011. I was commuting about 30 miles a day, which was an ideal range for a first-generation Leaf. We then bought a 2-year-old, lease-returned 2013 Leaf.

In 2014, when the first lease ran out, Nissan was practically giving 2014 models away. It was $1,000 up-front and $100 a month for a two-year lease. At the end of the two years, in 2016, Nissan gave us another 12,000 miles and kept the payments the same. At the end of the third year, we ended up buying the Leaf for $9,200. We had the 2013 and the 2014 models for some time.

In early 2021, we wanted a car with more range, so we ended up leasing a 2020 Leaf SV Plus with about 200 miles of range. The lease price reflected federal and state tax credits, plus a factory incentive. We live in a floating home, but a nearby members' club allowed us to put Level 2 chargers in the parking lot.

Last fall, we took our first real road trip, and that's when we found out how abysmal public-charging infrastructure is.

The problem was finding chargers that worked without issues. At that point, we said, if we were going to drive an electric car, and we wanted to take trips, pretty much our only choice was a Tesla, so we bought a used Tesla Model 3 and sold one Leaf.

We have taken several trips in the Tesla and have never had a problem charging. We've had it for a year and have not had any significant problems with it. Our Leaf, which now has over 80,000 miles on it, has also never needed any significant repairs. We've only had to get the 12-volt batteries replaced.

I tell people that if it's going to be your main car for trips, the only electric car I would get right now is a Tesla. In two or three years, that may be different, but right now, their public-charging infrastructure is much better. You don't have to worry about a card reader not working or about a screen being vandalized.

We see no need to have a gasoline-powered car. And we hope we will never have to buy another gasoline-powered car.