We’re about to reach the electric vehicle tipping point. Are you ready?
How investing in the right technology today will help you achieve an optimized electrical infrastructure that is scalable for the future.
Did you know that running a class-8 electric truck in 2019 was cheaper per kilometer than running a high-performance diesel of the same class?
If you didn’t, you’re not alone. Largely under the radar, electric vehicle (EV) technology has made huge advances in recent years — not just for trucks, but across all types of electric vehicles.
For fleets mapping their electrified future, it is essential to understand the electric vehicle tipping point: the time when the benefits of EVs, such as reduced maintenance and a longer engine life, outweigh the costs of making that initial investment. It is also critical to consider the electrical and charging infrastructure required to prepare for it.
Look beyond the price of electricity
An easy-to-make mistake when comparing internal combustion engine (ICE) vehicles with electric ones is to compare the cost of fuel with that of electricity. The numbers are compelling — a recent study by the U.S. Department of Energy found that the fuel required to drive a mile in a 135kWh electric truck cost 44 percent less than the equivalent amount of diesel  —
but can over-simplify some of the complex considerations those looking to electrify their fleets will need to consider. These include:
- Increasing power requirements as EVs become larger and can travel longer distances
- Local grid capacity where charging will take place
- Local electricity prices
It is also important to monitor the time of day for vehicle charging, specifically to manage the time of day for fleet refueling to avoid high tariffs. And no matter how cheap electricity prices are, if vehicles regularly travel to the edge of their range and in locations without local charging infrastructure, then switching to EVs creates additional operational risk.
This means that calculating a fleet’s EV tipping point involves factoring in a wide range of different variables, not just fuel costs.
Politics can speed up the arrival of the tipping point
The political landscape is also a consideration. Some countries offer generous subsidies on electric commercial vehicles. In Germany, for example, companies can apply for grants of between $13,400 and $45,000 for each electric vehicle they buy.
Another political challenge to overcome is determining who pays for building the next-generation electricity grids that can support large fleets of electric vehicles. Few electricity grids will be able to cope with the sudden power drain should a large fleet depot suddenly switch many dozens of vehicles to electricity. Upgrading the local infrastructure, however, can cost a power company (and its customers) easily $1 million or more.
Having said that, switching to EVs does not have to involve a million-dollar upgrade. Clever fleet management can make it possible to sidestep many of these issues. The right grid connection combined with automated charge-scheduling software, for example, can keep the load on local power infrastructure manageable and help to control cost. Locations with more complex challenges and higher demands for electricity can invest in sophisticated load-optimization solutions.
In a study by ABB Group, two identical locations trialed the same number and type of EVs. The site with load-planning tools spent just $0.6 million on energy, while the one without spent $2 million.  That’s your tipping point for the total cost of ownership of EVs right there.
How to prepare for your switch to electric
Central to determining when a company is ready to start adopting EVs is the availability of the right electrical and charging infrastructure, particularly at the depot. Often fleet managers are concerned about factors such as the robustness of the local charging infrastructure, the affordability of charging technology and the ability to control costs.
What many don’t realize is that the industry is already well on the way to solving these problems or, in many cases, has already solved them. The latest EV charging electrical infrastructure is so highly advanced that it offers a smooth startup, is modular and scalable, and is both safe and highly economical to run. The right set-up is plug-and-play to allow fleets to quickly get up and running today, while also being able to support future generations of EVs, which will demand much faster charging speeds. All wrapped up in a solution so safe it does not require any fencing.
Looking from grid-to-charger and using the latest and most advanced electrical infrastructure, fleet managers can access the best possible performance and ROI. And by choosing charging points based on industry-standards, they can future-proof their depots by ensuring compatibility with the widest range of vehicles.
What’s your tipping point?
According to our research, a company with a fully optimized charging infrastructure and good fleet management can run as many as 50 trucks for as little as $580,000 a year . While it’s true that EVs do have higher upfront costs than comparable ICE vehicles, factors including their superior efficiency and the high utilization of fleet vehicles can enable operators to quickly achieve a lower total cost of ownership. A recent calculation by McKinsey suggests that fleet EVs can achieve a total cost of ownership that is 15 to 25 percent less than that of equivalent ICE vehicles by 2030 .
This brings us back to the question: Are electric vehicles ready for prime time? The answer depends on you: If you are ready to invest in not only the vehicles but also the right electrical infrastructure building blocks for managing your electric fleet, then your electric tipping point and return on investment has arrived.
1. Analysis of long-haul battery electric trucks in EU. Thomas Earl, Lucien Mathieu, Stef Cornelis, Samuel Kenny, Carlos Calvo Ambel, James Nix. European Federation for Transport and Environment, 17 May 2018.
2. Trucking into a Greener Future. Gilbert-d’Halluin A; Harrison P. European Climate Foundation, 6 September 2018.
3. The energy consumption and cost savings of truck electrification for heavy-duty vehicle applications, Oak Ridge National Laboratory, US Department of Energy
4. Subsidy scheme for electric trucks in Germany, Nora Manthey, Electrive.Com, 4 June 2018
5. Fleet Electrification through FleetGrid, Leszek Izdebski, ABB Digital Transformation Group, 2019
Visit solutions.abb/e-mobility to learn how investment in electrification solutions today impacts the transport of tomorrow.