July 2, 2024

Electrify Your Fleet: Upfront Costs vs. Long-Term Savings

6 Min. Read

• Upfront Costs: Fleet electrification involves initial investments in vehicle acquisition and charging infrastructure, with costs ranging from $400+ for at-home Level 2 chargers to $18,000-$350,000+ per port for DC fast chargers, plus installation and electrical upgrades.
• Long-Term Savings: Electric fleets offer lower total cost of ownership (TCO) through reduced fuel costs ($0.03-$0.05 per mile) and maintenance expenses (~$0.03 per mile), enhanced by advanced telematics, route optimization, and potential revenue from carbon credits or bidirectional charging.
• Incentives and Benefits: Federal and state incentives, like the $100,000 per port Alternative Fuel Vehicle Refueling Property Credit and up to $40,000 per EV Commercial Clean Vehicle Credit, help offset costs, while electrification improves air quality, customer satisfaction, and talent retention.

Fleet electrification is on the rise, driven by clear benefits such as significant cost savings through reduced fuel and maintenance expenses, improved air quality by cutting down on harmful emissions to meet ESG goals, and enhanced customer satisfaction due to quieter, more reliable, and environmentally friendly vehicles.

For organizations considering the switch to electrified fleet vehicles, it’s important to weigh the upfront costs against the long-term savings to make an informed decision that maximizes the return on investment for their new EV fleet.

In this article, we’ll explore what fleet managers should know about upfront costs vs. long-term savings in their decision to electrify their fleet.

The Upfront Cost to Electrify Fleet

While EVs are more cost-effective than gas-powered vehicles in the long term, there is an upfront cost that requires an initial investment in two main areas: vehicle acquisition and charging infrastructure.

Vehicle Acquisition

The cost of purchasing or leasing fleet EVs varies based on the make and model, but the good news is that EV prices are steadily dropping and are now only 5.5% higher than the average ICE vehicle, with many models being priced under $40,000. Manufacturers are also continuing to develop new EVs, meaning fleet managers have greater flexibility in ensuring fleet vehicles meet all the needs of their business.

To save on vehicle acquisition, you might consider purchasing used EVs or reaching out to automakers directly to explore any discounts they might be able to offer for scaled or commercial purchases.

Charging Infrastructure

Developing a charging strategy and investing in a charging infrastructure is a critical part of planning your fleet electrification.

Options include creating a central charging hub, adopting at-home charging for your drivers, relying on third-party charging facilities, or using a combination of these methods.

Not sure which EV charging station solution is the best fit for your fleet?

Here’s more on how to evaluate which EV charging station solution fits your electric vehicle fleet needs.

Equipment can cost as little as $400+ for at-home Level 2 EV chargers, with commercial chargers tending to cost more and often requiring additional investments in infrastructure as well. You’ll also need to factor in labor costs for the installation and potential electrical upgrades which typically range from $799-$1,999 for a Level 2 EV charger.

Level 3 EV charging stations, also known as DC fast chargers will be significantly more expensive and are limited to commercial and industrial locations, making them a more ideal investment for fleet depots and shared charging hubs.

According to Tom Bowen, President of Qmerit Solutions, “On average, installing DC fast chargers will cost anywhere from $18,000 to $350,000+ per port. The price will depend on various factors such as the complexity of the installation, features of the DCFC selected, distance from the chargers to a power source or electric panel, and any other service or infrastructure upgrades required to support the charging stations.”

Additional Costs and Incentives

Fleet electrification will likely result in additional costs, such as training for drivers or investing in route planning software that supports charging requirements and battery ranges.

Federal, state, and local incentives can help offset the upfront cost of electrification and total cost of ownership for electric fleets.

For example, businesses can claim the Alternative Fuel Vehicle Refueling Property Credit worth up to $100,000 per port to save on their charging infrastructure.

You can also look into electric vehicles eligible for the Commercial Clean Vehicle Credit of up to $7,500 per EV weighing less than 14,000 pounds and up to $40,000 per EV weighing more than 14,000 pounds.

Visit Qmerit’s EV Charging Rebates and Incentives page to view programs you may qualify for.

Exploring Electric Fleet TCO and Long-Term Savings

In general, EVs have a lower total cost of ownership (TCO) than ICE vehicles, creating a strong argument to electrify your fleet beyond the obvious environmental benefits of adopting a fleet of electric vehicles and meeting any corporate ESG goals. Electrifying your fleet is good for business and your bottom line.

Fuel and Maintenance Savings

A major immediate benefit of electrifying your fleet is savings from reduced fuel spending. The average electric commercial rate is $0.13 per kWh, which translates to an average cost of $0.03 to $0.05 per mile, given that most EVs have a conversion range of 3 to 4 miles per kWh. You can save even more if your utility provider offers preferred charging rates or by investing in solar-powered EV charging.

Maintenance is another area where electric fleets can create significant savings, as EV batteries and motors require little maintenance, there are fewer fluids to check, and regenerative braking reduces wear and tear on the brakes. Overall, you can expect to spend as little as $0.03 per mile on maintenance.

Other Long-Term Savings

You can offset the cost of going electric by taking advantage of multiple sources of value:

• EVs allow for more effective fleet management and route optimization thanks to their advanced telematics features.
• You can explore new business opportunities by connecting with customers and partners who share your environmental values.
• Electrification can also be a differentiator that helps you attract and retain talent, a significant benefit for drivers in the context of labor shortages.
• EV adoption supports improved air quality at the local level, contributing to better health and a thriving community.
• In the near future, more EV models will feature bidirectional charging, a technology that allows your business to sell any unused load back to the grid.
• For California fleets, going electric is an opportunity to earn and sell carbon credits.

EV Fleet Charging With Qmerit

EV fleets have a significantly lower TCO, with savings on fuel costs, maintenance, more effective fleet management, and more. However, there is an upfront cost to plan for. Successful fleet electrification projects leverage strategic planning and incentives to minimize this cost and enhance ROI.

With lower TCOs and manageable upfront costs, it’s clear that the future of fleet management is electric. Now is the perfect time to consider electrification and start exploring EV models, charging options, and incentives.

Qmerit simplifies EV fleet charging implementation by helping fleets overcome the complexities of installation. We provide a simple and seamless installation experience with top-quality service you can trust, helping fleets budget and control costs while tracking every step of the process.

As the largest and most trusted electrification network in North America, our network of certified electricians has installed over 770,000 EV charging stations in homes and businesses across the U.S. and Canada.

We understand that electrifying your fleet is a big project. We’ll work with you to ensure your drivers have a same safe, high-quality EV charging experience.

Learn more about EV fleet charging solutions for corporate vehicles and contact Qmerit to explore how fleet electrification can save you money, improve your brand reputation, and help build your business for the future!