As businesses continue to look for ways to reduce their environmental impact and lower their energy costs, electric fleets of vehicles have emerged as a possible solution. By transitioning to electric fleets, companies in a range of industries can drastically reduce their carbon footprint — and benefit from the cost savings associated with reduced fuel dependency.
But those aren’t the only advantages; electric vehicles (EVs) are more efficient, require less maintenance, and do less damage to the environment. With so many advantages, investing in an electric fleet of vehicles is becoming an increasingly attractive option for businesses of all sizes.
That said, making the switch from fossil-fuel vehicles to electric comes with other costs, particularly if you’re managing a large fleet. Sure, electric vehicles would save large amounts of energy to offset the investment, but at what point does it make financial sense? Here, we compare gas and electric vehicles, including cost, energy usage, and other factors you might not have considered.
But first, let’s tackle the big question: Do electric vehicles actually save money?
Do Electric Vehicles Save Money?
If you’re interested in going electric, then we have some good news: Yes, electric vehicles do save money. In fact, the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) reported in 2020 that by switching from gasoline to electric a single motorist can save as much as $14,500 on fuel costs over the space of 15 years. And that’s assuming that fuel prices remain relatively stable; increasing costs at the pump would likely mean even greater savings for EV owners.
So, if the question is “How much money does an electric car save per year?” you could be looking at ~$1000 in annual fuel savings.
Do Electric Cars Save Money in the Long Run?
Again, the answer here is yes. Along with the $14,500 in fuel costs saved over the course of 15 years, Consumer Reports found that by comparing the nine most popular EVs under $50,000 against the most-efficient internal combustion engine (ICE) alternatives, the total lifetime ownership costs for EVs were lower across the board — with most EVs saving between $6,000 and $10,000.
In other words, while EVs tend to cost more to purchase, they generally cost significantly less to operate and maintain. After all, EVs don’t require regular oil changes or air-filter replacements.
These savings become even more pronounced when you consider the impact of upgrading an entire fleet of vehicles. Many manufacturers provide fleet discounts when a company purchases several vehicles at once. These discounts reduce the purchase price of each individual unit, cutting into the typically-higher sticker price of purchasing EVs. When combined with the lower cost of ownership, this may allow organizations that manage EV fleets to save even more.
Lastly, it’s also worth mentioning that Federal and State governments offer incentives for using electric vehicles. These may include rebates, tax credits, reduced registration fees, and special parking and high-occupancy vehicle lane exemptions.
Other Factors to Consider
Many elements go into determining cost savings for electric vehicles. And while the overall total cost of ownership is lower when dealing with EVs, some individual costs may be higher than those associated with comparable ICE vehicles.
In addition to the high sticker price, EVs may be more expensive to insure. AAA reports that full insurance coverage for an electric vehicle is about $1,227 — slightly above the weighted average of insurance costs for EVs, hybrid vehicles, 4WD pickups, and minivans. This makes sense; more-expensive cars usually cost more to insure, and some of the most expensive high-end EVs can become extremely costly to purchase coverage for. For example, Insurance.com reports that to insure a 2021 Tesla Model 3 costs $2,503 per year on average.
Also, while maintenance may cost less, repair costs for electric vehicles are often slightly higher. CCC reports that the repair costs for small, non-luxury EVs average $4,041 when compared to the $3,191 average repair costs for non-EV models.
Still, these negatives are taken into account when considering the total cost of ownership, which means that even with high initial costs, more-expensive insurance, and potentially more costly repairs, the total savings of operating an EV continue to outpace traditional gasoline vehicles.
The Difference in Energy Usage while Driving
Naturally, cost savings aren’t the only reason to switch to EVs; traditional ICEs are often not very efficient, burning large amounts of gasoline to produce relatively small amounts of power.
The efficiency of traditional ICE vehicles is measured in miles per gallon (MPG). MPG estimates how many miles of distance a vehicle can cover by burning a single gallon of gasoline. Of course, EVs don’t use gasoline, which means that measuring in MPG doesn’t work. Instead, EV efficiency is measured using miles per gallon equivalent (MPGe). Essentially, MPGe allows drivers to more accurately compare the energy efficiency of the two types of vehicles.
Using these standards of comparison, Fueleconomy.gov reports that only 12%–30% of the fuel put into a gasoline-powered vehicle is used to move it forward; the rest is either lost to inefficiencies or used to power other vehicle accessories (many of which, such as pumps and fans, only exist to help dissipate the heat created by the combustion engine).
By comparison, EVs are significantly more efficient. 60%–73% of EV power goes directly to moving the vehicle, and that number can jump to 77%–100% when regenerative braking systems are used to recapture and reuse energy lost from braking.
The results are clear: Electric cars save huge amounts of energy. If you want to get more out of the energy you put in, EVs beat ICEs every time.
Emissions
The prolonged use of fossil fuels has had a marked negative impact on our planet. With this in mind, it’s important to look at the difference in emissions produced by ICEs and EVs.
Currently, the manufacturing process used to produce electric vehicles creates a larger carbon footprint than the processes used to create gasoline-powered vehicles. But that isn’t the whole story. The US Environmental Protection Agency (EPA) reports that when you take into account that EVs produce zero tailpipe emissions while driving, the overall negative environmental impact of EVs is substantially lower than that of ICEs that create emissions during production and during use.
That leaves only the emissions released by power plants that are used to generate the electricity that powers electric vehicles. While it’s true that traditional coal-burning plants are major sources of carbon emissions, clean-grid options (such as solar, wind, and geothermal) are becoming more widespread. And as the US continues to adopt these renewable energy sources, electric cars will save America even larger amounts of energy.
Are Electric Fleets a Viable Alternative?
There aren’t many reasons to choose ICEs over EVs, but one that continues to stand in the way of fleet-deploying organizations is the availability of charging stations. Without enough charging stations to keep fleet vehicles powered and running, many companies may not be able to reliably transport goods, products, or people to where they need to be. The good news is that every day more charging stations are being deployed. And as technology continues to advance, it seems likely that EVs will become even more feasible.
In the meantime, businesses can continue to save energy and money by renting high-quality trucks, pickups, and flatbeds.
Summit Fleet offers nationwide fleet rental services, customized to fit your needs. Fully scalable and with no long-term commitments, Summit Fleet takes care of many of the costs and hurdles that get in the way of effective transportation, so you can focus on growing your business.
There seems little doubt that the future is electric. But until the infrastructure exists to make EVs the new standard in fleet transportation, enjoy powerful, price-conscious solutions with Summit Fleet. Click here to rent from Summit Fleet, and start saving money today.
