Ryder Examines Economic Impacts of Converting to Commercial Electric Vehicles (EV) in Current Market
Quantitative analysis compares total cost to transport goods by diesel versus electric vehicles and weighs broader inflationary impact
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Ryder releases a quantitative analysis of the potential economic impacts of converting commercial diesel vehicles to electric vehicles (EV) in today’s market. (Photo: Business Wire)
Based on representative network loads and routes from Ryder’s dedicated fleet operations in today’s market and other factors, the data shows the annual total cost to transport (TCT) by EV versus diesel is estimated to increase across the board – ranging from up to 5% for a light-duty transit van to as much as 114% for a heavy-duty tractor (depending on the geographic area). And, for a mixed fleet of 25 light-, medium- and heavy-duty vehicles, the analysis shows an increased TCT of up to 67% for an all-electric fleet.
“While Ryder is actively deploying EVs and charging infrastructure where it makes sense for customers today, we are not seeing significant adoption of this technology,” says
Methodology
Ryder examined the TCT for diesel engines versus electric technology in the light-, medium-, and heavy-duty vehicle classes. The analysis is based on representative network loads and routes from Ryder’s dedicated fleet operations, which includes more than 13,000 commercial vehicles and professional drivers. It factors in the cost of the vehicle, maintenance, drivers, range, payload, and diesel fuel versus electricity, while also accounting for EV charging time and equivalent delivery times. The analysis also assumes the accessibility and use of the fastest applicable commercial vehicle chargers – though this network infrastructure is not yet built out.
First, Ryder conducted one-to-one comparisons for diesel and EV transit vans, straight trucks, and heavy-duty tractors, using cost assumptions from
Second, as most companies have more than one vehicle, Ryder applied the individual costs to a fleet of 25 vehicles of mixed classes and types, and compared the cost of owning and operating that fleet in
TCT Impact in
For
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A light-duty EV transit van (Class 4) shows an estimated annual increase in TCT of approximately 3% or nearly
$5,000 . While vehicle cost increases 71% and labor increases 19%, partially due to more time required for EV charging, fuel versus energy costs decrease 71% and maintenance cost decreases 22%. -
For a medium-duty EV straight truck (Class 6), the annual TCT increases to approximately 22% or nearly
$48,000 . The vehicle cost increases 216%, which is only partially offset by a 57% savings in fuel versus energy and 22% savings on maintenance. -
And, for a heavy-duty EV tractor (Class 8), the annual TCT increases by approximately 94% or approximately
$315,000 . The equipment cost is the largest contributor, representing an increase of approximately 500%, followed by general and administrative costs that increase approximately 87%, and labor and other personnel costs that increase 76% and 74%, respectively. Fuel versus energy savings are approximately 52%. This assumes delivery times equivalent to a diesel vehicle and factors payload and range limitations as well as EV charging time – all of which requires nearly two heavy-duty EV tractors (1.87) and more than two drivers (2.07) to equal the output of one heavy-duty diesel tractor (which requires 1.2 drivers on average).
TCT Impact in
In
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A light-duty EV transit van (Class 4) shows an annual TCT increase of approximately 5% or nearly
$8,000 . While the vehicle and labor cost increases remain approximately the same, at 71% and 20%, respectively, fuel versus energy costs decrease 91% and maintenance decreases 22%. -
For a medium-duty EV straight truck (Class 6), the annual TCT increases to just under 28% or more than
$53,000 . The vehicle cost increases 216%, which is only partially offset by a 60% savings in fuel versus energy costs and 22% savings on maintenance. -
And, for a heavy-duty EV tractor (Class 8), the annual TCT increases by nearly 114% or more than
$330,000 . Vehicle cost remains the largest contributor, representing an increase of approximately 500%, followed by other operating costs that increase 87%, and labor and other personnel costs that increase 79% and 76%, respectively. Fuel versus energy savings are approximately 48%. Again, this assumes delivery times equivalent to a diesel vehicle and factors payload and range limitations as well as EV charging time – all of which requires nearly two heavy-duty EV tractors (1.87) and more than two drivers (2.07) to equal the output of one heavy-duty diesel tractor (which requires 1.2 drivers on average).
TCT Impact in
Ryder then applied the TCT for individual vehicles to a mixed fleet of 25 light-, medium-, and heavy-duty commercial vehicles operating in
In this scenario, a company converting 10 heavy-duty diesel tractors would need nearly 19 EVs and 21 drivers in order to provide the same level of service. This increases the total number of vehicles in the fleet from 25 to nearly 34 and drivers from 27 to nearly 36. Therefore:
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To convert a mixed fleet of vehicles in
California to EV, the TCT would increase nearly 56% or more than$3.4 million . -
To convert the same fleet in
Georgia , the TCT would increase approximately 67% or just more than$3.6 million .
Inflationary Impact
Ryder’s analysis also considers the potential inflationary impact if companies were required to convert to electric vehicles today. Based on the TCT for a mixed EV fleet, and assuming companies pass the increased TCT on to consumers, Ryder estimates those increases could cumulatively add 0.5% to 1% to overall inflation.
Key Takeaways
“There are specific applications where EV adoption makes sense today, but the use cases are still limited. Yet we’re facing regulations aimed at accelerating broader EV adoption when the technology and infrastructure are still developing,” says
“While mass adoption of EVs is not being required at this time, the purpose of this analysis was to quantify the gap in the total cost to transport goods with diesel versus electric vehicles and to understand what it will take to make commercial EVs economically viable at scale,” adds Sanchez. “Today, it would require significant advancements in EV technology to improve range and payload, and according to at least one industry estimate, nearly
For a complete copy of the analysis and further insights from Ryder on the road to electrification, download a copy of “Charged Logistics: The Cost of Electric Vehicle Conversion for
About Ryder’s EV Solutions
As one of the largest and longest-running fleet owners in
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Note Regarding Forward-Looking Statements: Certain statements and information included in this news release are “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements, including our expectations with respect costs of EVs and the related costs of maintenance, charging infrastructure, labor and insurance, as well as our expectations related to the impact of converting diesel fleets to EVs on supply chains and inflation, are based on our current plans and expectations and are subject to risks, uncertainties and assumptions. Accordingly, these forward-looking statements should be evaluated with consideration given to the many risks and uncertainties that could cause actual results and events to differ materially from those in the forward-looking statements including those risks set forth in our periodic filings with the
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