A recent opinion piece from Constance Douris, the manager of the energy portfolio at Lexington Institute, recently appeared in the Inside Sources newsletter, and it made a pretty solid case that electric vehicles (EVs) are good for the bottom line of most businesses.
Many of us only think of EVs in terms of personal transportation. And even then, a lot of us view electric-powered vehicles as some sort of expensive, exotic toy primarily owned by celebrities and board members of the Sierra Club. Outside of the Chevrolet Bolt, the Nissan Leaf and a Tesla of some stripe, most people can’t name another EV. Small wonder that business fleets aren’t stuffed full of EVs.
Show Me the Money
At $2.84 a gallon, gasoline costs more than twice what a gallon-equivalent in electricity (eGallon) costs, according to the United States Department of Energy. That means that the energy produced from an eGallon equals the energy produced from a gallon of gasoline, and does it for a lot less. As of July of this year, an eGallon costs $1.17. Obviously, gas prices fluctuate. They are up one day and down the next, but they will probably never drop as low as $1.17 again.
Furthermore, an electric motor requires less maintenance than an internal-combustion engine, creating even more savings.
Band Wagon Effect
According to Douris, many businesses and government entities are either already transitioning to EVs or have plans to do so in the near future. She identified companies like UPS, which has plans to have 66 percent of its trucks powered by electric by 2022. Frito Lay, Coca-Cola and FedEx also made her list. A dozen large cities, including Los Angeles and Seattle, have committed to incorporating all-electric buses into their public transportation fleets beginning in 2025.
Volkswagen just ponied up $1.7 billion to help electrify buses and trucks by 2022. Lyft announced it would provide one billion rides per year in fully-electric autonomous vehicles (AVs) by 2025.
Most experts in future mobility fully expect the transportation of tomorrow — whenever tomorrow might be — to feature three key components. The first is vehicles powered by electricity. This won’t just be cars, but short- and long-haul trucks, buses and so forth. The second component is ride sharing. Whether this is in the form of ride-hailing services like Lyft or multiple people sharing one vehicle, individual car ownership will be far less prevalent than it is today. The third leg or component is AVs.
As stakeholders continue to head toward that idea of mobility, developing new technologies will probably continue to drive down the costs of operating electric vehicles. It will make less and less sense for a business aiming to generate profit to resist going electric.
What It Means to You: Lowering the cost of doing business is good for everyone. Electrifying its fleet seems like a logical path for a business in search of higher profits.