Electric Delivery Vans for Distribution and Logistics
Are you planning for a future with electric vehicles (EVs)? To help you plan, it’s worth taking a quick trip down memory lane...
At the end of this article is a helpful guide to buying electric vehicles and running them on zero emission energy. Read the full version, or skip straight to the guide - the choice is yours …
History of Electric Cars.
The history of the electric car goes back to around 1830, with small scale production in Hungary, the Netherlands and the US.
By 1899, the virtues of the electric car were cutting through - quieter, more reliable and free from pollution, but only affordable for the super rich (sound familiar?). In 1901, work on hybrid cars was taking place, but by 1912 the Model T Ford car, with the internal combustion engine, was racing ahead and by 1935 the electric vehicle was “dead”.
Fast forward to 2008 and the launch of the Tesla Roadster, at a time when Toyota Prius sales were peaking. Despite the many failings of the Roadster, recent history shows Tesla’s strategy was genius. Despite the naysayers, the Roadster gave Tesla a platform for technology development, which they could leverage into bigger markets (Model 3) before incumbent auto-makers were convinced electric vehicles had a future.
So, what does this say about the future of Electric Cars?
As of June 2021, the Tesla Models 3 and Y are the top 2 selling electric cars globally. The future of cars is all-electric. Just 12 months after launching the Model Y into the largest car market class (SUVs), they are a global top seller doing 35,000+/month, while the Prius sits at just 55,000/annum.
It appears likely that hybrids, fuel cells and more efficient combustion engine vehicles will all struggle to compete on either price or performance, as electric vehicles come down the cost curve. How can we be so confident?
Wright’s Law is beautifully explained here by Ark Invest (an investment firm specialising in innovation). Wright’s Law describes how prices fall in relation to production volume. Now that more pure-electric cars are being produced than any zero-emission competitor and the majority of industry investment is behind all-electric vehicle production, Wright’s Law is in full effect and will make it near impossible for alternatives to leap-frog all-electric anytime soon.
We can also include intuitive insights - electric cars are far simpler to make and operate than their competitors, and the distribution of electricity is ubiquitous (as opposed to hydrogen, which would require completely new supply-chain infrastructure).
On the back of “Tesla AI day” recently, we can add Artificial Intelligence to the future EV story, as a “when, not if” scenario. Tesla data is showing almost 10x as many miles can be driven with autopilot engaged before an accident occurs… Or, put another way, in less than ten years Tesla engineers have trained software to drive more reliably than 100+ years of human practice.
There could be lots of reasons for this - the big one being that, perhaps, autopilot is engaged on sections of road where accidents are less likely to occur, so we need a degree of caution… However, the leading cause of accidents are, in order: speeding; alcohol consumption; fatigue and distraction.
By definition, AI and autonomous cars eliminate the top three with hard-coded speed limits, no drink driving and no fatigue. That leaves “distraction” - perhaps being akin to “AI labelling or decision error”.
Of course, Tesla isn’t the only one investing to solve this problem. Waymo (a Alphabet/Google project), Cruise and Amazon (via Zoox acquisition) are leading the pack in the US along with Baidu, WeRide and Didi in China.
Buying an electric delivery van for your fleet
Ok, so you are comfortable with the idea that the future of vehicles will be all-electric. How do you go about buying one?
We’ll focus on up-front costs and performance and what this means when it comes to operating a zero-emission fleet, leaving the question of “how likely is autonomous driving?” for you to make up your mind upon.
We won’t get into the nitty gritty of post-sales service and maintenance costs across brands here . Suffice to say that, like any major capital purchase, you have to do your homework on who you are buying from and how their product will stand the test of time.
So, without further ado...
Solving any energy-related problem always starts with a single basic question: “what do you plan to use it for?”
Matching energy solutions to energy problems is the key to making sure you invest wisely, whether it is solar power, batteries or an electric car.
With electric vehicles, the importance of this question is magnified, because so much of the capital cost is tied to the range of the vehicle. Or, in other words, if you buy a vehicle with a 500km range, but 99% of your trips are 100km or less, you will have over-invested.
Delivery Vans and Cargo
In this segment, there are four main options available now or in the near term, and one we’ve thrown in as an “outlier”. In order of least to most expensive, they are:
So, if your round trips are under 100km, or if your maximum one way trip is 100km and you have time to charge before your return trip, the Nissan e-NV200 (at just $25,000) could be for you.
However, if you’re looking at “bang for buck” and need closer to a 200km round trip on a single charge, the BYD T3 looks like the best option. It gives you the longest range, per $ spent. BYD is perhaps the best kept electric vehicle secret (in Australia). BYD has been Warren Buffet-backed since 2009 delivering a handsome 26x investment return to the Oracle from Omaha in that time.
If style is king in your world, perhaps you’ll just bite the bullet on the “Kangoo”, because that’s your thing, or even a Tesla Model 3 with a trailer. The Model 3 can also fold down rear seats for extra storage, and would give you the additional benefit of a great weekend ride, if it’s not needed for deliveries at work!
Light Electric Trucks and Heavy Duty Electric Trucks
SEA electric trucks are a great Australian Story, and have developed an all-electric platform that can be deployed to a wide range of industries and applications. Volvo has also entered the electric truck game with an iconic Australian brand, Victoria Bitter (VB).
Financing and Leasing scenarios
As the saying goes, it’s best to finance a depreciating asset. But the complication is that Australia currently offers very attractive accelerated depreciation. It’s hard to give useful “rule of thumb” advice, when there is so much to consider above and beyond car financing costs and distance travelled. However, here goes:
An Internal Combustion Engine car is going to cost roughly 2.5x more to run than an electric one. That’s a combination of lower fuel costs - but also lower maintenance costs. 2.5x might be conservative, with reports of Tesla owners having near zero maintenance costs over several years (just the normal tyre change, windscreen wiper change and brake fluid);
The following table describes this relationship for various scenarios:
Another way of looking at the numbers…
- If you are doing 200km a day in a vehicle, you can spend an extra $15,000 on an electric vehicle, on 3% finance over four years, and be roughly “cash flow neutral”;
- If you are doing closer to 250km/day, the premium you can afford is more like $20,000;
- And if you’re doing around 100km a day, an $8,000 premium still leaves you cash flow neutral.
Of course, once that finance is paid off (four years), if you are happy to retain your electric vehicle, the savings really kick in. Over ten years, the savings are as follows:
Ensuring zero emission energy supply to an electric car
One of the interesting things about electric cars is that they are a great way to store energy and move it around to wherever you need it - a vital part of solving the 100% renewable energy puzzle.
If you wanted to, the vast majority of commuters could drive any pure electric vehicle with decent (300km+) range to work, trickle/slow charge that vehicle all day while parked, drive home again and have more than enough energy in the car to supply a house through the night. With vehicle to home charging technology evolving quickly, that future may be with us sooner than you think. Of course, you could catch an electric train instead!
To help you match your travelling needs to solar options, check out the table below.
We’ve assumed your vehicle needs about 20kWh of energy to do 100km - like a petrol car, each vehicle has inherently different efficiency and will vary again based on driving conditions. So, take this table as a rough guide for now, and we can help you do more detailed assessments when you’re ready.
*note: if you are already buying solar, and just installing “a bit more” to cover your car charging energy demand, these costs will be even lower. This is because adding 2.5/5/10kW to a 20/30/50kW system is a lot cheaper than just installing the 2.5/5/10kW on its own.
Using an electric car as a battery to store excess daytime solar power
Strangely, it’s cheaper to buy 1kWh of battery storage in a car than it is to buy the storage alone!
So, if your rooftop solar system is producing more energy than you need and you’re sick of getting a low feed-in-tariff, it’s possible the cheapest way to store that energy and put it to good use is to buy an Electric Vehicle!
Here we compare the cost of buying 10kWh in a vehicle to other options.
In other words, the Tesla Model 3 will store your energy for about the same cost (per kWh) as a Tesla Powerwall battery, while the BYD T-3 will store energy for less than just about any battery storage option on the market.
Charging speeds and switchboard/network capacity
Another key consideration is how quickly you can charge your vehicle, and whether you have the supply capacity at your premise to install a charger.
Charging is typically described as having three speeds - trickle, fast, and “super”. Superchargers are typically dedicated charging stations and expensive to establish, so we will set them aside for now.
Most sites will install trickle or fast charging - see table below or read this article on fast charging for a bit more detail.
Trickle charge can be installed for around $1,500 while fast charging is usually a big step up and may cost $20,000-$30,000.
Trickle charging runs off a standard electrical connection, like you would have at home or a small business site. Fast charging will require three-phase power and will use as much as 20kW of energy when in operation (about the same as six big split-system air-conditioners).
The transition to EVs is as inevitable as the ongoing and accelerating transition to renewable energy.
When the time is right for you to consider how to optimise and integrate EVs into your operations,
book a time to talk.
1. Schedule an appointment - discuss your needs with Alex and see the BOOM! platform.
2. Engage us to create a personalised, high-level plan based on your needs.
3. Agree, refine and execute the plan — together.