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TCO Calculation for Electric Vehicles

TCO Calculation for Electric Vehicles

Tuesday, July 25, 2017

[EXTRACT FROM "Corporate Mobility Breakthrough 2020"]*

TCO calculation doesn’t consider three more important factors where electric vehicles shine:


1. Maintenance: electric vehicles generally have lower maintenance requirements, less brake wear (due to brake energy recuperation), no fluid consumables to worry about and further maintenance intervals. This also results in less downtime (a crucial consideration at least for commercial fleets).

2. Avoidance of taxation and congestion charging: in cities like London and Milan, congestion charging and emissions-based taxation plays an important role in the overall TCO calculation; electric vehicles are generally able to avoid this taxation.

3. Driver behaviour: as one commercial fleet manager told me, “drivers in electric vans are simply happier. This also means I see less damage to the vehicle because when a driver is unhappy with a vehicle, he’ll drive it like it’s stolen. I don’t see that with the electric vehicles.”64


In addition to the battery technology improvements that are driving real economic benefits for electric vehicles, the political and social trends are also aligning for electrification.

McKerracher** adds, “we see policies – like fuel economy standards in the US – that are set to get much more stringent and push automakers towards hybridization or full electrification. Our analysis indicates that it will be very difficult to meet these existing standards without much more electrification… the future is largely electric.”65


64.Personal interview conducted by the author as part of a progenium study of fleet managers.


Source: Corporate Mobility Breakthrough 2020 by Lukas Neckermann with Tim Smedley  - p.44-45 – 2016


*The author, Lukas Neckermann is a thought-leader with whom the Corporate Vehicle Observatory shares the same interest in the future evolution of the company car and corporate mobility in general.

**Bloomberg New Energy Finance (BNEF) Head of Advanced Transport.


The Corporate Vehicle Observatory is a neutral knowledge sharing platform dedicated to all corporate fleet stakeholders whether they are private or public companies, fleet owners, fleet lessors, car manufacturers or media. The CVO was founded in 2002 by BNP Paribas and its subsidiary Arval, specialized in the full service leasing of corporate fleets.