A cost-effective option to reduce total cost of vehicle ownership

For some operations, hybrid electric vehicles offer acceptable ROI reduced operating costs.

In the example, the EV costs 12 times the price of the HEV, but only provides five times the fuel savings. The batteries are just too expensive right now to generate an attractive return on EVs or PHEVs in a fleet setting without government subsidies.

Eventually, battery pack costs may fall and make the investment for PHEVs and EVs more attractive.

Incremental Fuel Economy Improvements Matter

There are a number of cost-effective ways to increase fuel economy, such as vehicle downsizing, reductions to driver idling and initial deployments of hybrid vehicles.

For example, replacing a 10-mpg vehicle with one that averages 12.5 mpg reduces fuel consumption by 20 percent. At first glance, it doesn’t look like a big increase, but aggregating incremental fuel economy gains can make a huge impact on the bottom line.

Reinvesting the savings to deploy more efficient vehicle alternatives is sound business strategy, and it creates a positive cycle of reducing fuel use, reducing fuel cost volatility and creating more savings.

Justin Ashton is the vice president of business development for XL Hybrids, a company that has developed a hybrid electric conversion technology for Class 1 through 3 commercial vans and trucks. www.xlhybrids.com.

We Recommend