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Lifetime cost savings

One company hoping to benefit from the Department for Transport’s Plug- in-Van-Grant (PIVG) launched in February is Smith Electric Vehicles Europe. The company develops, produces and sells zero-emission commercial electric vehicles that are designed to be an alternative to traditional diesel trucks. Smith has been producing its Smith Edison light commercial vehicle for five years, integrating an all-electric drive train and battery pack into a Ford Transit chassis.

“This grant will help our fleet customers to achieve a faster return on investment, making the economic case for electric vans as compelling as the environmental case,” says Smith Electric Vehicles Europe managing director Geoff Allison.

The company counts many local authorities and their service providers among its client base. With a range of up to 100 miles on a single charge, Edison is ideal for urban waste and recycling collection operations. In 2010, Kirklees Council in Huddersfield became the owners of the first all-electric LCV powered by the waste it collected. The vehicle picks up from litter bins in the town centre and takes it to an Energy from Waste (EFW) plant. The Edison is then recharged with electricity generated by the plant. Enterprise runs a similar operation at its EFW facility in Slough.

Manufactured in Washington, Tyne & Wear, the Smith Edison approved for the PIVG has a gross vehicle weight of just under 3.5 tonnes. It is available as a panel van and as a chassis cab suitable for a diverse range of bodies, including drop side, tipper, box and refrigerated box. The vehicle has a range of up to 100 miles on a single charge of its lithium-ion batteries, which can be fully recharged in as little as four hours.

Smith is one of seven manufacturers so far to have its all-electric light commercial vehicles approved for the PIVG. The Government has introduced this subsidy to incentivise procurement of commercial EVs – but will it succeed where the electric car grant has so far failed?

“The principal difference with electric LCVs compared to cars is that private car owners tend to see only the purchase price, while fleet operators measure the total ownership costs of LCVs over the entire life of the vehicle,” says Allison. “So when you factor in fuel costs and the new grant, these vehicles become economically attractive. PIVG shortens the payback period for commercial EVs, to a point where it becomes a real cost saver over a five-year lease.”

The Smith Edison starts from around £55,500, compared to a median £17,000 for a standard 3.5t diesel LCV. So it has a lot of ground to make up. But with diesel recently setting a new record high, the payback period is shortening. Based on travelling 26,000km per year, Smith Electric Vehicles calculates that its Edison should cost around £750 per month over a 5-year operating life, compared to just over £930pcm for the equivalent diesel vehicle. Factor in the London Congestion Charge and Edison represents a £400 saving per month over its diesel rival.

North of the border, there is an even more compelling case for making the switch to electric LCVs. The Energy Saving Trust in Scotland is offering interest-free loans of up to £50,000 to help businesses procure EVs – including those approved for the Plug-In Van Grant. And Transport Scotland has just concluded a second round of the Low Carbon Vehicle Procurement Support Scheme, which provided funding for every area partnership to purchase EVs, including commercial vehicles.

Investment in EV development - particularly for traction batteries – has soared over the past decade from millions into tens of billions of dollars per annum. With technology moving forward so quickly, is there a danger that fleet managers will buy EVs now that will be obsolete in three years?

“EV technology will continue to improve the key performance characteristics of LCVs, such as range, speed and payload,” said Geoff Allison. “But the value of an EV really lies in the diesel it doesn’t use – and that will only increase as fossil fuel prices continue to rise.”

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