Councils want to shift from diesel to electric outdoor landscaping and cleansing equipment to reduce their carbon footprint and meet net zero targets, among other reasons.
But the upfront cost of electric equipment often deters decision-makers who are working with tight annual budgets. Many people mistakenly believe the cost of electric vehicles and equipment is now peaking and will soon fall, so they’re waiting for that tipping point before investing in electric. However, realistically, costs are likely to stay the same or continue to rise.
And because a fleet budget is separate from a maintenance budget, it can be hard to negotiate beyond departmental silos to make the numbers work in favour of purchasing electric equipment. But by delving beyond the typical 12-month cycle councils operate on, opening financial communication between departments, and using the Total Cost of Ownership (TCO) framework, you can create a favourable and practical business case for the shift to electric.
Here, TCO refers to the total cost of ownership of a vehicle such as a commercial ride-on mower or street sweeper. It factors in all expenses related to owning and using the vehicle throughout its entire lifespan. TCO covers purchase, maintenance, fuel, replacement, and disposal costs.
For greater detail, explore our related blog post: Beyond the price tag: Exploring the true cost of ownership.
This is a common situation:
By considering the TCO figures for the entire life cycle of electric equipment compared to machines with an internal combustion engine (ICE)—from purchase to disposal—fleet and maintenance departments can collectively build a business case for going electric.
Given the maintenance and running costs of electric equipment such as mowers and street sweepers are significantly reduced compared to their ICE counterparts, a significant portion of the maintenance budget could be moved to the fleet budget to fund the higher initial purchase cost of the electric equipment. By figuring out the breakeven point, you’ll have data you need to complete the financial component of your business case.
The best time to start preparing a business case is early in the new calendar year. This ensures there’s enough time to prepare the case before departmental budget allocations are locked in.
One of the best ways to unify the fleet and maintenance budgets is to communicate directly with council’s Director of Infrastructure. This person will typically have visibility of both budgets. By keeping them updated with your plans and the numbers, and sharing the TCO figures as you work them out, they will be in a better position to make an informed decision when it comes to budget time.
Delta FM is the facilities maintenance arm of Compass Group, which employs 30,000 people in Australia.
Nick Coleman is a regional manager within Delta FM, providing maintenance services to 10 public schools in Queensland as part of public-private partnership (PPP). And because it’s a partnership with government, Delta FM needs to help them reach their sustainability goals.
“We were looking at changing over to battery products by 2025. EcoTeq approached us and we met for a demo. We then bought an electric mower to trial for 12 months and fell in love with it. We bought 8 more and have 10 more arriving soon.”
Nick says he built a business case for the switch to electric by comparing costs and looking at the total cost of ownership over a 5-year period and taking depreciation into account. After creating a lifecycle cost analysis sheet, Nick quickly discovered that over the 5 years, EcoTeq’s Rival mower would be $23,500 ahead of its diesel-powered counterpart even with the higher initial outlay to purchase the electric mower.
“We worked out that with the running and maintenance costs, we’d be saving $15.57 per hour with the electric Rival mower, says Nick. “On average, our diesel mowers use 7.2 litres per hour. That’s $13.86 per hour. Multiply that figure by 16 hours and that’s a cost of $222 in diesel per week. And how much better is it to not be pumping all that diesel pollution into the air?”
“We didn’t need to budget for any infrastructure modifications, either. We didn’t have to install 3-phase or anything like that. We bolted an external charger to the wall, which plugs into a regular socket,” says Nick.
While maintenance and running costs take centre stage in a TCO analysis, there are other factors to consider that show electric equipment can be far more efficient and productive than ICE machines.
Consider how to include the following benefits in your business case.
We’ve developed an independently reviewed TCO calculator that makes it easy to calculate the TCO of electric and ICE maintenance and cleansing equipment. We’ve got the data you need to help you produce realistic figures for your business case.
Our TCO calculator factors in maintenance costs, fuel costs, running costs, operational hours, and machine performance and output.
The benefits beyond the typical 12-month budget cycle will be obvious after just a few clicks.
We can help you run through the numbers to work out your total cost of ownership. To request a walkthrough of our calculator and see what long-term savings going electric can bring your organisation, contact us.