Looking beyond the 12-month budget cycle
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.
What is TCO?
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.
Collaborating with internal stakeholders
Turf wars between fleet and maintenance
This is a common situation:
- Fleet wants to buy electric equipment but doesn’t have enough budget to cover the initial outlay upfront.
- Maintenance has the budget to maintain fleet’s current equipment and relies on fleet for new equipment purchases.
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.
When to start planning
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.
Who to pitch the business case to
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.
Case study: Delta FM
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.
The less obvious cost benefits of going electric
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.
- Increased operational hours: Noise pollution and noise complaints are a constant challenge for local councils and contractors, especially in residential areas. The quiet operation of electric equipment means operators can provide essential mowing or sweeping across longer hours. These extended operating hours enhance productivity. Learn more about how low-noise operation of electric equipment can reduce noise complaints and increase productivity.
- Reduced operator injuries: Regular and frequent exposure to high levels of vibration—such as those produced by diesel equipment—can lead to permanent injury. Vibration injuries are a hidden ICE equipment cost. Even non-permanent injuries can reduce the productivity of a maintenance team. Fewer diesel machines can lead to fewer injuries and substantial savings.
- Less downtime: Electric equipment is much easier to maintain than ICE equipment. There’s no greasing required during or at the end of a shift. The service requirements of electric equipment are also much more infrequent. At the end of their shift, operators just need to clean the deck and plug it in to charge. With no internal combustion engine and no hydraulics, there are fewer points of failure and less chance of downtime from breakdowns, meaning more uptime and greater productivity.
- Greater operational efficiency: With less daily maintenance (like not needing to apply grease to clean filters) operators can add an extra hour of mowing to their day when working with machines like EcoTeq’s Mean Green range of commercial ZT mowers. Due to the high efficiency of electric motors, electric equipment will generally outperform their equivalent diesel machines. Electric sweepers see 20% to 30% greater suction and mowers see up to 30% faster ground coverage through all grass conditions. Operator comfort—from the reduction in vibration and noise—means operators can complete longer shifts and require fewer breaks. Again, electric equipment is the leader in operational efficiency.
- No hydraulic messes to clean up: Hydraulic fluid spills and leaks from ICE equipment, the environmental impacts and injury risks this poses, as well as the time and cost of cleaning up such spills, are challenges that maintenance crews face. With electric street sweepers where the only hydraulics are in the hopper (and only under pressure when dumping), there is more operational uptime and no need to pull crews off core maintenance tasks to clean up a hazardous hydraulic leak. Learn more about the burden of hydraulics.
Introducing the EcoTeq TCO Calculator
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.
Run the numbers with EcoTeq
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.