You’re a small fleet operator – is now the time to go electric?

The increased focus over the last few years on reducing emissions is important as the impacts of climate change to preserve a liveable planet for generations to come. The Paris Agreement has been put into place to reduce emissions by 45% by 2030 and reach net zero by 2050 by governments across the globe.

Yet it’s not all about the federal and state governments and what you as a business can do to start focusing on doing what is possible to help reduce emissions. We’re all focused on practising more sustainable outcomes, and for small fleet fleet-based businesses, going electric or considering alternate fuel sources is one great way to lower costs while helping the planet.

In this article, we outline why going electric is a viable option for smaller operators and some of the benefits, including cost savings, a more comfortable working environment for drivers, and even the ability to operate in zones where there are curfews or emissions restrictions.

Let’s dive in and see if an EV could be right for you and your business.

Small operators are the backbone of Australian road freight

Small and family businesses making up 98 per cent of all trucking operators in Australia. A recent report from the Electric Vehicle Council, Electric Trucks: Keeping Shelves Stocked in a Net Zero World, found that 70 per cent of these operators have only one truck, compared to less than 0.5 per cent of operators with more than 100 trucks in their fleet.

Significantly, the report also found that fuel accounts for around 20 per cent of short-haul operators’ costs and that smaller businesses have difficulty passing on increases in the volatile cost of fuel to their clients.

Short-haul transport makes up a large proportion of all road freight in Australia, with deliveries in cities and urban areas accounting for between 30 and 40 per cent of all journeys, and it’s in this market where many smaller players work.

However, the urban market comes with its own challenges. Many cities around the globe are creating zero-emissions zones, including Sydney, where the NSW government has proposed banning polluting vehicles in areas including Blackwattle Bay and Central. Other states have plans to do the same in their major cities, meaning that small operators who work in these zones won’t have access unless they embrace zero-emissions trucks. Some urban areas also have truck curfews designed to minimise noise and traffic, restricting the hours when operators can do their deliveries.

This can include anything from local stock delivery to restaurants and cafes and online order package couriers right through to local services—plumbing, electricians, and more—that would need to utilise low-zero-emission vehicles to do their work in these areas. Having vehicles in your arsenal means you can service all customers now and into the future.

As EVs and low-emission vehicles lack a noisy, polluting engine, you can operate in these curfew areas and zero-emissions zones without breaking the law.

For small operators who work in these zero-emissions and curfew zones, going electric isn’t an option—it’s a business imperative. The good news is that EV costs, including purchase and running expenses, are dropping fast and will continue to do so as the technology matures and more vehicle options come to market.

Achieving cost parity

A recent study commissioned by the Netherlands Organisation for Applied Research (TNO) examined the costs associated with electric trucks compared to those powered by fossil fuels. It discovered that within ten years, all new electric freight trucks – including long haul – will be cheaper to run than diesel trucks while driving just as far and carrying the same amount.

While that’s still some way off, for small operators the return on investment from investing in an electric fleet today is compelling. The same study found 70 per cent of those EVs currently on the market are cheaper to own and operate than their diesel equivalent while still fulfilling operational needs.

There’s an important caveat, however: the TNO study looked at Europe, which is a much smaller geography than Australia. Despite this limitation, the report’s findings should be generally applicable given comparable urban densities and conditions between major cities in the EU and locally. Along with this, it’s also important to note that in Australia, a significant proportion of road freight, as the Electric Vehicle Council report found, is in cities and urban areas.

This means that, for many small fleet businesses, going electric is a viable option when considering their type of work and the areas they operate in.

The Australian market – a broad overview

Australia is still a young market for electric trucks. There are constraints on supply to contend with, as some manufacturers prioritise more mature geographies like the US, the EU and parts of Asia. Charging infrastructure also remains an issue, but for short-haul operators whose fleets do limited distances in urban areas before returning to base, installing chargers and replenishing batteries overnight when the trucks aren’t in use is an option.

It also means smaller operators and those making short-haul urban deliveries don’t need to rely on public infrastructure, which is primarily aimed at light-duty private vehicles rather than trucks.

The domestic electric truck market is growing, with the Truck Industry Council’s (TIC) T-Mark sales data showing a total of 367 low and zero-emissions trucks were sold in 2023. This represents a four-fold increase in sales over the previous year when only 99 low and zero-emissions trucks were sold.

The TIC notes that this was a significant year-on-year increase not seen by any other truck sector or vehicle type. Furthermore, 83 per cent of those sales were light-duty trucks and vehicles primarily used for city and urban deliveries, while 16 per cent were medium-duty trucks, again destined for metro roles.

 

For smaller operators, going electric is something that’s feasible today and not a future concern. Vehicle costs are coming down, charging, if done at the base, is not an issue and range anxiety is no longer an important consideration given that most work is done in urban areas and cities, especially considering the growing network of EV chargers available. While there are still supply constraints, more options will come onto the market as Australia matures in its EV pathway, increasing choice and competition. For small operators, now is the time to look at going electric.

Want to start your business’s sustainable EV journey? Talk to your Teletrac Navman representative about how we can help you make the leap into a sustainable, zero-emissions future.