“The Plug-In Premium” – Myth or Reality?
Will electric vehicles and construction equipment cost you more … or less than their internal combustion counterparts?
Being kind to the planet means riding roughshod on your checkbook, right? That’s the gist of what some call the “plug-in premium,” where making the switch to electric vehicles or construction equipment includes paying more for these cleaner and more practical replacements.
After all, that’s status quo for anything related to environmentally-friendly contributions. Being responsible is an expensive proposition. Or is it?
A costly necessity?
There’s no argument that we must transition away from the use of fossil fuels. Internal combustion engines for construction equipment using gasoline or diesel have multiple negative impacts on a business. Fuel costs often take the top spot in operational expenses, and you can’t cut back unless you want to lose productivity and revenue. Even worse, the price of gasoline and diesel is a moving target, making precise budgeting impossible.
Then there’s the cost to your crew. Emissions from internal combustion engines and humans don’t mix. It means you’ve got to find a way to keep the two separated, or at least institute expensive safety precautions. Construction equipment indoors? Ventilation is a major cost and an operational challenge.
It’s not just the stuff your crew can pull in to their lungs. Internal combustion engines—especially when they’re under load—are loud. Excessive noise has been proven to contribute to heart disease. It can produce stress and depression, and even lower testosterone levels.
So, whether we’re thinking about the environment or our crew, we should pay this “plug-in premium.” But, wait a minute? Is there really a premium?
Patience is a virtue
Brand new construction equipment powered by rechargeable batteries is going to cost more than a similar piece of equipment powered by a traditional combustion engine. There’s no getting around this. It simply costs more for these replacements. You’re paying for innovation and new technology.
Which likely makes you ask, “Where’s the cost savings in that?”
It’s not immediate. However, when measured over time, it becomes an exponential savings. If you purchase a piece of construction equipment powered by a traditional internal combustion engine, you will—for the life of that piece of equipment—pay the cost to fuel it. The price tag will be less up front. The price you’ll pay to fuel it and keep it operating will never cease. You’ll be at the mercy of volatile pricing based on economic factors beyond your control, and the complicated nature of internal combustion engines means that you’ll pay a gradually increasing amount of money to maintain and repair the equipment.
Your alternative, the new battery-powered piece of construction equipment, will carry a higher price tag. But stop and think about your fuel costs for the past month. Pretend that it will remain steady and not rise, and multiply that monthly figure by 12. Meanwhile, the cost to recharge the battery on your new—and initially more expensive—piece of electric construction equipment for a full day of operation will cost a small percentage of just a single gallon of gasoline or diesel fuel.
Pay now, or pay later
In all fairness, there is a “plug-in premium,” but it’s not the detriment that most increased costs impart on businesses. Using battery-powered equipment on your jobs will be more cost effective over time. You’ll pay more right now for it. But you’ll make that payment only once. With it, you’re purchasing freedom from the otherwise never-ending cost of fuel.
So, if you’re comparing nothing but price tags, construction equipment with gas or diesel engines wins. However, if you’re comparing operational expenses, as well as enhanced safety for your crew – and the underlying commitment to be eco-responsible – there’s a clear winner.
Talk is cheap. Figure out the actual cost savings for yourself. Use this calculator to see how quickly a piece of battery-powered equipment like our skid steer can pay for itself.