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Cost of ownership considerations: Electric vs ICE Forklifts

Wednesday, 30 July 2008 ( #371 )
Jeff Bowles
Jeff Bowles
There are a number of factors which determine the appropriateness of forklifts. Jeff Bowles considers some of the cost aspects in the internal combustion engine (ICE) versus electric debate. Today, when rising fuel prices have taken centre stage, the question about whether to convert from internal combustion engine (ICE) to electric forklifts is receiving more consideration than ever before. Electric forklifts have long been considered to be a very clean, or green, alternative to their ICE counterparts. However, historically inexpensive fossil fuel prices have helped to keep overall ownership costs of ICE trucks comparable with electric trucks, due to the typically lower acquisition cost of the equivalent ICE forklift. Now, however, fleet owners must take a much more critical look at such expenditures in order to determine the most cost-effective solution for their operations going forward. Initial Costs The acquisition costs of an electric forklift fleet can be moderately to substantially higher than an LPG or diesel truck fleet, whether as a fleet replacement or in a new location. For an equivalent truck (eg. a 5,000 lb capacity sit-down counterbalance truck), the electric vehicle will typically be moderately more expensive than an LPG or diesel vehicle (perhaps by a few thousand dollars). However, one must also factor in the cost of a battery (or batteries), battery charger and other related equipment (battery storage equipment, electrical infrastructure, etc.). As a result, the initial cost of an electric forklift fleet can be substantially greater than that of an ICE fleet. As such, to justify the acquisition cost of an electric truck fleet, it is important to assess the expected operating costs of the two different truck types. Operating Costs There are many application-based factors that will affect overall operating costs. However, it is also possible to conduct a reasonably accurate cost analysis without drilling down into too much detail. The two primary foreseeable costs will be fuel/energy to operate the fleet and maintenance costs to keep the fleet running properly. The actual industrial kWh rate can vary quite a bit - even within individual markets. However, as an example, a fleet user in Virginia may be paying about 6 cents per kWh for electricity and, depending on the efficiency of the charger used, a 48 kWh industrial battery will cost this customer just under $3.00 to charge from 20% to 100% (again, this cost will vary, based on the relative cost of electricity). In contrast, it may cost more than $28 to fill a 7 gallon diesel forklift tank. The average cost to fill a 33 lb LPG tank is nearing $25. As such, the energy cost for the electric truck will typically be between 10%-15% of the cost of the ICE alternative. If that operator uses his forklift for two shifts per day with average consumption of approximately one battery charge, one tank of diesel or one LPG tank per shift, his approximate fuel cost for a 250-day work year would be $1,500 for the battery-driven forklift, $14,000 for the diesel forklift and $12,500 for the LPG version. As such, any significant differences in the truck acquisition cost can be greatly diminished within a year, especially for the high-hour applications. Even if the truck in question is exhausting only one tank or battery per day, the relative energy cost will be $750 vs $7,000 and $6,250 respectively, per forklift. Maintenance costs can also be an important component in the operating cost calculation. Because an ICE truck has more moving parts than an electric truck, as well as the drive oil and filter to be changed, it can typically require twice as many scheduled maintenance intervals as an electric equivalent. In addition, based also on the factors listed above and the associated increase in lubrication points and scheduled checks, the time required for each service interval is at least 1.5 times longer for an ICE truck than for an electric truck. As such, the expected scheduled maintenance costs, given labour, materials and overall frequency can be three times higher - or more - for the ICE than for the electric. In our two-shift example above (approximately 2,500 running hours per year), this may mean an annual maintenance cost per electric truck of around $500 while an ICE forklift could cost around $1,500 per year. The total number of annual hours that the forklifts are being used has a huge influence on the overall ownership costs because of the huge discrepancy in fuel costs (electric vs ICE), as well as typical maintenance costs. In applications where a forklift is operating more than 1,800 hours per year, the difference in the acquisition costs of an electric vs ICE model can be made up in less than two years. This may not be the case if the forklift is used for fewer than 1,000 hours per year. Social Costs Because electric forklifts largely operate without emissions, they are also a clean alternative to ICE forklifts. Recent and upcoming emissions regulations have required ICE forklifts to produce much less harmful emissions than in the past. However, they cannot eliminate them. In some cases, operating an ICE fleet can even require additional expenditure to maintain clean air or even cool air in warehouses. There are also incentives available for switching to cleaner forklift technology such as electricity. Examples include state programs in California, Texas and North Carolina. In addition, the utilisation of an electric forklift fleet can also be an important part of an initiative to attain LEED (Leadership in Energy and Environmental Design) certification for a specific location, an important measure of sustainability and minimization of environmental impacts, which can also lead to state and local incentives. Other Considerations Apart from the issue of operating costs, it has historically been widely believed that an electric forklift is not suitable for some typical ICE applications, including outdoor usage. However, in the US, there are certain electric forklifts which have been designed for indoor/outdoor usage (most of these electric pneumatic designs are derived from Europe where outdoor travel is common). Of course, as applications and elements become more severe, additional protection must be considered for electric trucks, including installation of cabs and sealing of critical electrical components. In addition, there are some higher voltage electric sit-down forklifts with performance characteristics that can even exceed those of the market-leading ICE cushion and pneumatic-style forklifts. So, in this era of high fuel costs, it is not necessary to take a back seat on performance by using an electric truck in many cases.
  • Jeff Bowles is a product manager at Jungheinrich Forklift Corp in Richmond, VA. He is a regular contributor to the Discussion Forums.