Electric Vehicles Poised to Revolutionize Construction Industry, but Total Cost of Ownership Remains Key

By Editor


The adoption of electric vehicles (EVs) in the construction industry is on the verge of transformation, according to a recent report titled “Electric Vehicles in Construction 2023-2043,” released by IDTechEx.

. Several compelling reasons, including reduced noise pollution, improved air quality, enhanced precision, and ease of operation, make EVs an attractive choice for construction professionals. However, the decisive factor for their widespread adoption remains the Total Cost of Ownership (TCO).

TCO: A Pivotal Factor

The report suggests that the TCO of electric construction machines is soon expected to tip in favor of EVs due to current battery pricing trends. While electric machines have demonstrated comparable performance and capability to their diesel counterparts, the challenge lies in their endurance over long, demanding workdays. On average, electric machines fall short of running a continuous 8-hour day. To mitigate this, fast charging, tethering, or battery-swapping options are being explored. However, the size and cost of these large batteries are substantial and currently pose a significant premium.

Battery Pricing and Savings Potential

For the construction industry to embrace electric machines fully, the cost of batteries must decrease. In the automotive industry, the running cost of EVs has already surpassed the initial premium, largely due to falling battery prices. Yet, the construction sector lags in this regard. For example, even smaller electric construction vehicles, like 2-tonne excavators, can be up to twice as expensive as their internal combustion engine counterparts. However, the potential for TCO savings emerges when considering fuel consumption. Larger excavators, which can consume significant amounts of fuel, offer substantial savings. For instance, a 30-tonne excavator can save over $100,000 in fuel costs over its lifetime, making the transition worthwhile.

The Role of Retrofitting and OEM Production

The early adoption of electric construction vehicles often involved retrofitting conventional ICE (Internal Combustion Engine) machines with electric powertrains, which incurred significant expenses. OEMs can change the equation by manufacturing electric machines from the ground up, eliminating retrofitting labor and potentially making EVs cheaper to produce. Battery costs remain a key component, but as OEMs scale production, they should secure more favorable prices, benefiting the customer in the long run.

When to Expect Returns

The timeline for achieving net savings compared to diesel vehicles depends on factors such as vehicle size and battery pricing. IDTechEx’s report suggests that battery prices must fall below $400/kWh to ensure returns before the end of a vehicle’s life. As OEMs move towards series production, battery pricing is expected to decrease, potentially reaching automotive levels, where returns could be seen within 2-3 years, making the transition to EVs an attractive choice.

Maintenance and Future Potential

Maintenance costs are another area where EVs hold untapped potential. EVs have fewer moving parts, resulting in lower maintenance requirements. However, transitioning to electric powertrains opens opportunities for using electric linear actuators, further reducing maintenance and increasing efficiency. The introduction of linear actuators in 2nd or 3rd generation vehicles could expedite returns on investment and significantly increase lifetime savings.

The Road Ahead

While the construction industry is on the cusp of embracing electric vehicles, it is essential to recognize that these cost savings and cheaper electric construction machines will take time to materialize. OEMs are currently expanding their portfolios of first-generation electric products, with several years expected for machines priced at $300/kWh to enter the market, and even more time required to reach the ideal $100/kWh battery cost.

The transition to electric vehicles in construction represents a promising shift towards sustainability, reduced operating costs, and improved efficiency, provided that battery prices continue to fall and innovations in maintenance are embraced.

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