Managing a fleet of vehicles for a company involves many financial challenges, particularly when it comes to total cost of ownership (TCO). This key indicator measures all the costs associated with leasing and operating a vehicle. For a company managing a fleet, optimizing TCO is very important to reduce expenses, improve profitability and promote ecological choices such as switching to electric vehicles.
What is TCO and why is it important?
TCO is a comprehensive measure that encompasses not only the cost of leasing, but also operating costs such as maintenance, fuel or energy, as well as vehicle depreciation. In a context of energy transition and CO2 emissions reduction, it is essential for companies to understand these costs over the entire life of a vehicle. This enables them to optimize investments and better plan the evolution of their fleets.
The acquisition costs of an electric vehicle and a combustion-powered vehicle are not comparable, but neither are their running costs! So, to compare the real cost of each, it makes sense to use the TCO method. As energy costs are much lower for an electric vehicle, the more it is used, the more advantageous the TCO will become over the entire period of use.
The benefits of electric vehicles in terms of total cost of ownership
In terms of TCO, electric vehicles offer major advantages over combustion-powered vehicles. Firstly, although the cost of leasing an electric vehicle may be higher, operating costs are significantly lower, particularly in terms of energy and maintenance. Electric vehicles don't require conventional fuel, and their simpler mechanical systems mean less maintenance. What's more, the more kilometers they cover, the more competitive the TCO of electric vehicles becomes. Indeed, the more an electric vehicle is driven, the lower the total cost of ownership thanks to energy savings.