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Photo: Jacek Nowakowski

When will buying electric trucks pay off? IVECO representative offers his TCO estimations

For the total cost of ownership of electric vehicles to be equal to diesel ones, “there'd have to be one more element favouring the former," argues argues Jacek Nowakowski, business development manager for alternative drives at IVECO Poland & Ukraine.

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Dorota Ziemkowska-Owsiany: You mentioned in one of our previous interviews that a lot of support tools are needed to bring the costs of owning and using electric and diesel trucks closer together. What does the TCO (total cost of ownership) relationship look like today?

Jacek Nowakowski, business development manager for alternative drives at IVECO Poland & Ukraine: We are discussing the current situation where a diesel vehicle costs on average about PLN 100,000 (€23,150). Meanwhile, an electric truck is three times as much.

Additionally, there are operating costs. This is new technology, so it is challenging to estimate today which elements will need to be replaced in this vehicle and how often. And we must remember that an electric vehicle weighs approximately 4 tonnes more, which may result in faster wear of some components.

Moreover, there are the prices of energy carriers. Today a megawatt-hour of energy in Poland can cost up to PLN 2,000 (€463). This translates into the price of one kilowatt-hour at PLN 2 (€0.463). An electric vehicle, if driven with a trailer, can consume between 120 and 140 kWh per 100 km. This gives us the cost of driving 100 km at up to PLN 280 (€64.82).

In the case of a vehicle powered by a diesel engine, which consumes approximately 26 litres of diesel oil per 100 km at a price of PLN 5 (€1.1575) per litre in purchase contracts, the cost of driving a similar route is currently even half as much.

Of course, in the case of diesel, there is also the cost of AdBlue, but it is not high enough to make up for the difference. Insurance still needs to be calculated. After all, the vehicle must be covered by third-party liability and comprehensive insurance, and the latter depends on the value of the vehicle. So you can see the difference.

We calculated that if the system of subsidies for categories N2 and N3 proposed by the Ministry of Climate and Environment together with the National Fund for Environmental Protection and Water Management was introduced, and if the buyer used the entire PLN 750,000 (€173,625) subsidy proposed for the purchase of electric cars, taking into account not only the purchase itself but also the above-mentioned costs of ownership and use, the total cost is still not equal.

For the TCO of electric vehicles to be equal to that of diesel vehicles, there would have to be one more element favouring the first vehicles. I am thinking here about road tolls. Meanwhile, we still do not know how much they will be in Poland because work on the regulations in this area is still ongoing.

I presume some conclusions came be made here from Germany, where higher tolls were introduced in December last year?

Theoretically, yes, but remember that until the end of 2025, zero-emission vehicles will be exempt from fees in Germany. Thereafter, their users have to pay 25% of the applicable rate. As for the current latest rates of the German Maut, today, for example, for a Euro 6 diesel vehicle, the fee is 34.8 cents per kilometre. At today’s euro exchange rate, it is approximately PLN 1.5. Meanwhile, the toll in Poland is approximately 25 cents per kilometre.

However, if we assume a rate of PLN 50 (€11.575) per 1 km, then assuming that electric vehicles would still be exempt from fees for 1.5 years, and then they would pay 25% of the current rate, after a few years, the balance could be at the level of using a diesel truck.

Of course, there is still the issue of electricity costs, but analyses show that in Poland, as the share of energy from renewable sources in the energy mix increases, prices will begin to fall. This will certainly be particularly important for enterprises that invest in their own energy sources.

Of course, this also requires the development of a public fast-charging network with a capacity of at least 350 kW. Today we do not actually have such publicly available chargers. But you can also count on the fingers of one hand the number of electric trucks with a gross vehicle weight of over 16 tonnes registered in Poland. Last year, for every 32,000 HGVs, there were 41 units with electric drive.

This share is relatively small by European standards. Only thing in particular interests me – your calculations show that from a cost point of view, it is not profitable to buy electric vehicles today, which is why subsidies for this type of purchase are so important. Therefore, the question is whether the Polish state should financially support the purchase of electric vehicles today?

Electric, battery, or hydrogen vehicles are definitely one of the important paths to decarbonisation, and sustainable development is one of the strategic goals of our company. We not only develop our products with low-emission drives but also actively participate in many initiatives to reduce emissions.

One of such initiatives is H2Accelerate, under which we reported already in September 2022 that if the market becomes mature and specific funds are allocated to support purchases, in the first phase of the development of hydrogen and electric vehicles, then the appropriate economies of scale necessary to make the use of these vehicles profitable. This will allow both truck manufacturers and charging station operators to develop.

And it’s good that the Polish government plans to allocate one billion zlotys (€231.5 million) for subsidies for the purchase of vehicles and two billion zlotys (€463 million) for the construction of public charging infrastructure with a minimum capacity of 350 kW.

We must remember that the Fit for 55 package is in force, which assumes reducing greenhouse gas emissions, including carbon dioxide, by 55% by 2030. We will see what will happen in June (we are talking about the elections to the European Parliament – editor’s note), but for now, there is no indication that the course of changes will change.

Therefore, in our opinion, this market definitely requires support because the costs of decarbonisation changes cannot be passed on only to entrepreneurs. Especially since we are talking about a sensitive segment of goods transport, in which each change causes an increase in freight costs, which in turn affects the prices that the final customer will have to pay for the products.

Sure, but why should the state support electric vehicles if today they are not so ecological from the well-to-wheel perspective, an approach that’s considered appropriate by your company.

This is true, but we have to start somewhere. It seems that as the number of vehicles increases, so does consumer awareness. And this will lead to a situation where more and more vehicles will be charged with energy from renewable sources. We are already observing a positive trend when it comes to the Polish energy mix. In 2022, 70 percent of energy came from coal; last year, it was 63%.

Of course, this is still a lot, but let’s also remember that Polish transport companies, which are the largest force in Europe, carry out their operations throughout the European Union. And there is much greater access to green energy in many other European countries. Of course, not all vehicles can be used for international operations due to the limited range of an electric vehicle, as well as the lack of sufficient charging infrastructure.

Electric trucks are by no means…

Yes, but we know that when ordering transport from Polish transport companies, customers require that some part of their fleet be low-emission. Of course, customers also use liquefied natural gas (LNG) vehicles, including bioLNG, promoted by IVECO.

And let’s remember that every IVECO gas vehicle produced since 2018 is adapted to be powered by biomethane, which is a type of renewable energy source and allows you to reduce CO2 emissions by up to 121%.

This is what I was aiming for when asking about the sense of subsidising or promoting electric vehicles. Why shouldn’t countries support the purchase of other types of truly zero-emission vehicles?

Unfortunately, we must remember that the European Union itself is currently based on the tank-to-wheel calculation methodology. We are trying to change this, i.e., show the entire value chain. In the case of Poland, gas vehicles have lower emissions than electric vehicles, taking into account the carbon dioxide emissions produced when producing kilowatt-hours of energy necessary to power electric vehicles.

Therefore, we are participants in talks both at the Ministry of Climate and Environment and at the National Fund for Environmental Protection and Water Management. We convince our interlocutors to choose gas-powered HGVs, which have been successfully used in long-distance transport for several years, due to, among others, a range that in IVECO S-Way vehicles of the 2024 model year has a range of up to 1800 km.

Moreover, there is a ready-made refuelling infrastructure. In Europe, there are over 700 refuelling stations adapted to fuel with biomethane. The first biomethane installations are being built in Poland, but in order to be able to supply this biomethane to vehicles, changes are necessary to the Act on biocomponents and liquid biofuels. Today it does not mention biomethane as a fuel for cars, nor does it mention HVO.

As you can see, there are still many changes ahead of us. We keep our fingers crossed that our national multi-energy company will finally launch the first commercial installations and deliver bioLNG.

Finally, the company announced that in 2025 they would deliver approximately 5,500 units of this gas to the market. We are waiting for this; then we could refuel part of the fleet of 3,500 LNG vehicles registered in Poland with this fuel. In conversations with us, carriers admit that they receive a lot of enquiries about transport using biomethane vehicles.