The economics of diesel vehicles have become increasingly unstable, says Everlectric chief commercial officer Paul Plummer.

“For years, the debate around electric vehicles (EVs) in South Africa has focused on whether the technology works. That question has largely been answered.

“The real question now is this: why would fleet operators continue to rely on a cost base in their business that is fundamentally unpredictable?”

Fleet solutions group Everlectric currently manages more than 200 EVs across multiple commercial fleet clients in South Africa.

Fuel prices are no longer a predictable input, says Plummer.

“They are a moving target, driven by global events that have nothing to do with your business, your routes or your customers.”

At lower diesel prices, EVs – typically still more expensive that internal combustion engine vehicles – require higher use to make sense, explains Plummer,

“A few years ago, you needed to be running relatively high monthly kilometres before the numbers started to work in your favour.

“That is where much of the early hesitation to migrate to EVs came from.”

But, as diesel prices continue to rise, that break-even point is dropping rapidly, notes Plummer.

“At around R22 a litre – roughly where the diesel price sat during more stable periods – an electric one-ton-equivalent vehicle typically becomes competitive once you operate it approximately 3 000 km a month.

“When the diesel price moved to R28 a litre, the picture changed significantly.

“That same vehicle now starts to make financial sense at closer to 2 000 km a month.

“At that point, you are moving from mere good-use cases to mainstream fleet operations,” says Plummer.

Push diesel into the mid-R30s, which is well within reach in the current environment, and the economics change again, as the break-even point drops to well below 1 000 km a month.

“At that level, almost any consistently used electric commercial vehicle starts to make sense,” says Plummer.

It is not that EVs have become cheaper, he adds.

“As fuel prices rise, the number of kilometres you need to justify an EV falls sharply.

“And, the higher the volatility, the faster that crossover happens.”

On a typical urban route running around 4 000 km a month, the cost difference is  difficult to ignore, believes Plummer.

“At current diesel price levels, fleet owners can save several thousand rand per vehicle per month. If fuel prices continue to increase, however, those savings become even more compelling.”