A case study of Rudy’s (Food Movers) Transportation Services, a Canadian courier company considering a 2023 Ford E-Transit electric van, highlights how leasing could mitigate upfront costs while leveraging long-term savings and incentives.
Program Overview
Fleet and Operations
- Vehicle: 2023 Ford E-Transit T350 (BEV) with 203 km nominal range, 68 kWh battery, and 7 m³ cargo capacity.
- Daily Use: Four round trips (64 km each) between Deer Lake and Corner Brook, Newfoundland, totaling 256 km daily.
- Charging Strategy: Fast charging (62.5 kW DC) triggered at 65% battery discharge, supplemented by overnight Level 2 depot charging.
Financial Parameters
- Incentives: Federal ($10,000) and provincial ($2,500) grants reduce the BEV’s upfront cost1.
- Loan Structure: 10% down payment, 5-year term, 7% discount rate, with a 30% salvage value after 7–10 years.
Innovative Procurement Strategy
Leasing could address Rudy’s key barrier—the BEV’s higher upfront cost—by restructuring cashflow and maximizing incentives:
- Reduced Capital Burden: Leasing spreads payments over time, avoiding the need for a 10% down payment and aligning costs with operational savings.
- Incentive Utilization: Federal and provincial grants could be applied to reduce lease payments, mirroring the loan model’s net-zero interest impact.
- Flexibility: A closed-end lease would allow Rudy’s to upgrade vehicles as battery technology improves, mitigating range limitations in cold climates.
Cost Savings and Benefits
Operational Efficiency
- Fuel Costs: BEV fuel economy (3.0 km/kWh) reduces energy costs to $0.94/hour for depot charging and $1.98/hour for fast charging, compared to $1.73/L for gasoline.
- Maintenance: BEV maintenance costs are 35% lower than ICEVs, saving ~$175/month.
- Cold Weather: Despite a 20% range loss in winter, optimized charging strategies limit downtime (40 minutes per fast charge vs. 34 minutes in warmer months).
Total Cost of Ownership (TCO)
- Over 10 years, the BEV’s lower fuel and maintenance costs offset its higher initial price, even with cold-weather penalties.
- Leasing could further enhance savings by deferring upfront costs and aligning payments with federal tax deductions.
Lessons Learned and Future Outlook
The Rudy’s case study demonstrates that:
- Leasing Mitigates Risk: Small fleets can avoid long-term capital commitments while testing EV suitability for their routes.
- Incentives Are Critical: Federal and provincial grants bridge the affordability gap, making leasing terms more favorable.
- Operational Adjustments Are Manageable: Cold-weather charging delays and route planning do not negate long-term savings.
For municipalities and small businesses, leasing offers a pathway to electrify fleets without sacrificing financial stability. Future efforts could integrate battery health guarantees into lease terms, further reducing uncertainty for adopters.
By adopting leasing models tailored to small fleets, organizations can replicate Rudy’s success—turning upfront cost barriers into manageable, incremental investments with lasting environmental and economic returns
See the FExLS version of this case study here.