Costs from real experiences

Costs from real experiences

For a sound analysis for the economic optimization of a fleet, one needs a comprehensive and correct overview of costs that are expected throughout a vehicle's lifetime. During recent years, a general understanding of Electric Freight Vehicle (EFV) related costs could be established, but fleet owners still feel insecure about the life cycle costs and are experiencing major problems in calculating Total Cost of Ownership (TCO) for EFVs (Lebeau, 2019). Difficulties in obtaining reliable and sound information on costs of maintenance and resale value are at the heart of these insecurities, but also technical uncertainties related to the use of EFVs add to them. For example, the quality and the guaranteed life-time of the battery is a crucial factor for a correct TCO analysis. Current guarantee schemes for the batteries by manufacturers are not deemed as sufficient. Furthermore, advanced information on maintenance costs of electric vehicles and on the value for used EFVs is needed (Klauenberg et al., 2019).

The use cases provided in the following contribute to close the existing gaps. They illustrate findings of a case analysis and explain various stages of TCO calculation, giving information about and providing a guide for a TCO calculation with the currently existing information. Further it is described how necessary assumptions can be made in case of absence of data.

TCO Comparison of diesel and battery electric vehicles for urban last mile distribution

The company of this use case is a logistics operator of a major e-commerce company in Turkey. The TCO was calculated for a fleet of 20 vehicles used for urban freight operations in İstanbul. The fleet contains four different vehicle types: one electric (E1) and three conventional (D1-D3) vehicles. The capacity, the driven distances as well as driven times and stops of each vehicle are given in Table 1.

Table 1 - Vehicle characteristics

Source: own calculation by ITU and Borusan

All four electric vans of the case company were initially conventional equipped with combustion engines. Due to high import taxes on new vehicles in Turkey and the fact that no electric vehicles are produced in Turkey, the company of our case study had these vehicles converted to Battery Electric Vehicles (BEV) by a local specialist (BD Oto). Figure 1 illustrates the total acquisition costs of the four different vehicle types of the company in present value. These costs include VAT (value added tax, 18 per cent in Turkey) and possible special reductions or promotions offered in connections with the acquisition and conversion of the vehicles. The unit is cost(€)/capacity(kg) of the vehicles, because all four different types of vehicles have different loading capacities, both in terms of weight and volume.

Figure 1 - Acquisition cost per capacity (€/kg)

Source:  own calculation by ITU and Borusan

The usual duration of ownership of conventional vehicles is about 15 years in Turkey (Source: TSI, 2019), and therefore 50% higher compared to the expected 10 year duration of BEVs (Camilleri, 2017). Accordingly, expected ownership period is taken as 15 years for diesel vehicles, and 10 years for electric vehicles.

All the company’s vehicles’ batteries are lithium based. The battery pack is the most expensive component of the price of the electric vans. However, battery costs decline steeply as production volumes increase. According to Bloomberg New Energy Finance (2019), industry-weighted average battery pack prices have already fallen to $156 (approximately ₺1000) per kWh. This is over 13% lower than the 2018 average, and around 80% lower than 2009 prices. Prices are expected to drop further, with $100/kWh potentially being reached by 2023 (Henze, 2019).

Studies show that the expected number of charging cycles for lithium-ion batteries is around 1,000 cycles, before their capacity drops below 80% (Burke and Miller, 2013). The evaluated company fully charges batteries 4 times per week on average, which totals to around 208 charges per year, or a battery lifetime of approximately 4.8 years, which generates an additional battery replacement cost if a company uses their BEVs beyond this period. Taking into account the average mileage of 24,638 kilometres per year, this amounts to a battery lifetime of 117,000 kilometres.

Current prices of the fuel or electricity in 2020 are €0.836 per litre for diesel and €0.119 per kWh for industrial electricity including VAT (EPDK, 2020). Based on average prices of the previous five years, an annual increase rate of energy prices of 20% for electricity and 14% for diesel are to be expected. The fuel consumption rate per km is calculated by the company at 0.046 lt/km for vehicles D1-D3. Although the diesel consumption numbers are exact (based on measured fuel consumption), electricity usage is only an approximation, and estimated as 0.2 kWh/km.

The loss of value is the highest in the first years of the vehicle’s lifespan. Loss of value rates not only vary according to the propulsion system or drive train, they also vary according to brand image, mileage, vehicle class. Calculating the residual value of EVs is currently still based on assumptions. The annual depreciation rates used in this analysis are 0.720 for electric and 0.827 for diesel vehicles, which are taken from Lebeau et al. (2013).

Maintenance costs include the costs for all the small and large maintenances throughout the vehicle’s lifespan. According to the company’s agreement with the vehicle conversion company (BD Oto), all service and maintenance costs are covered by BD Oto for a fee of €187 per year per electric vehicle. The maintenance costs of diesel vehicles are retrieved from the accounting and are specific for every model. Figure 2 illustrates annual maintenance and insurance costs per vehicle. The numbers also show that, on average, maintenance costs per km for BEVs are around 55 per cent lower than similar conventional vehicles. Since BEVs have less moving components, they face less temperature stress and do not need oil and filter replacements. In addition, due to the possibility to recuperate energy whilst braking, the braking pads will last longer.

Figure 2 - Maintenance and insurance costs

Source: own calculations by ITU and Borusan

Figure 3 illustrates the TCO results for the four different vehicles. The left y-axis shows the total costs of ownership (in €), while the right y-axis shows the cost per kilometre (in €/km). TCOs per km are around €0.038 for small capacity vehicles, and €0.025 for the large capacity vehicle. The BEV’s TCO/km value is higher than those of all other three vehicles with €0.057 per km.

Figure 3 - TCO results

Source: own calculations by ITU and Borusan

Figure 4 shows the distribution of TCOs. Surprisingly, the share of energy costs for BEVs is at 41% significantly higher compared to the diesel vehicles, which show and average of 34 to 37% (low capacity diesel vehicle) and 31% (high capacity diesel vehicle). However, maintenance and insurance costs shares are lower for the BEVs.

Figure 4 – Share of TCO components for vehicle types

Source: own calculations by ITU and Borusan


The case study results show that BEVs are still a more expensive alternative than diesel options in terms of TCO/km. This is mainly due to their high purchasing prices and lower expected life time. Our analysis only aims at providing an example of TCO realisations in real life and the results presented here are limited to the scope of a specific company operating in İstanbul, Turkey. Moreover, our analysis is based on only direct costs of freight operations. However, currently majority of the urban freight fleets are composed of conventional vehicles, and switching from one technology to another may generate switching costs related to changes in operational processes and workforce preparation. On the other hand, BEVs may also bring some operational benefits such as ease of maintenance operations and support environmentally friendly image of the company, which, in turn, may pay back as higher market share and customer loyalty. Please refer to other related material provided in the next section, for other examples of TCO calculation case studies in other countries and contexts.

Further information

  1. de Mello Bandeira, R. A., Goes, G. V., Gonçalves, D. N. S., Márcio de Almeida, D. A., & de Oliveira, C. M. (2019). Electric vehicles in the last mile of urban freight transportation: A sustainability assessment of postal deliveries in Rio de Janeiro-Brazil. Transportation Research Part D: Transport and Environment67, 491-502.
  2. Camilleri, P. and Dablanc. L., An assessment of present and future competitiveness of electric commercial vans. Journal of Earth Sciences and Geotechnical Engineering, Scienpress LTD, 2017, 7 (1), pp.337-364.
  3. Davis, B. A., & Figliozzi, M. A. (2013). A methodology to evaluate the competitiveness of electric delivery trucks. Transportation Research Part E: Logistics and Transportation Review49(1), 8-23.
  4. Falcão, E. A. M., Teixeira, A. C. R., & Sodré, J. R. (2017). Analysis of CO2 emissions and techno-economic feasibility of an electric commercial vehicle. Applied energy193, 297-307.
  5. Feng, W., & Figliozzi, M. (2013). An economic and technological analysis of the key factors affecting the competitiveness of electric commercial vehicles: A case study from the USA market. Transportation Research Part C: Emerging Technologies26, 135-145.
  6. Figenbaum, E. (2018). Can battery electric light commercial vehicles work for craftsmen and service enterprises?. Energy Policy120, 58-72.
  7. Giordano, A., Fischbeck, P., & Matthews, H. S. (2018). Environmental and economic comparison of diesel and battery electric delivery vans to inform city logistics fleet replacement strategies. Transportation Research Part D: Transport and Environment64, 216-229.
  8. Kleindorfer, P. R., Neboian, A., Roset, A., & Spinler, S. (2012). Fleet renewal with electric vehicles at La Poste. Interfaces42(5), 465-477.
  9. Kuppusamy, S., Magazine, M. J., & Rao, U. (2017). Electric vehicle adoption decisions in a fleet environment. European Journal of Operational Research262(1), 123-135.
  10. Lebeau, P., Macharis, C., Van Mierlo, J., & Lebeau, K. (2015). Electrifying light commercial vehicles for city logistics? A total cost of ownership analysis. European Journal of Transport and Infrastructure Research15(4).
  11. Lebeau, P., Macharis, C., & Van Mierlo, J. (2019). How to Improve the Total Cost of Ownership of Electric Vehicles: An Analysis of the Light Commercial Vehicle Segment. World Electric Vehicle Journal10(4), 90.
  12. Lee, D. Y., Thomas, V. M., & Brown, M. A. (2013). Electric urban delivery trucks: Energy use, greenhouse gas emissions, and cost-effectiveness. Environmental science & technology47(14), 8022-8030.
  13. Taefi, T. T., Stütz, S., & Fink, A. (2017). Assessing the cost-optimal mileage of medium-duty electric vehicles with a numeric simulation approach. Transportation Research Part D: Transport and Environment56, 271-285.


  1. Burke, A., & Miller, M. (2013, November). Life cycle testing of lithium batteries for fast charging and second-use applications. In 2013 World Electric Vehicle Symposium and Exhibition (EVS27) (pp. 1-10). IEEE.
  2. Henze, V. (2019, December 2). Bloomberg NEF: Battery Pack Prices Fall As Market Ramps Up With Market Average At $156/kWh In 2019, Retrieved from:
  3. Lebeau, P., Macharis, C., & Van Mierlo, J. (2019). How to Improve the Total Cost of Ownership of Electric Vehicles: An Analysis of the Light Commercial Vehicle Segment. World Electric Vehicle Journal, 10(4), 90.
  4. Klauenberg, J., Zajicek, J., Reinthaler, M., Rennerfelt, A., Madsen, K., Çelebi, D., Iwan, S., Kijewska, K., Kurjata, E. (2019). EUFAL Deliverable 2.11 - Report on requirements on the platform of exchange.
  5. Camilleri, P. and Dablanc. L., An assessment of present and future competitiveness of electric commercial vans. Journal of Earth Sciences and Geotechnical Engineering, Scienpress LTD, 2017, 7 (1), pp.337-364.
  6. TSI, Turkish Statistics Institute (2019), Transportation Statistics: Motorized Vehicles. Retrieved from:
  7. EPDK- Turkish Energy Market Regulatory Authority (2020), Electricity Prices,

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