Small e-vans cost the same as diesels but are in short supply

Small electric vans now cost the same to own as diesel vans – but there simply aren’t enough of them available to bring about the improvements in air pollution and reduced CO2 emissions that the technology allows for. That is the conclusion of a study for T&E which highlights how the EU’s reluctance to adequately regulate the vans’ emissions and use is now slowing emissions reductions.

Vans – light commercial vehicles up to 3.5 tonnes in gross weight – have generally avoided the stricter regulation imposed on lighter vehicles (cars) and heavier vehicles (trucks). Because of licensing rules and taxes, it is often cheaper to have a large van than a small truck, yet lax CO2 emissions standards over recent years have meant emissions-reduction technology has made less progress in vans than in cars.

Now a new study for T&E by the Dutch consultancy CE Delft says small electric vans, which have few or no emissions, cost the same as diesel vans. For ‘cost’, the study takes purchase price, taxes, fuel bills and maintenance over six years. These are the parameters of a standard lease contract, and as most vans are owned by companies rather than private individuals, the total cost of ownership is more of a factor in buying decisions than simply the purchase price.

Given that small vans make up 40% of the European van market, the potential that cost parity between electric and diesel small vans offers for emissions reduction is immense. But the benefits are being held back by a lack of availability. There are currently just 10 battery electric van models on the market in the EU, compared to more than 200 diesel models. As a result, electric vans account for less than 1% of all new van registrations.

T&E’s clean vehicles manager Julia Poliscanova said: ‘Often the economics are cited as the reason why businesses don’t take up the cleanest technology, but in this case it’s a total failure of the market to provide the supply of electric vans. In Germany, the delivery giant DHL had to start making their own electric StreetScooter because of the lack of proper supply from traditional vanmakers.’

‘Under current EU law, the average new van must emit no more than 147g of CO2 per km in 2020; this compares to a 95g target for cars in 2021. As a result, improvements in van efficiency have been minimal, operational costs for users have increased, and incentives to develop electric vans are low. With vans responsible for 12% of the EU’s total road transport emissions, and road transport’s poor performance hampering overall EU emissions reduction, the lack of ambition on vans is having a significant impact.’

Poliscanova added: ‘At a time when many businesses would be willing to buy the cleanest vehicles on cost grounds, they are forced to stick with the dirtiest vehicles for lack of supply. If the market is not delivering, then for the sake of clean air and climate change, policymakers at EU and national level should require manufacturers to do so via regulation.’

To help boost supply, T&E is calling for the review of the post-2020 CO2 standards, currently with European Parliament and national governments, to include a bespoke sales mandate for electric vans. This will force vanmakers to put more models on the market as well as market them accordingly.

Most electric vehicles are expected to reach cost parity with petrol and diesel vehicles sometime between 2020 and 2025, but a 24% fall in the price of batteries for vans in 2017 has brought parity in the small van market sooner than expected.