Electric Forklifts vs LP Forklifts – Reduce Operating Costs

Comparing Costs of Propane Forklifts to Electric Forklifts

The comparison of Propane to Electric forklifts today should focus on three main objectives: Cost, Environmental Impact, and Employee Effects. Often referred to as the “Triple Bottom Line,” all three areas have changed dramatically in recent years.

When comparing lift truck technologies, the cost of fossil fuel-powered trucks has changed significantly. Today, with the volatility of oil, data shows that fuel accounts for more than half of a propane vehicle’s monthly cost. In comparison, electric forklifts have only about five percent of their monthly costs susceptible to fluctuations in electricity prices.

Electric Forklifts Cost 50% Less to Operate

Due to rising oil costs, data suggests that electric lift trucks are 20–50% less expensive per month to operate than fossil fuel-powered vehicles. These savings are immediate and noticeable from the first month of the lease. Further comparisons of historical data suggest exponential future savings. The volatility of fossil fuels plays a significant role in monthly vehicle costs, meaning that even small changes, such as a few cents per gallon, can dramatically impact overall costs.

LP and Electric Forklift Monthly Cost Comparison

It’s estimated that close to 80% of all lift trucks are leased. For this reason, cost comparisons should be reviewed side-by-side, month-to-month. The following is an example of that comparison for a typical warehouse environment operating 2,000 hours per year, or 167 hours per month.

Many Original Equipment Manufacturers (OEMs) of Liquid Propane forklifts claim their 5,000-pound capacity vehicles use about 1.5 gallons of fuel per hour. Therefore, the LP vehicle would consume 250 gallons of fuel per month. Based on national averages, propane for industrial clients costs around $2.00 per gallon, resulting in $500 per month in fuel costs. Adding a lease payment of $400 per month for the truck, fuel represents more than 50% of the total monthly cost. If propane rises to $2.50 per gallon, the monthly fuel cost jumps to $625, increasing costs by 25%. Over a 60-month lease, this risk is significant.

Note: Data is not adjusted for inflation.
Source: Crude Oil: West Texas Intermediate Crude Oil Prices as reported by Reuters 2011

The Price of Propane is Linked to the Price of Oil

The Energy Information Agency (EIA) monitors energy costs across market segments. In November 2010, oil prices were trending near $90 per barrel, and as the data shows, Liquid Propane costs closely follow oil prices. Based on a 2,000-hour annual operation, the following comparisons can be made in three areas:

Purchase Price of a Forklift

Both propane and electric forklifts are typically within 20% of each other in terms of cost. Data suggests that 5,000-pound capacity forklifts sell for around $25,000 in North America. Leases typically run for 60 months or 12,000 hours, whichever comes first. By dividing the $25,000 by 60 months and adding 10% for financing, the monthly cost is $450 per month.

How Much Electricity Does an Electric Forklift Use?

Electric vehicle clients need to add the cost of the battery and charger to the lift truck. Electric forklifts consume 3 to 4 kWh per hour, resulting in a monthly usage of 500–700 kWh. The battery and charger setup depend on the operation's available charging time. If a client has more time to charge, a smaller charger can be used, reducing costs.

Monthly Lease Cost of a Forklift’s Battery and Charger

For 167 hours per month of use over a five-day workweek, the daily power usage would range between 24 to 32 kWh. A 40 kWh battery can provide sufficient power for daily use, or two 20 kWh batteries in smaller footprint vehicles could suffice. At the end of 2010, a 40 kWh battery and high-efficiency charger cost around $10,000. A full payout lease with 10% interest results in $225 per month. Adding this to the $450 monthly lease brings the total electric vehicle cost to $675 per month.

Cost to Charge an Electric Forklift

The final metric compares the daily battery recharging cost. Assuming 40 kWh per day or 700 kWh per month, at $0.09 per kWh (the national energy cost), with 25% added for charger inefficiency, total monthly energy usage would be 875 kWh. At $0.09 per kWh, the client’s monthly electricity cost would be $79. The following table summarizes the costs:

Fossil Fuel Lift Truck and Electric Lift Truck

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Monthly Lease: $450 | $450

Battery / Charger: $0 | $225

Propane: $500 | $0

Electricity: $0 | $79

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MONTHLY COST: $950 | $754

The Rising Costs of Fuel for Materials Handling Equipment

The financial benefit of electric forklifts is becoming more apparent. With a 20% savings from day one of the lease, should oil prices rise and drive propane to $2.50 per gallon, monthly fuel costs would increase from $500 to $625. This raises the propane vehicle's monthly cost from $950 to $1,075. In contrast, changes in electricity costs have a much smaller impact. Even if the cost of electricity doubles, it only causes a less than 10% change in monthly expenses.

CO and CO2 Emissions from a Forklift

In terms of environmental impact and corporate responsibility, electric forklifts emit 80% less CO2 than Liquid Propane forklifts. While LP is a greener fuel compared to gasoline and diesel, it still produces much more CO2 than electric vehicles. Moreover, by converting from fossil fuels to electric forklifts, companies eliminate the pollutants that employees are exposed to.

Conclusion

Emission controls on fossil fuel vehicles have improved significantly over the past decade, but electric forklifts offer zero hazardous emissions to employees. While reducing emissions is beneficial, eliminating them is even better. Through cost savings, reduced commodity risk, environmental benefits, and improved employee safety, the case for using electric forklifts has never been stronger. Rising oil prices will only continue to support the superiority of electric drive vehicles.

Steve Munton is a nationally recognized expert in Sustainability and Material Handling. He travels North America speaking on Sustainability, Electric Vehicle Conversions, and Energy Savings in the industrial sector.

For more information on Steve, visit: http://www.linkedin.com/in/stevemunton