Electric Forklifts vs LP Forklifts – Reduce Operating Costs

Comparing Costs of Propane Forklifts to Electric Forklifts

The comparison of Propane to Electrics today should focus on three main objectives. Cost, Environmental Impact and Employee Affects. Often referred to as the “Triple Bottom Line” all of these three areas have dramatically changed in the last few years.

When comparing technologies of lift trucks, the cost of fossil fuel powered trucks has changed dramatically. Today, with the volatility of oil, data shows fuel accounts for more than half of the propane vehicle’s monthly cost. Electrics, comparison, have only five percent of their monthly costs susceptible to volatility like electricity.

Electric Forklifts Cost 50% Less to Operate

As a result of the rise in oil costs, the data suggests Electric lift trucks are 20 – 50 % less in costs per month to operate than fossil fuel drive vehicles today. This savings is immediate and is seen from month one of the lease. Further comparisons of historical data have suggested future exponential savings.  Historical data also serves a greater purpose when comparing these technologies, specifically, the changing of such a large portion of the monthly cost. The volatility of the fossil fuels contributes so greatly to the monthly vehicle cost that a small change, such as a few cents per gallon dramatically affects the monthly costs.

LP and Electric Forklift Monthly Cost Comparison

Today it is estimated that close to 80 % of all lift trucks are leased. Because of that, the estimations of cost comparisons should be reviewed in a side-by-side, month-to-month comparison. The following is an example of that comparison. For this example, a typical warehouse environment operating 2,000 hours per year shall be assumed. In a 2,000 hour per year application, the vehicle will operate 167 hours per month. Many Original Equipment Manufacturers of Liquid Propane forklift trucks claim their typical 5,000-pound capacity vehicles use approximately 1.5 gallons of fuel per hour. As such, the LP vehicle uses 250 gallons of fuel per month. Based on national averages of clients surveyed, the average cost for a gallon of propane in the industrial segment is $ 2.00 per gallon. At such pricing, this client will pay $ 500 per month in fuel costs. This same client would pay approximately $400 per month for the lease payment of that truck making fuel represent over 50 % of the monthly cost today. Should oil change and drive the cost of propane to $ 2.50 per gallon, the client now would see a $ 625 per month cost or an increase of 25 % in costs from a simple change in a gallon of fuel by $ 0.50 cents. Over a 60-month lease this change is not a risk clients should be willing to take. Figure 2. Propane Prices Follow Crude Oil Price Trends

The Price of Propane is Linked to the Price of a Barrel of Oil

The Energy Information Agency, shown above monitors the cost of energy in all market segments. Oil in November 2010 is trending close to the $ 90 per barrel mark. As the data above shows, Liquid Propane costs follow that of oil. Based on the 2,000-hour annual operation, the following comparison can be made in three areas.

Purchase Price of a Forklift

The first area is the cost of the two different forklift trucks.   Both units are typically within 20 percent of the cost of each other.  Data suggests typical 5,000-pound capacity forklifts will sell in North America for approximately $ 25,000 per unit.  Leases in North America usually run for 60 months or 12,000 vehicle hours, whichever comes first.  For simplicity sake, this comparison will simply divide the $ 25,000 by the 60 months and add 10 % for the cost of financing.  As a result, this monthly cost will be $ 450 per month.

How Much Electricity Does an Electric Forklift Use?

Clients using electric vehicles will need to add the battery and charger to the cost of the lift truck.  Continuing to compare the 2,000-hour per year operation or 167 hour per month, data suggests electric lift trucks use 3 to 4 kWh per hour.  In that operation the expected monthly usage on the electric vehicle would be 500 – 700 kWh per month.  Assigning the proper battery for that operation depends on the client’s operation and available time to recharge the battery.  These constraints will affect the price of the power because of the amount of the power needing to be returned.  If a client has more time to charge, a smaller charger may be used resulting in decreased costs.

Monthly Lease Cost of a Forklift’s Battery and Charger

In the client example of 167 hours per month over a five-day workweek, the daily usage of approximately eight hours yields a 24 to 32 kWh usage by the Electric lift truck.  In this example, a 40 kWh battery would provide the necessary power to complete the daily usage.  In smaller footprint vehicles, two 20 kWh batteries could fulfill the energy requirement.  The estimated price for a 40 kWh battery and high efficiency charger at the end of 2010 is approximately $ 10,000.  On a full payout lease with the added 10 % interest the monthly cost would be $ 225 per month.  This cost should be added to the $450 per month lease fee for the Electric vehicle resulting in the electric vehicle cost of $ 675 per month.

Cost to Charge and Electric Forklift

The last metric of the comparison is the costs to recharge the battery daily. Assumptions of the higher energy usage of the Electric vehicle will be calculated at 40 kWh per day or 700 kWh per month. According to the Department of Energy estimates the national cost of energy at $ 0.09 cents per kWh. Accounting for the recharge efficiencies of forklift chargers in lead acid batteries, a conservative estimate of 25 % can be added for estimations. Monthly estimates of 700 kWh + 25% = 875 kWh used each month. At $ 0.09 cents per kWh, the client would see a monthly cost of $ 79.00 in electricity costs. The following table summarizes the costs referenced above:

Fossil Fuel Lift Truck and Electric Lift Truck

The Rising Costs of Fuel for Materials Handling Equipment

The financial benefit of electric drive vehicles has never been stronger.  Today the savings of 20 % exists from day one of the lease.  Should oil change anytime in the lease and drive the cost of LP to $ 2.50 per gallon the monthly cost of just fuel changes from $ 500 to $ 625.  This moves the LP cost from $ 950 to $ 1,075 a month.  Changes in electricity costs have a much less dramatic affect on the monthly costs of the vehicle.  Even if the cost of electricity were to double, the cost to the client is less than a 10 % change.

CO and CO2 Emmissions from a Forklift

The second and third sections of the triple bottom line are the environmental impact and the corporate citizenship or stewardship.  Electric lift trucks emit 80 % less Carbon Dioxide (CO2) than a Liquid Propane vehicle.  While LP is considered a Green Fuel when compared to Gasoline and Diesel it produces much more CO2 than an electric vehicle.   The third section of the Triple Bottom Line discusses the Corporate Responsibility of the company to its employees.  By converting from Fossil Fuel vehicles to electrics, the pollutants employees breathe are eliminated.

Conclusion

While emission controls on fossil fuel vehicles have made tremendous progress in the past decade, electric vehicles emit zero hazardous pollutants to the employees driving those trucks.  While reduction is good, elimination is better.  Through the cost savings, reduced risk to commodity changes; reduced impact on the environment through lower carbon footprints and elimination of pollutants breathed by employees the justification to use electric lift trucks has never been stronger.  Oil pricing rises will only continue to support the electric drive triple bottom line superiority.

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

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