With the push for sustainability, regulatory pressure, and the promise of long-term cost savings, electric trucks are becoming an attractive option for fleets of all sizes. But for small fleets—those operating under 20 vehicles—the decision to go electric isn’t just about reducing emissions. It’s a matter of affordability, operational viability, and return on investment. Recent developments, including diesel supply challenges, further complicate this decision. Let’s break down the cost-benefit analysis to see if electric trucks make sense for smaller fleet operators.

Initial Costs: A High Barrier to Entry

The biggest hurdle for small fleets is the upfront cost of electric trucks. A Class 8 electric truck can cost anywhere from $350,000 to $500,000—double or even triple the price of a comparable diesel model. Even for Class 3-6 vehicles, prices remain significantly higher than traditional counterparts.

However, federal and state incentives can help offset these costs. The federal Inflation Reduction Act (IRA) extends tax credits for EV purchases, offering up to $40,000 per electric commercial vehicle over 14,000 pounds, substantially lowering the initial investment. Many states have rebate programs that further reduce the financial burden. While these incentives help, they don’t completely eliminate the challenge of higher upfront costs.

Operational Costs: Lower, But with Caveats

Electric trucks shine in operational cost savings. Here’s where they have a clear edge:

• Fuel Savings: Charging an electric truck typically costs 50-75% less than fueling a diesel truck over the long term.
• Maintenance Savings: EVs have fewer moving parts, eliminating expenses tied to oil changes, engine overhauls, and emissions system repairs.
• Longer Lifespan: Batteries degrade over time, but well-maintained EVs can outlast their diesel counterparts, particularly in lighter-duty applications.

That said, electricity rates can be volatile. Demand charges—fees based on peak electricity usage—can significantly impact costs, especially if charging isn’t managed strategically. Small fleets may lack the resources to optimize charging schedules or invest in on-site energy storage solutions to mitigate peak rates.

Infrastructure Challenges: More Than Just Plugging In

One of the biggest hurdles for small fleets is setting up charging infrastructure. Unlike large fleets that can justify investments in private charging stations, small fleets may need to rely on public chargers or invest in a few depot-based chargers, which can cost tens of thousands of dollars each.

To address this, the current administration has allocated $7.5 billion through the Infrastructure Investment and Jobs Act to build a national network of EV chargers, making it easier for fleets to access reliable charging stations. Utility upgrades may still be necessary for some fleet depots, adding costs and delays, but this investment improves long-term feasibility.

Regulatory Environment: Pushing for Sustainability

The administration has introduced stringent emissions standards for heavy-duty vehicles, aiming to reduce greenhouse gas emissions significantly. These regulations encourage fleets to adopt cleaner technologies, including EVs, to comply with evolving environmental policies. This means that while diesel-powered fleets may soon face higher compliance costs, transitioning to electric trucks can provide regulatory advantages.

Diesel Supply Challenges: An Emerging Concern

Recent diesel shortages have added another layer of complexity for small fleets. In late 2022, U.S. diesel inventories fell to their lowest levels since 2008, with only a 25-day supply on hand. This shortage led to increased diesel prices, exacerbating operational costs for fleets reliant on diesel fuel. Factors contributing to the shortage included reduced refining capacity and increased demand.

While the situation has improved since then, diesel prices remain volatile, and supply concerns persist. Small fleets must consider these uncertainties when evaluating the long-term viability of diesel versus electric trucks.

Operational Constraints: Is Electric a Fit for Your Routes?

Small fleets often operate in regional and last-mile applications, where electric trucks perform well. However, long-haul routes remain a challenge due to limited charging infrastructure and range constraints.

For local routes under 200 miles per day, electric trucks can be an excellent fit. They return to base daily, making overnight charging feasible and minimizing reliance on public charging networks. But for fleets running mixed operations—including occasional long-haul trips—diesel or hybrid solutions may still be necessary.

Research and Development Support: Driving Down Future Costs

Federal funding has also been directed toward research and development, focusing on improving battery efficiency and reducing costs. These advancements benefit small fleets by making EVs more reliable and cost-effective in the long term, addressing concerns about range and battery degradation.

Resale Value & Future-Proofing

Another uncertainty is resale value. The secondary market for electric trucks is still developing, and concerns about battery degradation may impact resale prices. On the flip side, regulatory changes and growing demand for zero-emission vehicles could improve resale values in the coming years.

Future-proofing is also a concern. Small fleets must weigh the risk of investing in early-generation electric trucks, which may be outpaced by newer, more efficient models before they’ve recouped their investment.

Final Verdict: Can Small Fleets Afford the Switch?

The answer depends on each fleet’s specific operations. If your routes are predictable, under 200 miles per day, and your facility can handle charging infrastructure upgrades, EVs can deliver substantial long-term savings. Federal and state incentives can also ease the initial cost burden, but financing and managing infrastructure investments remain significant challenges.

For fleets with irregular routes, high mileage demands, or limited capital for infrastructure, diesel or hybrid solutions may still be the