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Electric Frito and Coca-Cola Trucks: The Bottom Line in Dollars and Cents

on Jim Motavalli

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That bag of Fritos in your hand may look like any other snack, but it’s altogether different—because it was delivered to your neighborhood convenience store by a zero-emission electric truck. Yes, those are low-carbon Fritos.

Low-carb too? Don’t push your luck.


Carbon-free Fritos? Not quite, but zero emission delivery helps. (Jim Motavalli photo)

On a recent brilliant fall morning, I drove to the Bronx, New York, for the launch of Smith Electric Vehicles’ new battery truck factory. The place swarmed with politicians, because this was a very big deal—a factory in the Bronx! Smith, which has roots going back to its founding in England circa 1920, would seem to be an unlikely contender to bring jobs to an embattled borough. At one time, Smith built what the British call “milk floats,” electric trucks that were familiar sights making deliveries of dairy products throughout the Isles.

But then Smith’s American subsidiary bought out the parent company, and the company is now based in Kansas City. And its customers in the New York area include such American institutions as Frito-Lay, Duane Reade pharmacies, Coca-Cola and Down East Seafood. And they love the trucks. Duane Reade told me the company had put in thousands of trouble-free miles in its four box trucks. According to fleet manager Michael Fowles, the company liked them so much it had 10 more on order. “We love them, for many reasons,” he said. “It’s the right technology for our operations, and the right vehicle for us.”

The Bronx makes sense for Smith because it landed more than $6 million in state and local incentives. The state is also developing vouchers that would lop off up to $20,000 on the price of one of the medium- and heavy-duty electric trucks. That makes buying them more cost-effective, because these vehicles ain’t cheap—the basic vehicle, made by Avia and imported from the Czech Republic, is $75,000. Adding in the electric components can add that much again, if buyers opt for the larger battery packs.


Bronx Borough President Ruben Diaz, Jr. (center) celebrated the new electric truck factory in his district with, among
others, Smith Electric CEO Bryan Hansel, on Diaz’s right. (Jim Motavalli photo)

So does it make economic sense? Both UPS and FedEx are pioneers in buying green trucks, but they’re a long way from converting their whole fleets. UPS, for example, late last year, bought 100 Electric Vehicles International (EVI) battery trucks for use in California, adding to the 28 it already had in New York and Europe. “These trucks will be perfectly suited for UPS’ short-range urban delivery routes," said Mike Britt, director of vehicle engineering. UPS also has trucks powered by compressed and liquid natural gas, propane, plus hybrid electrics—2,200 in all. But UPS has 60,000 delivery vehicles of all types, so the fleet is still burning a lot of diesel.

And that’s why I’m fascinated by a new MIT study from the Center for Transportation and Logistics (CTL). After admitting that the trucks are expensive—approximately $150,000 compared to a standard $50,000 box truck—it goes on to claim that buying an electric truck can be cost-effective for a business with its eye on the bottom line.

CTL’s study is based on data from Staples, which owns a whopping 53 Smith Electric trucks. Staples’ fleet manager, Michael Payette, says the trucks have offered “no real surprises from a reliability perspective, but I was surprised by the drivers’ acceptance, to the point where they do not ever want to drive a diesel again.”

Let’s assume diesel costs $4 a gallon. Standard trucks get a dismal 10.14 miles per gallon (11.56 if it’s a hybrid). The Smith truck uses 0.8 kilowatt-hours of electricity per mile, which could translate to a nine- to twelve- percent savings (depending on the utility price). The return is better if the trucks are used in a vehicle to grid (V2G) system that makes money by giving utilities access to the electricity stored in their batteries. MIT estimated that businesses could rake in $900 to $1,400 per year, per truck in V2G profits, thus reducing operating costs seven to eleven percent.

With V2G, the basic cost per mile of operating a battery truck would be 68 cents per mile, compared to 75 cents for a diesel truck. All those pennies add up when the trucks are on the road 24 hours a day. The savings are real, but there’s still a slow payback for electric trucks. If the savings is seven cents per mile, then over 100,000 miles a fleet operator would save $7,000. So we’re talking about a 15-year payback without subsidies (or less if the trucks are on the road more).

Duane Reade’s Fowles says that limits in the loading and unloading of trucks means its vehicles actually cover only about 15,000 miles annually, diesel or electric. So if it hadn’t gotten subsidies the payback would have been very long indeed. It would be helpful if the five-hour charge times could be reduced, and that’s why Duane Reade is taking a look at participating in a Plugless Power wireless charging demonstration program. The trucks could simply drive over and align with a charger in the roadway located near a Duane Reade store and take in electricity while loading or unloading. “That could be a game changer for us,” he said.

Incentives are essential, especially if they reduce the purchase price. Duane Reade got both federal and state help in buying its plug-in fleet. “Clearly we recognize the positive impact on making the electric trucks more cost effective,” Fowles said. “The financial picture would not be as attractive without subsidies.”  It’s too bad federal largesse is hard to come by in the wake of the Solyndra fiasco. But states can still do a lot. New York is setting a great example.


Down East Seafood makes battery deliveries, with help from state and city incentives. (Jim Motavalli photo)

An example of how incentives can make the difference is provided by Down East Seafood, which bought a $216,000 electric truck in 2008 but paid for it with a $135,000 grant from the New York State Energy Research and Development Authority and a loan of $34,000 from the Bronx Overall Economic Development Corporation.

And while we’re talking about MIT, I’m intrigued to note that the school is in the early stages of developing a battery that could bypass the whole charging problem—instead of plugging in, this battery/fuel cell hybrid would have two separate slurries of electrolyte, and when they’d expended their charge the liquid could be pumped out at a refueling station and replaced with freshly charged material. Or the liquid tanks could be swapped out “like tires at a pit stop.” In either case, there’d be no waiting—it would take about the same time as getting gas.

So, no, electric trucks aren’t a slam-dunk just yet, but the economics are getting better, and that isn’t even counting their advantage in clean local air and reduced greenhouse gas emissions.

Did I mention that Smith Electric also makes school buses? Those too could be put together in the Bronx.





Smith Electric also makes battery school buses, and those could also be
assembled in the Bronx. (Jim Motavalli photo)

Here’s a video look inside the doors at Smith Electric:


Comments

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missileman

Sun, 2012-02-12 14:07

I would love the battery technology to reach the level of a 500 mile range and a 1 hour full charging ability. With batteries like that the gas/diesel producers could close up shop and go home. I know it's wishful thinking on my part but it may come true some day in the future. One can only hope.


Capt G

Fri, 2012-02-24 16:45

Shouldn't we have the battery technology first, before we start subsidizing a technology that doesn't work without them? So, the bottom line in dollars and cents on electric vehicles is that it's a really dumb idea, unless you can get someone else to pay for it, no? Unfortunately, the country is broke on what can only be described as a Greek mythological scale, not a small part of it due to subsidizing ideas of a future yet to materialize. The world's proven oil reserves went up, again, last year.


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