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A shipping company is considering purchasing electric trucks and phasing out its current fleet of diesel trucks. Your company has been contracted to evaluate the
A shipping company is considering purchasing electric trucks and phasing out its current fleet of diesel trucks. Your company has been contracted to evaluate the economic sustainability of this decision. Write a -1 page memo evaluating these two technologies and provide recommendations to your employer. Notes from a previous meeting are attached below including some basic research and specifics of what the client wants investigated. Assume each truck has a lifetime of 15 years, is driven 15,000 miles per year, and is purchased in year o prior to lifetime operation. Note: electric vehicles require purchase of an additional charging station. Purchase Energy Energy Maintenance Cost Electric Vehicle Price Use Supply Cost S/mile Charging Station (5) 90,000 SO.1/kWh 0.18 $5000 Electric Truck Diesel Truck 60,000 1.3 kWh/mile 8 miles per gallon $3.00/gallon 0.22 0 a) What is the operating cost per mile (S/mile) of driving each truck? b) For a discount rate of 7% and 15 years of operation what is the net present cost of ownership for each vehicle? c) Holding all other variables constant, at what discount rate would the electric truck and diesel truck have equal total cost of ownership? Plot results (NPC v.s. r). d) Holding all other variables constant, at what average electricity price would the electric truck and diesel truck have equal total cost of ownership? Plot results (NPC v.s. Price)
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