Businesses Can Cut Vehicle Costs by 60% Using E-Bikes

If your company is considering switching from cars or scooters to e-bikes, you may be wondering how much money you could save. While your company’s total cost savings from e-bikes will depend on many factors, it’s safe to say you’ll be looking at a lot of extra cash.

The potential savings from replacing just one car or truck with an e-bike come in at around $3,000 per year. That means you could save 60-80% on vehicle costs by switching to e-bikes. This article will explain how.

Plant growing from cup of coins
Switching to e-bikes can save you money and help your business grow. Photo by Micheile Henderson on Unsplash.

Model #1: The United States IRS Standard Mileage Rates

Tax form with standard mileage rate form
Using the IRS's Standard Mileage Rate is one way to estimate commercial car costs. Photo by Olga DeLawrence on Unsplash.

To find out how much you can save by using e-bikes, we first have to calculate how much it costs to use a car in a business context. One way of doing this is by using the 2020 US IRS Standard Mileage Rate. That’s the maximum per-mile rate allowed by the US government’s tax office for calculating mileage for operating a car or truck for business purposes.

The Standard Mileage rate includes costs associated with driving and owning a vehicle, including:

  • Fuel
  • Oil
  • Maintenance, repairs, and tires
  • Insurance
  • Depreciation
  • License and registration fees
  • Interest on vehicle loan
  • Parking
  • Tolls
  • Garage rent

For 2020, the Standard Mileage Rate is 57.5 cents per mile (.33 € per km).

Let’s assume you own a food delivery business in a big city. Most of the deliveries you need to make are short-distance trips. You currently own a car or van that travels 30 miles (48.3 km) per working day doing deliveries. That means your vehicle does 7,830 miles (12,601 km) per year, assuming there are 261 working days in a year. Using the Standard Mileage Rate, your costs are $4502.25 (4,142.09 €) per year.

Now we need to calculate the per-mile cost for owning and operating an e-bike. Here’s how that breaks down:

Cost Per Mile for E-Bike as a Short-Distance Delivery Vehicle (in US cents)
Fuel (electricity) .11
Oil 0
Maintenance, repairs, and tires 11
Battery replacement 2.52
Insurance 13
Depreciation 44
License and registration fees 0
Interest on vehicle loan 0
Parking 0
Tolls 0
Garage rent 15
TOTAL 19.6 cents/mile

1Assumes 400 wH battery and range of 40 miles/charge.

2Assumes battery cost of $600, battery replacement every 3 years, and 7,830 miles ridden/year.

3Assumes insurance policy cost of $10/month.

4Assumes e-bike cost of $2,600 and 5-year linear depreciation.

5About 10 e-bikes can fit in a standard parking space.

The total cost to own and operate the e-bike is 19.6 cents per mile (.11 € per km), for a savings of 66%. This adds up to $1,534.68 (1,411.81 €) per year, for a savings of $2,967.57 (2,729.97 €) compared to cars.

Model #2: The European Pro E-Bike Study

Hand holding fan of Euro large bills
Switching to e-bikes is an empirically proven way to cut costs. Photo by Olga DeLawrence on Unsplash.

While using the Standard Mileage Rate is a good way to estimate the potential cost savings from using e-bikes, some real-world proof would be even better. Luckily, that proof exists. In 2016, a European research project called Pro E-Bike used empirical evidence to demonstrate that businesses could achieve huge cost and CO2 savings by using e-bikes.

The Pro E-Bike project tested the use of different kinds of e-bikes and e-scooters for a range of delivery services. They looked at over 40 businesses in seven European countries and 20 cities. These businesses used varying numbers of e-bikes to replace other vehicles like cars, vans, and scooters. Every company involved carefully monitored their costs and efficiency. After the trial was over, most of the companies decided to keep their e-bike delivery fleets—even in cases where that required significant restructuring of their logistics.

GSD e-bike carrying large boxes
Modern cargo e-bikes are a viable cost-saving alternative to cars and vans. 

The study concluded that switching from cars or vans to e-bikes saves about $1,733.58/year/vehicle (1,595 €), assuming a distance traveled of 18.6 miles (30 km) per day (less than in our example above). Compared to scooters, e-bikes save about $999.93 /year/vehicle (920 €). In addition to financial savings, the businesses that switched to e-bikes saved hundreds of tons of CO2 emissions each year. Note that this study didn't seem to factor in costs from parking fees and fines, which can really add up.

Of course, as mentioned at the beginning of this article, your actual cost savings will depend on your specific use case. To help you estimate your savings, the leaders of the Pro E-Bike study released a handy simulation tool. By going to this page and downloading the tool in your language, you can input details about your scenario and get an even more accurate estimate of how much money and CO2 emissions you’ll save by switching to e-bikes.

Although savings estimates vary, it's clear that e-bikes are a solid investment in the future of your business. Whether you end up saving $1,700/year, $3,000/year, or more, your e-bike purchase will pay for itself in 1-2 years, setting your company up for years of savings on vehicle costs.

Interested in learning how businesses like yours can benefit from e-bikes? Get in touch.