Chinese Electric Prime Movers and SEQ Freight Costs

What the client needed

A mid-size line-haul operator runs 40 prime movers on intrastate routes between Brisbane, Toowoomba, the Gold Coast and the Sunshine Coast. Its board had seen Chinese electric prime movers arrive in Australia at prices well below European models, and wanted to know whether the numbers stacked up for its fleet and what it would mean for the rates it charges customers.

The question they needed answered: Is a Chinese battery-electric prime mover cheaper to own and run than diesel on these routes, under what conditions, and how much of any saving could flow through to customers?

What we did

• Reviewed the Chinese heavy electric truck market and the models now entering Australia: pricing, battery size, range and charging capability.
• Built a seven-year cost of ownership model comparing a diesel, a Chinese battery-electric and a European battery-electric prime mover on the operator's typical duty cycle.
• Included depot charging, a blend of depot and public charging tariffs, maintenance, insurance and residual value, and tested the result against diesel price, annual distance and a future road user charge.
• Turned the vehicle costs into cost per kilometre, per tonne-kilometre and per pallet, so the board could see what a customer would notice.

What we found

On the operator's duty cycle the Chinese electric prime mover came in at about $1.22 per km against $1.37 for diesel, an 11% saving or roughly $23,000 per truck a year. Almost all of it comes from energy: about 40 cents per km for electricity against 77 cents for diesel, net of fuel tax credits.

At current Australian pricing a European electric prime mover is around 15% dearer than diesel. The price of the Chinese trucks is what changes the answer.

Break-even sits at roughly 100,000 km a year. Below that, the higher purchase price isn't recovered.

A road user charge on electric trucks is the one factor that wipes out the saving on its own. Around 15 cents per km would erase it, a real policy risk over a seven-year asset life.

Electric prime movers carry 3 to 4 tonnes more tare weight. That barely matters for volume-limited freight such as FMCG, parcels and retail, but it pushes dense, mass-limited loads above diesel on cost per tonne-kilometre.

Driver wages and overheads don't change, so an 11% vehicle saving becomes about a 6% cut in total operating cost: around 87 cents on a pallet from Brisbane to Toowoomba.

What we recommended

• Run a two-truck pilot on the highest-use, volume-limited routes (above 120,000 km a year) before committing fleet-wide.
• Negotiate battery warranty terms tied to throughput, not just years, and confirm local parts and service support.
• Put an electricity supply contract in place before the trucks arrive. A poor depot tariff can take half the saving.
• Share part of the saving in customer contracts, with a review clause for any future road user charge on electric trucks.
• Install depot charging with spare capacity and secure the network connection early. The connection, not the truck, is usually the long-lead item.