Although the initial investment is high, lifetime costs are lower with electric
Embracing new technology can be difficult, particularly if it disrupts tradition and may unbalance the budget. It often seems like an unnecessary step driven more by industry trends than actual need, so once you add in the cost, learning curve, and the uncertainty around receiving a return on your investment, it’s easy to look at emerging technology with a skeptical eye.
In the construction industry, electric equipment is one of the newest developments looming on the horizon. It’s easy to see the global advantages of going green, and electric construction equipment is a definite upgrade – but it’s an expensive one. Will your construction business be ready to plug into the power of electric equipment? Learn more about transitioning from gas to electric on the job site and start planning on what potential upgrades could ultimately mean to the bottom line of your business.
The emergence of electrification
Environmentally-friendly building practices are gaining in popularity and entering the mainstream market as viable options. Concerns around increasing efficiency and reducing reliance on fossil fuels have become motivating factors in manufacturers reevaluating all-electric construction vehicles.
The mining industry has used electric motors for years. One of the challenges of applying that technology to construction is the need to build components that are sized in a way that allows the machine to move without interfering with the task the machine is designed to do. However, the technical challenges are the easiest to overcome, according to Jenny Elfsberg, the Director of Emerging Technologies for Volvo:
“There are many challenges, but the most manageable challenges are the technical ones. What is less mature and less manageable are the sales, marketing, aftermarket, and customer-acceptance dimensions. But we are working on those. Of course, there is fear and anxiousness when new technologies require new competencies when the cost of the machine is high, but the total cost of ownership is low, minds change and a willingness to embrace the future and contribute to making this world a better place is needed.”
Eric Hendrickson, the Business Development Manager of Vehicle Electrification for Parker Hannifin, predicts that electrification will be a reality within ten to fifteen years. A report on IDTechEx supports this hypothesis by stating that electric construction, agriculture, and mining vehicles will be an $87 billion market by 2028. The technology is already being developed and refined, and its emergence is inevitable.
Change of power
Hybrids play an important role in the transition to electric. Volvo has produced an electric hybrid wheel loader called the LXI, which features electric drive motors mounted at the wheels, electric hydraulics, a significantly smaller diesel engine, and an energy storage system. The vehicle has 50 percent better fuel efficiency than conventional counterparts and can do the work of a conventional wheel loader that is one size larger.
Growth requires progress, and although change can be scary to embrace, it’s essential to success. Although it’s true that the initial cost to transition to electric construction vehicles is high, overall ownership costs are lower than their gas-powered counterparts, with a reduction of up to 25 percent. Also, as new technology evolves and develops, component costs will decrease, eventually lowering the upfront investment.
An all-electric solution makes it easier to comply with new pollution laws, reduces noise pollution, lowers lifetime costs, becomes a selling point for environmentally-minded consumers, and is better for your business and the planet by reducing carbon emissions up to 95 percent. Although the initial buy-in may be intimidating, the eventual transition to electric equipment may be better for your bottom line and is a worthy consideration for your future business plan.
When it comes to choosing which machine you want to incorporate into your lineup, it’s always best to research the equipment you want to purchase. What have other contractors said about this machine? Weigh the pros and cons carefully and consult with your financial advisor before making a final determination. Even though this is an exciting new frontier for the construction industry, the technology is still new, so it’s better to take a safe approach when purchasing new equipment.
If you’re a construction firm looking to make changes, No Boundaries Advisors has over 25 years of experience in management consulting. Our job is to help your business gain the competitive advantage. For any questions regarding maximum business growth, visit us on our contacts page.
