IKEA Electric Delivery Trucks Make No Sense in Australia

IKEA has been promoting the commencement of the conversation of their delivery vehicles to electric.

The Australian branch of Swedish home furnishings giant Ikea is taking its transport fleet all-electric, with a commitment to have quit internal combustion engines for all of its delivery and assembly vehicles nationally by 2025.

Ikea, which has been one of the leading installers of renewables globally – and of commercial-scale solar in Australia – said on Friday that its shift to EVs would start immediately, reaching 5 per cent in FY19, 10 per cent in FY2020 and 100 per cent in FY25.

The company in Australia has a fleet of around 100 trucks to deliver large furniture and another 250 vehicles for deliveries of smaller goods – already seven of the these are electric, delivering goods in Sydney, Perth and Melbourne.

The vehicles it uses are not its own, but outsourced through partner companies like Kings Transport and Logistics, which itself has been switching to electric in partnership with Victoria-based electric vehicle conversion specialist, SEA Electric.

IKEA Australia commits to all-electric delivery vehicle fleet by 2025

It all sounds good but it ignores the facts that Australia sources the majority of it’s electricity from coal and that these vehicles will be charged from late in the afternoon during peak demand (assuming there is not any form of load demand control on the chargers).

From a cost irrespective it makes no sense either.

Conversion Cost | $150,000

Charging Costs | $100 per week

Diesel Costs | $300 per week

(for unconverted truck)

Savings per week $200.

Assuming maintenance and repair costs each year are similar for diesel and electric.

750 weeks (14.4 years payback time)!

In the US and Europe where they have a larger mix of nuclear and renewables this could make sense but not in Australia.