The price on the label may be the first factor that deters you from purchasing a product. However, how much does this product cost? The evaluation will be unique if we consider different goods. Nevertheless, answering this question solely from a cost perspective is too narrow. How much do forklift batteries cost? A majority of people mistakenly believe that the purchase price of a battery is the largest cost associated with battery ownership. The cost of ownership is much higher than that. Forklift batteries come in different types and prices. In general, lead-acid batteries are less expensive than lithium-ion batteries. Initially, the cheapest battery option may appear to be the most cost-effective. Nevertheless, knowledgeable, wise warehouse managers recognize that understanding the true costs requires a closer look at the big picture.
Here is where the key cost assessment metric comes into play. Rather than focusing solely on the original cost of an investment, this takes into account its overall economic value. TCO, or total cost of ownership, is the metric.
A total cost of ownership analysis provides a clear and thorough understanding of the long-term financial impact faced by product buyers. In addition to considering the initial price, this calculation provides a detailed overall view of the cost of owning the product.
Let’s look at how calculating TCO can help you make more informed decisions and avoid seemingly better options. This is especially true when it comes to industrial forklifts and vehicle electrification.
Budgeting is not everything. The key to a smooth transition from combustion engine trucks to electric forklifts is preparation. This includes fully understanding how electrification will impact your total cost of ownership (TCO).
The upcoming ban on gasoline and diesel engines in 2030 will have a significant impact on material handling companies’ fuel consumption, energy supply, shift patterns, and the total cost of ownership of forklift fleets.
Read on to find out how much electrification will cost you and what you'll save.
Despite lower long-term operating costs, electric forklifts cost more to acquire than diesel forklifts. The image below illustrates this clearly.
Acquisition costs:
- ICE forklift (2,500kg capacity and super-flexible tires) - $22,000
- Electric forklift (with equivalent capacity battery and charger) - $28,000
However, electric forklifts are cheaper to run than diesel and LPG trucks of similar capacity.
Annual operating costs (fuel only) based on 750 shifts:
- Electric forklift - $2,200-£3,300
- Diesel forklift - $5,600-$7,000
- LPG forklift - $5,500-$6,500 bulk fuel
With fewer moving parts, electric forklifts are also cheaper to maintain than combustion-engine forklifts.
Annual maintenance costs based on 750 shifts:
- Electric forklift - $1,000
- ICE forklift - $1,600+
Other manufacturers were already electrifying using traditional lead-acid batteries, and many understood that lithium was the most efficient and appropriate chemistry for their machines and vehicles and began moving to battery technology early on.
What is the impact of cost on these changes? In both cases, it's critical to make a thoughtful purchase decision that considers the long-term financial advantages of lithium electrification from the outset. This makes the concept of the total cost of ownership very important.
Admittedly, vehicle electrification may seem like an unwise investment. Currently, the main price difference between cars powered by lithium batteries and those powered by internal combustion engines or lead-acid batteries is actually the cost of the batteries.
However, you have to put aside concerns about the purchase price and adopt a more holistic strategy that considers the entire battery life. A detailed comparison based on the total cost of ownership is the only way to determine the true financial advantages of lithium batteries.
To assess technology transformation's financial potential, several key factors must be considered. To determine the total cost of ownership (TCO) of an industrial forklift, you need to consider a variety of fixed and variable expenses over the life of the vehicle, including:
● Price
● Maintain
● Fuel
● Convert bonuses and funds to electricity for impact
BSLBATT’s experience: Real-world TCO example for industrial electric forklifts
We have been producing industrial lithium batteries for 12 years and with our extensive experience we have helped manufacturers in many different industries switch to lithium batteries.
This is a real-life example of how we helped a customer in the industrial electric forklift sector with two challenges: we guided him through the retrofit process of his lead battery-powered vehicle and helped electrify his vehicle using BSLBATT’s lithium batteries.
Based on a 10-year analysis of the same vehicle powered by diesel, lead-acid, or lithium batteries, the chart below includes the vehicle's initial cost, maintenance costs, and energy balance/fuel costs.
We used three key parameters to compare the total TCO of a vehicle over a given period: purchase price, fuel cost/energy balance, and maintenance cost.
Purchase cost icon Purchase cost
When a manufacturer decides to purchase a combustion engine vehicle, lead battery, or lithium battery, the purchase price represents the initial investment. Compared to internal combustion engines and their electric lead battery alternatives, lithium batteries require a larger initial capital investment.
Nonetheless, the figure shows that when maintenance and fuel cost/energy balance are taken into account, the initial investment will be recouped within the given time frame.
Maintain
The impact of maintenance on the total cost of ownership is clear. Vehicle operating costs are greatly reduced when lithium batteries are used. Electric powertrains have lower technical complexity, simplifying maintenance. Switching to lithium-powered vehicles eliminates the need to regularly replace the entire set of components and moving parts in an internal combustion engine vehicle due to wear and tear.
When it comes to lead-acid batteries, routine maintenance—including adding water, maintaining charging circuits, and keeping parts and terminals extremely corrosion-free—is one of the highest costs a manufacturer has to bear.
Costs associated with constructing indoor lead battery charging structures. Lead batteries require dedicated space because they release gas when charging.
Costs associated with extracting gases released from lead batteries. These gases must be removed from the charging area and properly disposed of through extraction and ventilation systems.
Costs associated with water desalination systems. Lead batteries must be refilled with demineralized water.
All of these additional costs can be eliminated with lithium batteries. These batteries virtually require no charging facilities, produce no emissions, and require no upfront maintenance of any kind.
Energy Balance/Fuel Icon Fuel Energy Balance
Electricity is currently considered more economical than diesel for many reasons. First, electric forklifts are more energy efficient than internal combustion engine vehicles (80% vs 30%).
In addition, electricity prices are generally less volatile and more stable than oil and its derivatives prices. Compared to fossil fuels, electricity is less susceptible to changes in raw material prices.
Let’s compare lead-acid batteries and lithium batteries
Lead batteries have about 4 times shorter lives than lithium batteries (1,000 charge cycles vs > 3,500 charge cycles). In other words, as lead batteries age, their ability to provide energy decreases and they need to be replaced more frequently. Additionally, lead batteries are less efficient and can only be charged at approximately 75%, while lithium batteries can be charged up to 96% faster.
Lead batteries also take longer to charge, typically taking 6 to 8 hours to fully charge. In contrast, lithium batteries support partial charging and fast charging, allowing them to be recharged multiple times a day and in a shorter period. The lead-acid battery in the car must be replaced after 8 hours of use and placed in a special room for recharging.
Improved operational efficiency Lithium-ion batteries can run longer before needing to be recharged, take less time to charge, and can be recharged at your convenience (i.e. when the operator is on a break). If you want to increase efficiency, eliminating the extra step of charging a lead-acid battery is a big benefit.
When charging a lead-acid battery, operators must use specialized equipment to remove and transport the battery to a charging station. Then, they can remove a second recharging lead-acid battery and install it on a waiting forklift. While it may only take 15 to 20 minutes, this is unproductive time wasted repeatedly on every charge cycle.
If you want an efficient warehouse, lithium-ion batteries may be the solution because charging does not require the battery pack to be removed from the forklift. The extra 15 to 20 minutes can be put to productive use to achieve operational goals.
Keep in mind that lead batteries are heavier and larger than lithium batteries. This can have a serious impact on logistics, as the changeover operation takes time and is a potential source of risk for workers.
Needless to say, these variables can increase lead battery operating costs.
This example fully demonstrates that using lithium batteries to power industrial forklifts or electric vehicles is an economically sound choice. While replacing lead batteries or internal combustion engines with lithium batteries requires more initial investment, the total cost of ownership analysis shows the bottom line is more favorable over time.
This makes TCO analysis a very useful tool when weighing your options before investing. Savings from reduced maintenance costs, increased operational efficiency and compliance with strict green standards all contribute to the conclusion that converting industrial forklifts and vehicles to electric is a critical step towards long-term environmental and economic sustainability.
Total cost of ownership (TCO) is becoming a major lever and will continue to be a rapid tool in the transition to electric in an increasing number of industries. By providing a clear and transparent view of the financial benefits of switching to electricity, TCO can serve as a strategic tool for businesses to make informed and conscious decisions, enabling them to move faster to more sustainable solutions while reducing their impact on the environment.
