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Expanding Your Fleet? Weigh the Risks of Gas, Electric, Hydrogen Fuel Cell Vehicles

May 7, 2024

As the economy continues to gain momentum, many companies are growing their fleets. On the minds of business owners is whether to stick with traditional gas-powered vehicles or switch to electric or hydrogen fuel cell-powered vehicles.

All have their risks and benefits, including in how they are insured and protected. Consider the following before you make a decision.

Gas-powered vehicles

Gas-powered vehicles have been around for more than a century, and they have their pros. They are the least expensive option, fueling stations are prevalent and they are easy to store. In addition, a semi-truck can travel up to 2,000 miles on a tank of gas.

The drawback is that gas-powered vehicles release carbon dioxide into the air, which contributes to climate change. If your company is trying to reduce its carbon footprint, a greener option might suit your needs.

Electric vehicles

Electric vehicles (EV) are gaining steam among individuals and companies alike. Sales of electric vehicles are expected to grow by 22% this year, according to a report by Bloomberg. Central Ohio is a big player in this trend, with Honda forging ahead on a plant in Jeffersonville that will make lithium-ion batteries for EV cars across the country. Mass production is slated to begin next year.

But are these vehicles right for your business?

By all reports, electric vehicles take less fluids, are cheaper to maintain because they need less maintenance overall than a gas-powered vehicle, and they cost only about $10 to charge in Ohio, according to the U.S. Department of Energy. It’s also easy to obtain insurance on these vehicles.

On the downside, electric vehicles take about 45 minutes to fully charge, which can hamper efficiency. However, Gov. Mike DeWine announced in January that the country’s first fast-charging EV station would open in London, Ohio. That’s in addition to the existing 3,700 EV charging stations throughout the state.

For businesses who are considering an electric fleet, the on-site charging needs are more advanced than the needs of an individual attempting to charge at home, according to the U.S. Department of Energy. That factor, combined with proper storage, could increase your risk and initial investment.

There are state and federal tax credits to be had. Organizations that buy an EV vehicle can get a tax credit of up to $40,000.

Hydrogen vehicles

Though they’re lesser known, vehicles powered by hydrogen fuel cells are becoming more popular.

Among the pros are that they are quick to refuel, have zero harmful emissions and at 400 miles, their driving range is twice that of an electric vehicle.

However, the risks could outweigh the benefits for businesses.

Hydrogen vehicles are currently more expensive and, therefore, insurance is higher. They cost about $200 to fill up and storing the fuel tanks can be challenging because it requires a larger tank at higher pressure, according to the U.S. Department of Energy. Medium- and heavy-duty vehicles might have enough storage space, but that could put those vehicles over the permitted weight limit.

If you’re considering expanding your fleet or are in the market for a new private vehicle, Oswald can help you weigh the risks of each kind of vehicle and help you design the right insurance program to protect your investment.

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