Total cost of ownership is the whole cost of having the truck for a defined period, less what it is worth at the end. It is the only basis on which two different trucks can be compared fairly.
The formula
Stated plainly, and exactly as our calculator implements it:
Total hours = annual hours x years
TCO = purchase price
+ energy price x consumption x total hours
+ maintenance per hour x total hours
+ battery cost x (years / battery life in years)
+ operator cost per hour x total hours
+ other annual costs x years
- residual valueNote the battery line: it is charged pro rata. Owning a truck for five years with a ten-year component means paying for half of it, not all of it and not none of it.
Choosing the period
Three, five and seven years are the usual scenarios, and they are not interchangeable:
- Three years favours the cheaper truck to buy. Too short for a battery replacement to land inside the period, so electric trucks can look artificially good unless you charge the battery pro rata.
- Five years is the common default and usually spans one battery life, which makes it the fairest comparison between power types.
- Seven years favours the truck that is cheaper to run, and makes residual value assumptions matter more.
Run the calculation at more than one period. If the answer flips between three and seven years, the two trucks are closer than they look and the decision should rest on something else – availability, dealer support, operator preference.
Residual value
The most uncertain input in the whole calculation. It is worth asking your dealer to put a guaranteed buy-back in writing if the comparison depends on it. If nobody will commit to a number, enter zero and treat any resale as upside rather than building the business case on it.
What this model deliberately leaves out
Our calculator is straight-line: no discounting, no interest, no inflation. That is a deliberate simplification. It makes the output easy to check by hand and appropriate for comparing options against each other, and inappropriate as a finance submission. If you need a net present value, take these figures to your finance team as inputs rather than as the answer.
Downtime
No cost-of-ownership model here can price the cost of the truck not working, because that depends on what it is holding up. If downtime is expensive in your operation, weight dealer response times and parts availability accordingly – they will not show up anywhere in the arithmetic.