Calculating the ROI of an electric cargo bike

Calculating the Return on Investment (ROI) of an electric cargo bike for your business is an essential step in making a wise business decision. "I see many business owners who only look at the purchase price, but there you are selling yourself short," says Thomas van STOER Bikes. "The real payoff is in what you're going to save over the next few years."

ROI is determined by setting all costs (purchase, maintenance, insurance) against savings and revenues. Factors you include are fuel savings, lower maintenance costs, tax benefits, subsidies and efficiency gains. For many companies, the payback period is between 1-3 years, depending on usage intensity and available incentives.

1. What is the ROI of an electric cargo bike for businesses?
2. What costs do you include in your ROI calculation of an electric cargo bike?
3. How do tax breaks affect the ROI of your electric cargo bike?
4. What subsidies are available for electric company cargo bikes?
5. What are the leasing options for electric cargo bikes and how do they affect your ROI?
6. What are the main conclusions for calculating your cargo bike ROI?

The ROI (Return on Investment) of an electric cargo bike for businesses is the ratio of the total investment to the financial benefits it provides. In simple terms, how much will you earn back on each euro invested?

"Last month I had a customer trade in his old van for three of our CityX cargo bikes," Thomas says. "He now saves €800 a month in fuel alone. He never imagined that beforehand."

More and more companies are choosing electric cargo bikes as a transportation solution because of the significant long-term cost savings. Compared to traditional commercial vehicles, operational costs are significantly lower. Consider no fuel costs, lower insurance rates, no parking fees and reduced maintenance costs.

In addition to the direct financial benefits, there are also indirect benefits that contribute to a positive ROI. "Our clients often tell us that their customers appreciate sustainable delivery," Thomas said. "That creates customer loyalty that you can't express directly in euros, but it is felt in your sales."

The typical payback period for an electric cargo bike is between 12 and 36 months, depending on factors such as intensity of use, available subsidies and tax breaks.

Want to know more about tangible savings? Then read our blog on cost savings with electric cargo bikes.

When calculating the ROI of an electric cargo bike, you have to include all relevant costs to get a realistic picture. "I always make a complete overview for my clients," Thomas explains. "That way they know exactly where they stand."

The initial purchase price is the starting point, usually ranging from €3,000 to €8,000 depending on model, quality and specifications.

In addition to the purchase cost, there are ongoing costs that you must include:

Maintenance costs - These are significantly lower than for a car, especially for models with a belt drive instead of a traditional chain. Count on about €100-200 per year.

Secured - Good theft and damage insurance costs about €100-300 a year, depending on the coverage.

Energy cost - Charging the battery costs on average €0.20-0.50 per charge, which amounts to about €50-150 per year with daily use.

"The beauty of our belt drive is that you hardly have any maintenance on them," Thomas explains. "You replace a chain every 2,000 kilometers, a belt easily lasts 10,000 kilometers. That really makes a difference in your maintenance costs."

Compared to a company car, the total annual cost of an electric cargo bike is significantly lower. Whereas a compact company car including depreciation, fuel, insurance, tax and maintenance quickly costs €5,000-10,000 per year, this is around €500-1,500 per year for an electric cargo bike.

Tax breaks can significantly improve the ROI of an electric cargo bike by reducing the net investment. "This is really a gamechanger," Thomas emphasizes. "Many business owners don't even know these benefits exist."

The main tax schemes are:

Small-scale investment deduction (KIA) - This allows you to deduct a percentage of your investment from your profits, lowering your taxable income. For investments between €2,400 and €59,939 (2023), this can add up to 28% investment deduction.

Environmental Investment Allowance (MIA). - For electric cargo bikes on the Environment List, you can deduct 36% (category III) or 45% (category II) of the investment amount extra from your profit.

VAT deduction - As an entrepreneur, you can reclaim the VAT paid, which saves 21% directly on the purchase price.

"I always help my clients apply for these benefits," Thomas explains. "With all the tax schemes included, your net investment can sometimes be up to 50% lower. Then suddenly you're talking about a completely different ROI."

In addition to tax advantages, there are several subsidies available that make the purchase of electric company cargo bikes even more attractive. "Every month I get at least one customer who has received €1500 in subsidies," Thomas says enthusiastically.

At the national level, subsidy schemes are available periodically, such as the SEBA (zero-emission commercial vehicles) subsidy scheme, which sometimes includes electric cargo bikes for businesses.

Many municipalities and provinces offer local subsidies for sustainable business transportation. Amsterdam, Rotterdam, Utrecht and The Hague regularly have subsidy pots for zero-emission transportation, including electric cargo bikes.

"My tip: sign up for your municipality's newsletters," Thomas advises. "Grant pots are often limited and gone = gone. Those who are the first to sign up have the best chance."

The amount of these subsidies varies, but can be as much as €2,000 per electric cargo bike. There are usually specific conditions for applying, such as that the cargo bike must be for business use and you must own the vehicle for at least 2-3 years.

Leasing offers an alternative to buying an electric cargo bike outright and can be a smart choice for your ROI strategy. "For start-ups, leasing is often the best choice," Thomas explains. "That way you have a professional cargo bike right away without a large upfront investment."

There are two main types of lease: operating lease and finance lease.

At operating lease you basically rent the cargo bike for a set period of time, usually 3-5 years. Benefits include no large initial investment, maintenance and insurance often included, and the monthly cost is fully deductible as a business expense.

With finance lease you pay off the cargo bike in installments and become its owner at the end of the term. "If you plan to use the cargo bike for a long time, financial leasing is usually more advantageous," Thomas advises.

A calculation example: A €5,000 electric cargo bike via operating lease costs about €150-200 per month (including maintenance and insurance) for 36 months. With financial leasing, you pay slightly more interest, but at the end you have a cargo bike with a residual value of about €2,000-3,000.

When calculating the ROI of an electric cargo bike for your business, there are some crucial factors to keep in mind. "My main tip: look beyond just the price," Thomas stresses. "The real value is in what you save in the years to come."

The key elements for a realistic ROI calculation are:

• Compare the total cost over 3-5 years with your current mode of transportation, not just the purchase price
• Include all cost savings: fuel, parking, tolls, maintenance, insurance and taxes
• Calculate time savings in crowded urban areas where bikes can be faster than cars
• Consider future fossil fuel cost increases and environmental zones in cities

"I regularly see that our customers have recouped their investment within 18 months," Thomas explains proudly. "Especially if they make smart use of all the benefits and subsidies."

To optimize your ROI, we recommend taking advantage of all available subsidies and tax breaks, choosing the right type of financing to suit your business situation, and investing in a quality model with belt drive for lower maintenance costs.

For most businesses that regularly travel short to medium distances in urban areas, an electric cargo bike is a financially prudent choice with a positive ROI within 1-3 years.

At STOER Bikes we would be happy to help you create a personalized ROI calculation for your specific business situation. "Just come by for a cup of coffee," Thomas invites. "Then together we'll calculate what an electric cargo bike can do for your business."