Battery electric commercial vehicles in the Netherlands: Is it time for electrons?

Switching toward zero-emission vehicles[1] not only benefits the environment but can also be a smart business decision. To assess the competitiveness of commercial vehicles, we look at their TCO.[2] TCO includes a vehicle’s purchase price, as well as its fuel costs and operational expenses over its lifetime. For LCVs,[3] battery electric vehicles (BEVs) stand out as the most cost-effective option, offering the lowest TCO. Battery electric MCVs only achieve a lower TCO than fossil-fueled alternatives in 2025 thanks to a combination of supporting policies such as Dutch government purchase subsidies and the expected increase in fossil fuel costs due to the new EU emissions trading system (ETS2) (in Dutch), set to phase in by 2027. Finally, as we noted in our 2023 publication, battery electric HCVs remain more expensive than fossil fuel-based vehicles, despite the array of current policy supports.

Although not all operators will switch purely for economic reasons, zero-emission zone restrictions will compel some companies to transition to zero-emission vehicles to be able to continue operating in certain cities in the Netherlands (in Dutch).

The reduction in TCO is likely a key driver behind recent trends in the commercial vehicle market. For instance, electric LCVs registrations in the Netherlands reached 8,000 registrations in 2024, doubling the registrations seen in 2022 (see figure 1a). On the other hand, MCVs and HCVs saw combined registrations of 669[4] vehicles in 2024, representing 3.5% of total registrations (see figure 1b). Natural gas-fueled commercial vehicles maintain a small market share, with no registrations in 2023 and only 200 in 2024. This includes vehicles using internal combustion engines (ICE) fueled by compressed natural gas (CNG) and liquified natural gas (LNG).

[1] Vehicles that emit less than 1 gCO2 per metric ton-kilometer driven (including fuel cell and battery electric vehicles) are zero-emission vehicles.

[2] Total Cost of Ownership: How It's Calculated With Example

[3] For a detailed explanation of LCV, MCV and HCV see figure 2.

[4] Data is aggregated by the EU, making distribution difficult to report. However previous research indicates that a higher percentage of vehicles are likely MCVs.

Note: Fuel cell technology refers to vehicles using hydrogen in a fuel cell. ICE LNG stands for internal combustion engines fueled by liquified natural gas, and ICE CNG stands for internal combustion engines fueled by compressed natural gas. Source: European Alternative Fuels Observatory, RaboResearch 2025

Regulation plays an important role in incentivizing the adoption of battery electric MCVs and HCVs. The European Union’s emission standards for original equipment manufacturers (OEMs), which entered into force in 2025, are a key driver. Compliance with this regulation could encourage OEMs to release new battery electric commercial vehicle models. Failure to meet the emission reduction targets could entail fines of up to EUR 90m per 1% deviation from the target for an average manufacturer.[5] These fines might be passed on to consumers, potentially increasing the purchase costs of fossil fuel commercial vehicles.

[5] For more details, refer to the regulation.

The principal components of the TCO are capital costs, fuel costs, and operating costs (see figure 2). Capital costs represent the cost of purchasing the vehicle, which occurs in the first year, we use the average price for each category from BloombergNEF. We assess fuel costs by considering the annual kilometers driven, fuel prices, and the fuel efficiency of each technology. Operating costs cover the expected maintenance costs, which are lower for battery electric vehicles compared to fossil fuel-based vehicle types, as they have fewer moving parts. We have used average maintenance costs for the industry, but there might be significant variations depending on the vehicle’s use. For example, a vehicle transporting food experiences less wear and tear than a vehicle transporting construction materials.

BEVs require charging infrastructure. Although charging on public streets is possible, the costs for fast charging are often higher than charging at a logistics center. We include this expense separately to highlight it as unique to BEVs.

A potential obstacle is grid congestion, which can delay the deployment of charging infrastructure, creating an additional bottleneck.

Predominantly composed of small companies with small fleets, this sector often subcontracts their distribution services to larger companies. Although battery electric LCVs have lower TCO, their higher purchase price can be a barrier. A leasing system, enabling operators to profit from lower operating costs without the burden of upfront financing, can provide a potential solution.

Beyond prices and infrastructure, other organizational obstacles remain. Companies transitioning to BEVs have to train their staff on the operation and maintenance of BEVs, including new safety protocols. Additionally, fleet management systems need to be updated to include the monitoring, maintenance, and charging schedules of the EV fleets. It is difficult to assess and include these costs in a TCO model, but they remain a point of attention for companies considering the transition.

In the following section, we will examine the TCO of the three different types of commercial vehicles.

Light commercial vehicles (LCVs)

Battery electric technology is the most cost-effective option for LCVs, even when accounting for the required charging infrastructure expenses.[6] Due to lower fuel and maintenance costs, operating battery electric LCVs is 11% more economical in the Netherlands than the next cheapest alternative. Consequently, battery electric LCVs have experienced significant growth in registrations. In 2023 they comprised 13% of all new vehicle registrations in the Netherlands, which is nine times more than in 2020.

Medium commercial vehicles (MCVs)

In the MCV segment, the most economical choice, according to our calculations, is currently vehicles fueled by CNG. If we do not take into consideration policy support (subsidies for battery electric vehicles, road tariffs, and ETS2), the fuel costs of CNG vehicles are considerably lower than those of other alternatives (see figure 2). Although the operational costs of CNG vehicles are higher, these are offset by a lower purchasing price compared to BEVs. However, as we will discuss later, policy support toward zero-emission vehicles may change the outlook for this segment.

Heavy commercial vehicles (HCVs)

Gas (CNG and LNG) has the advantage of being a relatively cheap fuel, and gas-fueled vehicles offer longer ranges compared to battery electric vehicles, with lower refueling times. The fuel costs per kilometer for CNG HCVs are three times cheaper than those for battery electric and diesel. Although gas produces, on average, 25% fewer emissions than diesel, it is not an emission-free fuel. Consequently, its price will increase when EU ETS2 comes into force for the transport sector in 2027. We examine this effect in more detail in the policy chapter. The emissions from CNG and the limited refuelling infrastructure compared to diesel reduce the attractiveness and adoption rate of CNG vehicles in the commercial sector.

[6] For an LCV at least one 100kW charger is needed for every four vehicles. BloombergNEF reports a cost of EUR 28,500 per charger. We divide this cost among all kilometers driven to estimate the TCO.

Policy support is often essential for the deployment of certain technologies, this is also true for battery electric MCVs and HCVs in the Netherlands. Dutch policy support makes battery electric MCVs competitive and helps close the gap for battery electric HCVs. To incentivize the adoption of zero-emission transport, the Dutch government has implemented a scheme[7] that subsidizes up to 14.8% of the purchase price of an MCV and up to 29% of an HCV. There will be two rounds of subsidy applications in 2025, targeting new zero-emission vehicles. This subsidy increases the appeal of battery electric MCVs and HCVs.

In addition to the subsidy, the Netherlands is expected to introduce a heavy goods vehicle charge (“Vrachtwagenheffing”),[8] in mid-2026, which , will apply to heavy goods vehicles weighing at least 3.5 metric tons. The average charge used to estimate figure 3 is EUR 0.097 per kilometer for MCVs and EUR 0.172 per kilometer for HCVs.[9] Zero-emission vehicles like BEVs would pay EUR 0.02 per kilometer for MCVs and EUR 0.03 per kilometer for HCVs. Although this increases overall costs for all technologies, it improves the position of battery electric vehicles.

At the EU level, ETS2 will likely increase diesel and natural gas prices (in Dutch) from 2027 onward (see figure 3). On average, we expect diesel to be EUR 0.14 more expensive per liter and natural gas prices to increase by EUR 0.10 per m3 for transport companies. In real terms, the implementation of EU ETS2 would add an estimated EUR 10,000 to fuel expenses for diesel HCVs and EUR 1,100 for MCVs (see figure 3). Battery electric HCVs and MCVs are expected to have average annual fuel expenses of EUR 32,000 and EUR 4,500, respectively, from 2025 to 2034.

[7] For more details on regulation visit: Rijksdienst voor Ondernemend Nederland

[8] For more details, refer to the regulation.

[9] According to the weight category of the commercial vehicle category defined in figure 2 and the CO2 emission class.

Note: We have assumed that the price of a metric ton of CO2 remains constant at EUR 55 per metric ton in 2023 prices, indexed to the CPI at an assumed rate of 2%. After 2029 the price increases to EUR 110 per metric ton at the 2023 price level and continues to develop at a 2% rate until 2034. Source: RaboResearch 2025

These policies collectively impact the TCO for battery electric MCVs and HCVs, making battery electric MCVs the lowest in TCO among all technologies (see figure 4). While the TCO for battery electric HCVs is lower than that of diesel vehicles, it remains more expensive than natural gas options.

Beyond ETS2, blending obligations on natural gas could add another EUR 0.12 to EUR 0.17 per m3. Additionally, the end of the reduced excise tax on natural gas and diesel could further increase fuel costs. However, both regulations have been delayed and may be postponed again. Therefore, we have decided not to include them in our calculations.

Closing the gap: Strategies to further reduce battery electric TCO

Both MCV and HCV fuel costs for battery electric options make up a significant portion of their TCO (see figure 3). Therefore, exploring ways to lower these costs is the first logical step to reduce costs.

Sourcing electricity behind the meter

Some companies might be able to increase their capital expenditure to potentially lower electricity costs by investing in a local battery system with solar panels, in addition to the charging infrastructure. So called sourcing behind the meter through a professionally managed energy system can significantly reduce the price paid per kWh by storing electricity when it’s cheap and using it to charge vehicles when it’s expensive.

To illustrate the potential impact of this solution, consider a company with five battery electric MCVs and five battery electric HCVs with a combined annual consumption of 722 MWh investing in solar panels and batteries, they might reduce their electricity costs by EUR 0.12 per kWh. In this example, the vehicle owner would save EUR 87,000 in total fuel costs per year. These savings will add up over the years and could also make battery-powered HCVs economically viable.

Additionally companies could face increased electricity prices through the transport cost component, following an increase in transmission tariffs from the Transmission System Operator (Tennet for the Dutch case). Such an increase would make the case for sourcing electricity behind the meter even more attractive.

EU guarantees for PPAs

However, not all operators may have the additional capital expenditure available. This is where the recently presented European Commission’s Clean Industrial Deal (“CID”) could play a significant role. One of the key policies championed in the CID is to leverage the European Investment Bank to provide guarantees for power purchase agreements (PPAs) aimed at small and medium-sized enterprises. PPAs can potentially offer lower electricity costs compared to the wholesale electricity market, making them an attractive option for transport companies.

Residual values are potentially higher than expected

After a period of seven to ten years of use, diesel trucks are often sold in secondary markets. If the vehicle is in good enough conditions, it may even have a third life in the best cases. This positive residual value helps reduce the TCO of the vehicle.

While replacing the battery to extend the asset’s life is common for battery electric buses, it remains to be seen to what extent this practice can be applied to commercial duty vehicles. The difficulty in assessing the residual value of BEVs stems from the lack of a second-hand market for electric MCVs and HCVs, due to their relatively recent rise in popularity.

With batteries potentially lasting longer than initially expected, the end-of-life of battery electric commercial vehicles could be higher than currently expected. However, even if the batteries are not suitable for a second life in vehicles, they might still have value in electricity storage applications. A few innovative startups have already begun reusing batteries from the first generation of passenger BEVs in electricity storage applications. As these markets develop further, we will have more data to estimate the end-of-life value of battery electric commercial vehicles.

Although battery prices are expected to continue decreasing, the main driver of vehicle price reduction will be the economies of scale realized by the vehicle’s original OEMs. According to a BloombergNEF lithium-ion battery price survey, battery pack prices decreased 20% in 2024 compared to 2023, reaching USD 115/kWh on average. BloombergNEF expects that battery pack prices will further decline to USD 80/kWh by 2030. Currently, batteries make up between 15% to 20% of the cost of commercial vehicles. Therefore, even a substantial 30% decrease in battery costs could at most translate into a 6% price reduction in vehicle prices, assuming OEMs fully pass the savings onto prices.

As a result, the reduction in battery prices alone is not sufficient to substantially bring down the TCO of battery electric MCVs and HCVs below the price of fossil fuel-based vehicles. Many factors beyond component costs determine the price, such as the expense of research and development (R&D), which must be recovered. If production volumes are low, each unit bear a higher percentage of the R&D costs.

The increase in production of battery electric commercial vehicles could potentially reduce prices. Currently, there are only 7,000 yearly registrations of battery electric MCVs and HCVs in the EU, which we assume to be close to the yearly production in the region. To meet the decarbonization objectives set by the EU C02 emission standards, according to BloombergNEF OEMs will have to increase their share of zero-emission vehicles sales to 33% of the total. This means that by 2030, OEMs would need to produce 100,000 MCVs and HCVs annually in the EU.

This increase in production could lower the average fixed costs per vehicle. According to our calculations, the price of battery electric HCV and MCV is likely to decrease by an average of 27% over the next five years due to economies of scale. Our estimate is based on the cost structure of manufacturers published by the US environmental protection agency,[10] which can serve as a guideline for how much prices might vary given increased production.

Assuming this 27% cost reduction is reflected in the vehicle price, we estimate that from 2026 onward, battery electric MCVs will be the cheapest option. However, under our current assumptions, battery electric HCVs will not achieve a lower TCO than fossil fuel alternatives within the next five years.

The expected decline in costs might be offset by an increase in input prices that we did not account for in the model, such as higher tariffs on imported inputs like batteries. On the other hand, if other markets reach economies of scale earlier than EU manufacturers, imported commercial vehicles might reduce prices more than initially expected from our analysis.

[10] This study includes European, American, and Asian manufacturers.

The business case for LCVs in the Netherlands is clear. If you can, go battery electric. Transitioning to a zero-emission fleet is financially advantageous because of the lower operating costs compared to other technologies. We expect the transition in this segment to continue without the need for specific policy support. An additional benefit of this already lower TCO is reduced first-mover risk: Companies do not immediately face a cost disadvantage compared to lagging competitors.

For MCVs, the currently most economical option is also battery electric, thanks to the supporting policies such as subsidies, reduced road charges, EU ETS2. These policies are not expected to undergo significant changes in the near future, making the transition to battery electric technology a logical choice. However, due to anticipated price reductions resulting from economies of scale, operators who do not require immediate changes might benefit from delaying their investment until more cost-effective models become available.

Natural gas is currently the most economical option for HCVs due to its significantly lower fuel costs. Under our assumptions, battery electric HCVs will not reach parity with other technologies in the coming years. Despite purchase subsidies, expected economies of scale, and reduced road charges for commercial vehicles, decarbonizing this segment remains challenging.