'It’s Not that Simple,' Fleet Managers Say About Electrification Cost Savings Analysis

Fleet managers are responding to a report by the Arizona Public Interest Research Group Education Fund and Frontier Group on projected cost savings public sector fleets could see if they electrify their light-duty vehicles.

In the June 2023 report, “Electric Vehicles Save Money for Government Fleets,” the authors asserted that state and local governments across the United States could save a total of nearly $11 billion in lifetime expenses by purchasing EVs as opposed to internal combustion engine vehicles for their light-duty fleets over the next 10 years.

The Analysis at a Glance

The report came on the heels of an analysis of the potential fleet electrification cost savings to Arizona public sector fleets made by the same researchers.

Frontier Group Associate Director and Senior Policy Analyst Tony Dutzik told Government Fleet that the results from the Arizona report suggested similar savings were likely available for other local and state governments around the country.

Here are some details the authors noted, based on their research:

• State and local governments own approximately 4 million vehicles.
• Roughly 900,000 of those are light-duty vehicles that are expected to be retired over the next 10 years, for which electric options are currently at production scale. This includes sedans, pickups, SUVs, and vans.
• The biggest cost of ownership savings would come from fuel costs (68% reduction) and maintenance costs (37% reduction).

The savings do not include the upfront cost of additional infrastructure needed to support EVs. The savings, according to the authors, represent a long-term investment supporting multiple fleet vehicles over time and, in many cases, expanding charging access for the public.

The states with the highest percentage savings from EV adoption are Idaho, Utah, Oregon, and Washington, all western states. That’s because gasoline prices are high and commercial electricity prices are relatively low, the authors noted.

What Fleet Managers are Saying

Longtime fleet managers Darryl Syler, CPFP, and Charlotte Ashcraft argue that the report oversimplified a complicated process. Fleet electrification is not an easy transition for fleets to make, they said, because of all that is entailed in the process.

Ashcraft, director of fleet management for Franklin County, Ohio, Commissioners, responded to the statement about the “significant” savings the report’s authors said fleet managers will see.

“Yes over time; over a long time,” Ashcraft responded. “They always state that like we are going to save money right now. Nope, we are going to spend more money purchasing them, and the break-even point on the savings takes multiple years to be realized. I am always annoyed with that statement. It is true, but it is misleading.”

She commended the authors for noting that the savings would come over 10 years, but she felt that the report could come across as deceptive to readers.

It’s also difficult to know what the resale value will be for the vehicles when fleets are ready to sell them. 

“EVs have not been on the market long enough, especially when you get into the vocational side of the house: the vans, the pickup trucks, or whatnot,” said Syler, fleet services division chief for the City of Alexandria, Virginia. “We don't know what the residual value what the value is once we turn them in. There's still a lot of unknowns out there.”

Syler also believes a large-scale transition to EVs could take much longer than advocates expect.

“It wasn’t up until the last 15 years that we've gone from dirty diesel engines to clean air diesel engines. It took a long time to get to there,” Syler added. “It’s going to be a minute…Let’s not rush the market with all-electric vehicles. Let's take our time and do the right thing.”

Syler believes other alternative fuels like compressed natural gas might be a more realistic option for fleets.

“We don't need to [just] look at fleet electrification. I think what we need to look at is fleet sustainability. Let's not rush to electric. But in the same sense, let's look holistically at all alternative fuels,” Syler stressed.

Fleet Electrification Hurdles to Address

The report noted some of the various funding opportunities to assist with EV adoption on the state and local level. These are not always attainable without a great deal of work, fleet managers argue.

“They make it sound so easy to get those; it is not. Paperwork, processing, reports, and other administrative things cause that to not be as easy as it sounds,” Ashcraft said. “I guess if everyone had a grant writer or department that focused on this stuff it would be much easier. Typically fleet’s don’t have that.”

In response to funding concerns, Dutzik pointed out that the report called on local and state governments, as well as electric utilities, to provide incentives and technical support to ease the transition.

The ability to electrify fleets not only depends on funding, but it also depends on vehicle availability. The report authors called on fleet managers to “make bold commitments and stick to them.” This is not always possible in a certain timeframe, given the array of factors out of a fleet manager’s control.

“We did [make commitments], and then the manufacturer couldn’t produce the vehicles. So we had a choice: either purchase a traditional vehicle and get it, or have nothing,” Ashcraft said. “There are a lot of factors out there that we ‘government fleets’ have no control over.  We can have all the greatest ideas and make those bold commitments, but in the end, we don’t have the power to make them come to fruition.”

The authors know the transition will not come without bumps in the road. But they hope the report opens a dialogue to further — or begin — the process.

“We hope that public sector fleet managers will use the report to inform their future vehicle purchasing decisions and their approach to electrification,” Dutzik said. “Electrifying government fleets is not without challenges, but the report shows that there are significant benefits to taxpayers that make it worth the effort.

Arizona Public Interest Research Group Education Fund Executive Director Diane Brown praised steps being taken across multiple industries that could assist with fleet electrification.

These include commitments by automakers to new EV models, NGOs that tout the many benefits of EVs, utilities investing in essential infrastructure, and federal funding being made available.

“There are a number of stakeholders that are ready and willing to assist fleet managers in the transition to transportation electrification,” Brown said. “Fleet managers are encouraged to reach out to supportive local entities and experts to overcome barriers, build support, and learn from diverse experiences."

Missing Crucial Fleet Segments

Syler and Ashcraft believe the report’s authors only addressed a small piece of the puzzle, avoiding segments of fleets that can be harder to electrify, even though they are still very important to take into consideration.

“They're looking at sedans and pickup trucks. They're not looking at the entire ball of wax, if you will. And you can't do that. You have to look at it holistically, and not pick out what best suits that report,” Syler said. “There’s some great stuff in [the report] when you look at. But tell the rest of the story. Will those sedans and pickup trucks fit the mission of what that organization is doing? In other words, can I put on an electric pickup truck in here to plow snow where I need a vocational style truck, or I need a certain type of truck to go a long distance?”

The report also excluded first responder vehicles, a segment Ashcraft believes is crucial in addressing in the fleet electrification discussion.

“They are the biggest users of fuel in any fleet and they left them out of the report? Why? Because they would skew the numbers. Most of our government fleets are first responders, so leaving them out of a government fleet analysis seems odd to me,” Ashcraft said.

It is worth noting that many fleet electrification plans for local and state government fleets also exclude first responder vehicles, due in part to the lack of available electric emergency vehicle models on the market.

The Bottom Line: Putting the Cart Before the Horse

The consensus among fleet managers seems to be that while these kinds of reports have helpful information, they tend to aim to simplify a complicated process with many players and many factors.

As Syler puts it, it’s the age-old notion that you can’t put the cart before the horse.

“Yes, we all want to purchase EVs and alternative fuel vehicles. But they are not out there to have; the manufacturers can’t keep up with demand, the infrastructure is still in the slow stages, and there is a lot of work to be done,” Ashcraft said. “We all want to be frugal, efficient, and environmentally aware, but our actions alone can’t make it happen. We need many partners to get on board with us: the manufacturers, the electric providers, the charging station vendors and installers, and so many more.”

What are your thoughts on this report? Keep the conversation going in the comment section below.

Originally posted on Government Fleet