By Drew Veysey, Hannah Thonet
There’s never been a better time for fleet electrification, new RMI analysis finds. Across a range of scenarios, it’s cheaper to own and operate light- and medium-duty electric vehicles than gas-powered vehicles, making a strong business case that now is the time for private and government-owned fleets to make the switch.
Battery electric vehicle (EV) costs have been declining for years, and incentives from the federal Inflation Reduction Act provide additional support, reducing upfront vehicle and charging installation costs for millions of vehicles and bringing total cost of ownership into cost parity or better. This is a boon for the nearly 12 million vehicles in the United States that belong to a public or private fleet: state and local governments have a powerful economic case to lead by example and reduce their climate and air pollution, and private fleet owners can take advantage of generous subsidies to upgrade their fleets.
RMI analyzed data using the Dashboard for Rapid Vehicle Electrification (or DRVE, a tool developed by Atlas Public Policy and the Electrification Coalition) across a range of scenarios. The result? Electric vehicles have a 9 percent lower total cost of ownership than equivalent fossil fuel vehicles, even when the cost of charging infrastructure is included. Notably, this analysis only incorporates the federal tax incentive for buying a new commercial EV, but dozens of states have established additional vehicle and charging subsidies that can stack on federal incentives, making EVs an even more cost-effective choice.
In addition, switching to electric vehicles eliminates 100 percent of tailpipe emissions and over 75 percent of climate pollution from vehicles when including the upstream emissions of electricity generation. Nitrogen oxide and particulate matter pollution also decrease by 90 percent (NOx) and 50 percent (PM 2.5) per vehicle.
The bottom line: governments and businesses with fleets can start saving money and reducing pollution now by switching to electric vehicles.
Comparing vehicles across scenarios
Fleet operators consider several factors in deciding which new vehicles to procure, particularly Total Cost of Ownership (TCO). A TCO calculation includes vehicle purchase price, financing, depreciation, and expected fuel and maintenance costs. We compared the total cost of ownership for electric vehicles to equivalent fossil fuel vehicles in five different use case scenarios: private security, patrol cars, construction contractors, paratransit, and a large delivery company. Each comparison is between a fossil fuel vehicle commonly used in that scenario (e.g., Ford F-150 truck for construction contractors) to its nearest possible electric equivalent (Ford F-150 Lightning truck) for the same amount of annual mileage and expected years of use.
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