Why Municipalities Are Using EVs (Part 1 - Cost and Time)

November 6, 2019

Electric vehicles sales in the US surpassed one million vehicles in 2018. The consumer traction is significant but fleet and government/municipal sales are growing rapidly. Madison, Wisconsin and New York City are sporting EV taxis. Nashville and Chicago have EV-only black car services. There are good reasons why municipalities and local governments are making the move to electric vehicles.

EVs help reduce overall costs of operating a fleet and they reduce downtime from maintenance and repairs. Operating costs are lower with fewer moving parts and longer life cycles on durable EV motors.

Reduced Maintenance Cost

Gas powered vehicles have engines and transmissions with thousands of moving parts that fatigue and fail over time. EVs require half the number of components to operate. EVs don’t have oil, fan belts, air filters, timing belts, head gaskets, turbo charges, cylinders, valve assemblies, or spark plugs.

EV regenerative braking can extend the life of brakes on EVs. An EV’s engine is able to slow itself down using regenerative (charging) braking, reducing the usage of brakes and simultaneously charging the battery. Imagine driving down the Rocky Mountains and the battery is charging as you descend.

Electric vehicles don’t require the level of maintenance that those with internal combustion engines (ICE) do. In general, maintenance for an EV is 1/3 the cost of an ICE vehicle. This helps municipalities reduce fleet operating budgets. Municipal vehicles such as buses are complex, sophisticated items, and switching to an electric fleet helps to take some of the burden off of the mechanics keeping them maintained.

Not only do municipalities save on the actual cost of parts and repairs, they can reduce the size of their maintenance departments, keeping labor hours and overtime to a minimum. This is true for everything from a sedan that might be used by a city supervisor to a large bus that brings dozens of people to their destinations in a single trip.

leet vehicles are meant to be used.  When they are unable to perform their tasks, whether it be undercover work, issuing permits, citations, speeding tickets, or providing public transportation, the work is moved to another vehicle, person, or department. EV’s contribute to a more efficient operation overall – whether it’s a public transit or a private passenger system. Fewer backup vehicles are required and overall fleet costs decline.  Fleets can retain vehicles longer as EV life cycles are 50-100% greater than ICE vehicles.

Reduced Downtime

Electric vehicles have proven to be far more reliable and have very little downtime when compared to internal combustion engines. There are no oil changes, rarely brake pads, no tune-ups, no squealing belts.  Tires remain a constant repair item on all vehicles.  Lower downtime reduces the number of vehicles required in the fleet as utilization of the vehicles is higher for EVs vs. ICE. EV’s are smart and monitor themselves very carefully and send alerts immediately that are available to the driver and to the fleet manager via the OEM’s API.  

Public transportation is vital for any dense city and having a bus fleet that is less prone to breakdowns is a major advantage. Bus repairs can be timely and expensive, but electric buses are far more reliable and will be able to service more people in the same amount of time. When it comes to the general public, they want to know that their bus will be on time and get them to their destination. EVs have shown that they can get the job done with minimal downtime.

EV fleets of pickups, vans, plow trucks, dump trucks, tanker trucks will come with time and continue to reduce fleet operating costs.

Higher Longevity Rates

Because there are fewer moving parts and less wear and tear, EVs have a much longer lifespan than ICE vehicles. For a fleet of hundreds of vehicles, this is significant. Municipalities have limited capital budgets. Extending the life of each vehicle in the fleet results in direct reduction in annual new vehicle acquisitions. Thanks to the reliability and longevity of electric vehicles, a municipality can make an investment that will last them far longer than if they bought traditional cars and buses.  

This, in turn, drives the cost of every ride down. If a municipal service vehicle or police vehicle lasts for 8 years instead of 5, that’s over $45,000 per vehicle saved. If the entire fleet is made up of more reliable longer-lasting electric vehicles, a city could save millions of dollars in the long run.

Fuel Cost

The cost of fueling an ICE is easy to measure. It gets a little more complicated to measure the cost of charging an EV battery. The Department of Energy has an eGallon tool that is updated regularly. It compares the cost of driving a mile on gasoline vs. a mile on electricity, depending on where the energy is being purchased and the prices at the time. Depending on the location, time of year, global energy markets, etc., the cost for gas vs. electricity can be two to three times the cost.  In other words, charging is approximately 1/3 or less compared to the cost of fueling.

Total Cost of Ownership

Total cost of ownership includes lifecycle costs plus administrative costs. Many organizations focus only on acquisition cost. Looking primarily at acquisition costs is myopic and can lead decision makers astray.  Like most aspects of life, looking at the whole picture, today, tomorrow, and long term drives better decision making.

Vehicle lifecycle costs includes three factors: acquisition cost, disposition value, and operating cost. Administrative and overhead costs include factors such as downtime, opportunity costs of time and capital, as well as administration of the fleet. Imagine the municipal workers who need to drop their vehicle off at the service shop for an oil change.  They must wait for it or transition their gear/equipment out of their vehicle to a loaner vehicle.  It can take 1-2 hours each time.

What this all means is that even if an electric vehicle costs more up front, the city is going to pay far less over the long term if they switch to EVs. By the time an ICE vehicle has reached the end of its life, the city will have paid far more in fuel costs, repairs, and general maintenance than they would for an electric vehicle, even with the higher initial acquisition cost. Consider depreciation rates of an internal combustion vehicle, and this becomes even more of a disparity.

Having an electric vehicle fleet helps cities to save money and allocate resources more wisely without sacrificing anything on performance. EV’s can also benefit the environmental commitments municipalities and government agencies make to constituents.  Bottom line - EV’s are the future and for good reason.  Consider the benefits of transitioning sooner and beginning to test the performance, reliability, and longevity of EV’s versus traditional ICE vehicles.  

Larger and more robust EV’s are coming for vocational work and heavy duty trucking operations.  In the meantime, dip your toes before you take the high dive.  Then dive.  It’s transformative and will drive positive results, experiences, and culture. Your community and constituents will thank you.