Summary
- People who own cars focus mostly on the purchase price and the monthly payment, ignoring other costs like fuel, maintenance, and repairs
- Fleet operators analyze total cost of ownership to the hundredth of a penny per mile for over 12 million fleet vehicles in the US
- Electric vehicles have a 9% lower total cost of ownership than fossil fuel vehicles, even when including charging infrastructure costs
- Switching to electric vehicles eliminates tailpipe emissions and reduces climate pollution, making EVs a cost-effective and environmentally friendly choice
- Fleet operators can take advantage of tax incentives and state subsidies to make the transition to electric vehicles financially rewarding
Article
Individuals who own cars and trucks may not be fully aware of the total cost of ownership for their vehicles, as they typically only focus on the purchase price and monthly payment. However, fleet operators meticulously calculate costs down to the hundredth of a penny per mile. According to RMI, there are over 12 million fleet vehicles in the US, including those owned by government agencies and private corporations. Analyzing fleet total cost of ownership for electric vehicles, RMI found that electric vehicles have a 9% lower total cost of ownership than equivalent fossil fuel vehicles, despite including the cost of charging infrastructure.
Switching to electric vehicles offers both tangible and intangible benefits. Electric vehicles eliminate 100% of tailpipe emissions and over 75% of climate pollution from vehicles, including upstream emissions of electricity generation. Nitrogen oxide emissions decrease by 90% and fine particulate pollution is reduced by 50% per vehicle. When conducting total cost of ownership analysis, professional fleet managers consider factors such as purchase price, financing, depreciation, fuel, and maintenance costs. RMI compared the total cost of ownership for electric vehicles to fossil fuel vehicles in various scenarios, finding that electric vehicles are cost-effective in most cases.
The cost of fuel is a crucial factor in determining total cost of ownership, and with the national average fuel price at $3.50 per gallon or higher, electric vehicles generally offer savings or cost parity, even when including charging infrastructure installation costs. Relying on public DC fast charging was found to be cost prohibitive in most cases, making Level 2 depot charging infrastructure a more economical choice for fleet owners. State and local incentives, such as the 45W Tax Credit and Alternative Fuel Vehicle Refueling Property Credit, can further reduce upfront costs for purchasing electric vehicles and installing charging infrastructure.
The upfront costs for larger fleet vehicles, like heavy duty trucks, may still be prohibitive even after tax credits. To accelerate the use of large and medium electric heavy duty trucks, additional purchase incentives may be needed. RMI suggests that states adopt Advanced Clean Cars and Advanced Clean Trucks regulations to incentivize automakers to offer competitive prices for electric models. By transitioning to electric vehicles, fleet operators can lead the way towards reducing emissions and improving air quality.
Public fleets, in particular, should set the example for transitioning to electric vehicles to combat climate change. By electrifying 80% of state and local government light duty vehicles over the next five years, a cumulative climate pollution reduction of 37.4 million metric tons by 2050 could be achieved. This would have a significant impact on reducing emissions and improving air quality. Supporting the transition to electric vehicles will not only benefit fleet operators in reducing costs but also contribute to a cleaner and more sustainable future for all.
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