Buying in Bulk: Electrifying Fleets Across the Country
The Electrification Coalition (EC) is a nonpartisan, nonprofit organization that develops and implements a broad set of strategies to facilitate the widespread adoption of electric vehicles (EVs) to overcome the economic, public health, and national security challenges that stem from America’s dependence on oil. They provided technical support to the Climate Mayors initiative to help cities, counties, school districts, and other public entities leverage their collective buying power and accelerate the conversion of public fleets to EVs.
Sarah Reed is the EC’s Director of Programs, managing EV innovation projects including the Climate Mayors Electric Vehicle Purchasing Collaborative program. Matthew Stephens-Rich is the Director of Technical Services for the EC’s programs.
This interview is part of an FAS series on innovative procurement.
Ryan Buscaglia: Could you give a broad overview of what the Climate Mayor’s EV purchasing collaborative was and what the role of the electrification coalition was within that?
Sarah: This project, the climate mayor’s purchasing collaborative, was launched in 2018 by then Mayor Eric Garcetti of Los Angeles and a couple of other partners. It was an unprecedented effort to create a one stop shop for local governments and schools and universities to reduce some of those upfront challenges that exist with fleet electrification. This project is really focused on providing technical assistance to all of these types of nonprofit local government/public entities, as they look to purchase EVs.
We ask, ‘how can we make sure that every vehicle that’s being bought within the next year is electric? How can we provide that support, knowledge, and information on the fleetside to make that shift?’ So we pair that information and guidance from the electrification coalition with an easy option to buy this equipment.
You can buy all types of vehicles including school buses, garbage trucks, street sweepers, EV charging stations, and the EVs that we all pretty much know at this point (Chevy Bolt, the Nissan LEAF, etc.) through Sourcewell, which is a purchasing platform that sells all kinds of things.
Many local governments are familiar with Sourcewell from buying equipment for playgrounds, pens, chairs or anything that schools and local governments purchase. This initiative brought together us, that purchasing mechanism, and the climate mayors who were saying ‘we need to transition our fleet’. That’s how we looked at that approach, especially in 2018, when there weren’t quite as many EVs out there. Our role is the overall organization as well as that technical support.
Why are public fleets an important leverage point in advancing electrification?
Sarah: The EC’s mission is focused on improving economic and national security challenges and reducing dependence on oil. We have this history of working with communities and cities on EV adoption and knew that fleets were a sweet spot for several reasons. Fleets have predictable routes. So in general, most fleet vehicles drive within the city or they drive to and from different facilities. They have higher mileage than a vehicle you or I might drive, which increases the cost savings of an electric vehicle. And they also usually go home to one spot at night where they can charge. So they’re really good candidates to make electric. And we can help show some of the cost savings and the total cost of ownership. Matt can share more about that part.
Matt: 2018 doesn’t sound like that long ago, but where we were in the market at that point there were barriers that needed better solutions. First and foremost was market growth. Consumer adoption was going on in 2018, but definitely not at the clip it is right now.
We saw an immediate opportunity to bring public fleets as a leader in proving EVs and where they can be a best fit in fleet deployment. When you think about a fleet—average people don’t think about fleets often—you’re thinking about dump trucks, step vans, Amazon delivery, that type of thing. But it turns out public fleets have a significantly large light duty deployment: sedans, pickup trucks, etc. It’s everything from a parking enforcement vehicle, to courier vehicles, a whole slew of things that are running around town.
This made them a really good fit for electrification. It’s also a great way for cities to communicate their sustainability priorities and demonstrate what EVs look like in the wild. To this day we have a number of partners that signed on to the initial commitments with climate mayors that still send us back pictures. It just gives that demonstration of what EVs do look like in the wild. So that it’s not just a hypothetical, but something that’s real right in front of you.
While we had a lot of initial municipalities that were excited to go electric, they didn’t have reliable access. Typically you have to go through usual procurement—you have to go through a publicly bid RFP process, you have to get three vendors responding back, and go through a whole criteria set. It takes time, effort, and energy. The biggest critics of RFPs will be quick to point out you often end up with an inferior product to what you originally were hoping for.
Working with Sourcewell and our procurement partners we were able to use pre-bid contracts to eliminate the need for that and instantly go and purchase those vehicles that you wanted. We heard and still l hear stories of somebody saying “I’m looking for a Chevy Bolt or a Kia Niro or something like that and my local dealer didn’t respond to my RFP, so I can’t buy the vehicle I’m looking for. What do I do?” So that was a specific opportunity.
But as fleet options have grown between electric school buses, electric street sweepers, charging infrastructure, transit buses—we’ve continued to grow the offering in the EV purchasing collaborative. For instance, with the F150 Lightning and the E-Transit, the Ford options, those are amazing utility applications, big top requests right now for a lot of folks, which has been a really helpful key asset to that.
As Sarah also mentioned, in terms of the technical support we’re here to help usher folks through that procurement process. Pre IRA [Inflation Reduction Act] and Bipartisan Infrastructure Law [BIL] there was an opportunity to use the earlier EV tax credits through leasing. And then by leasing the vehicle from a leasing company or maybe a dealer or your procurement partner, you’re able to claim a pass through portion of the tax credit. A lot of municipalities never lease so this was the first time they were ever leasing a product. Often you just buy it outright using bonded money or something to that effect. So there was a lot of technical support in terms of procurement.
We also provide fleet analysis support through our free to use Drive tool—Dashboard for Rapid Vehicle Electrification (DRVE)—which you can download from our website. Anyone can use it. It’s designed to provide a quick analysis. A lot of fleet managers are bought into electrification, they don’t need the whole proofing of “what is an EV? where do I charge it?” They have a lot of that figured out. It’s really just the question of “okay, what is the exact model that I should be thinking about? Or what would a Total Cost of Ownership (TCO) look like?” They’re pretty bought in but just need some of those final touches to gut check it.
That brings up so many follow up questions from me, the first is why do electric street sweepers have such high demand?
Matt: Street sweepers were really popular in part because what’s one thing that every city has? It is a street sweeper or a refuse truck. At that moment, it was kind of a cool thing we had an electric street sweeper and said let’s do an informational webinar and get the word out on it. That was the most attended webinar we had hosted to date. And it was because there were a lot of good use applications and a lot of city fleet vendors were really excited to hear about that. Definitely a great example of finding vehicle options ripe for electrification.
We’ve grown like Sarah mentioned with nonprofits and we have done a lot of work with universities. State fleets as well. While city fleets are a great place to start, we work with all public entities big and small. We’ve had the chance to work with and help them through the process, especially again to the market growth. One thing we really emphasize is you are not expected to use our procurement partner, it’s just one of many options. So above all else, we’re here to help you find the most cost effective, most time efficient way to get your vehicles deployed. In those moments, we’re really just really on hand to help out folks through any specific part of the process.
How did the Climate Mayors’ collaborative that you all are a part of come together? And what were some of the challenges of putting together such an aggregated purchasing vehicle rather than working with people in a one-off fashion?
Sarah: Mayor Garcetti had a really strong sustainability platform and he did a ton of really exciting things in the city of Los Angeles. One of those things was around electric vehicles at the community / fleet level across the city and he was a cofounder of the climate mayor’s organization.
There are a group of cities that put together a request for information out to automakers to say, “We’re a couple of really large cities (Seattle, LA, etc.) and we want to buy this many fleet vehicles, we want to electrify them, and you need to make vehicles for us to buy.” This was a market indicator from all these large cities that the demand is there. The EC had a history with Sourcewell and built up some of those other relationships to turn that initial action into a project that could provide the support [for cities].
To make sure I’m understanding it right—there were three main entities involved here. You have the Climate Mayors that came together issuing a call and committing to purchasing a certain number of electric vehicles that they thought would meet their goals as cities and locales. You have the Electrification Coalition functioning as an overarching organization and technical support provider, working through details and analysis. And then you have Sourcewell, who’s the actual vehicle point provider who they can go to as an “easy button”. Once cities determine something meets their needs they can procure it quickly from them. Is that right?
Sarah: Yes, perfect! And you did ask about initial commitments. So there was that RFI, and then when we launched this program, there were about 20 cities and counties committing to a couple hundred EVs. This project has been focused on immediate action. So we didn’t care about saying, “Oh, by 2030 we’re gonna electrify our whole fleet.” That wasn’t what this was about. This was about next year—what vehicles are already turning over and how we can make them electric?
The peak of commitments was over 6,000 vehicles that fleets were looking at purchasing. Several thousand were purchased. And so that initial commitment grew from 20 or so folks, when we launched this program in 2018, to several hundred local governments that are a part of this effort.
Besides the thousands of vehicles, are there any other impact or success measures that you have from this specific program that you’d like to talk about?
Sarah: So it’s about 450 cities and counties and the actual commitments to purchasing vehicles has the potential to reduce over 2 million annual gasoline gallons, as well as 46 million annual tons of CO2 emissions. We’ve also written some case studies and provided other reports and resources.
Matt: A big key to success too, especially in those early days, we focused on investing into the relationships we were building with cities. The biggest thing about procurement is it’s always happening. So you’re always planning for that next one, two, or three rounds, forecasting procurement planning across a number of years. So we focused on those initial quick hits, and then focused on how we can grow those purchase orders over time with partners. Having all the analysis set really helped. We also did a lot of work with cities on setting up what we call “EV first” procurement policies. So essentially taking the city’s own internal procurement policy and kind of flipping it on its head.
Traditionally, the assumption is you’re going to buy a gasoline or diesel vehicle, not anything that you have to defend. We flip it and say EV is actually the assumed norm and if it’s not going to be that they have to work down to the decision tree to get to buying a regular gasoline or diesel vehicle. Now, we are still working with a lot of those original cities. Many of them are staying on target for broader 2030 goals, like Sarah mentioned, but even then, there’s all types of barriers that can crop up along the way.
Do you do any work around planning for the end of life asset problem with localities so those vehicles are gonna break down, they’re gonna need to replace those on a timeline eventually. How do you manage that transition and handle scrapping or selling to a secondary market?
Matt: To be honest, it doesn’t just start with EVs. Very few fleets can just outright scrap and replace vehicles. Often you have something in a primary use and then you’re putting it into a secondary use. It’s quite literally in the back, we’re going to use it on an as needed basis. Indeed, should a vehicle have to go in the shop, we have the backup that can come into deployment. So we actually started into that with those first EV purchases. Often those gasoline vehicles were not being immediately retired or sold off or sent to a scrapyard, but put in a secondary use on hand as needed. Very rarely driven, to be honest, but just still there.
That asset management is a critical piece to it. Going back to the leasing structure—that creates a whole new world for secondary life and addressing how do you deal with the end of life for that vehicle? Those public fleets that were going down the leasing route, often that was in a closed ended lease or with an option to buy it out at a later date.
So that was a way to hedge a bet because electric vehicles in general really are taking a shape and arc of evolution more similar to your smartphone than a traditional vehicle. The range only gets better, charging speeds get better. So that was one way folks were a little more comfortable with committing to procuring. With a closed ended lease, they knew they were giving it back to the dealer and not just going to have the vehicle on their hands and working out what do we do with it?
In sending to scrapyards, it’s interesting because there is actually a lot of asset value. There are so many rare and critical minerals in the vehicles and battery packs. It’s a growing industry—Redwood Materials is a growing recycler who I heard speak once. They put it saliently describing how all the material of a battery is there from day one to the last day. There are a lot of amazing efforts on materials reclamation. We actually have a Critical Minerals Center that is a sister program and effort that goes upstream and thinks about how to bring mineral security onshore. That’s all to say that public fleets will be a part of that flow. Fleets are a really good test case because fleet managers take their jobs very seriously when retiring an asset, whether that’s selling, recycling, or taking it to auction.
Are there any other ways to de-risk the end of life problems for public procurement?
Matt: Another example is EV transit buses. There are a number of transit bus companies with great EV options, and clever leasing options to lease the bus and the battery as separate assets. It addresses the questions about how battery life will fare. That’s been an option too, decoupling the battery from the vehicle and thinking about them as two separate assets that work together. It creates fascinating procurement options. There were terms, for instance, where you lease a bus for a ten year period but you have a five year term on the battery and you get a fresh battery at the five year mark. Assuming you’re keeping up with other things—suspensions, tires, etc.—that just need inspection and upkeep you can keep it on the road for a while.
Sarah: I’ll clarify that while we do work on transit buses and have helped many cities with them, they are not a part of this program because there are very strict FTA rules about how you can sell them.
Could you talk more about the DRVE tool and how important that information is when it comes to helping cities with their planning?
Matt: Call it right place right time. As we were launching the EV purchasing collaborative we were talking with friends at Atlas Public Policy who do a lot of market research and tool creation. We were grabbing a drink at a conference talking about how all of the total cost of ownership calculators out there are clunky and hard to use. From that, the DRVE tool was born.
We wanted to focus on what’s the tool for the masses, not the folks that can dedicate a lot of resources and time. We want people to be in and out in an hour and have a good assessment of where EVs could be a good fit. We wanted it to be open-source and free to use, something that anybody could download and run with—it’s Excel based. We designed it so that it talks to a variety of federal source databases like fueleconomy.gov, the Alternative Fuel Data Center, etc. The vehicles in it update automatically. If you run it in a couple months you’ll start to see 2024 model year vehicles start to populate it.
It was something we needed for our own practice, but realized it was effective and that we could release it publicly. You can upload any fleet data tracking that you use— we’ve worked with folks who have had to fax us their data sets. We saw a need to work with a wide variety of file formats.
How has the IRA affected what you’re trying to do with the electrification coalition and what is your vision for the next couple years that you’re excited to work on?
Matt: Our vision is we’re not going to sleep!
We have continually added to the DRIVE tool adding new features. We added more forward, navigating EV incentives and charging procurement incentives too. Between the BIL and IRA there are a lot of new provisions. Specific to the IRA, the commercial clean vehicle tax credit is going to be most relevant for public fleets. We’re reloading the site daily now on what was formerly called “direct pay” now called “elective pay”. Everything we described to you about pass-through working with dealers, leasing has changed now because public fleets can file for these tax credits directly and claim the entire benefit. Now the challenge is on us to make sure we’re digesting that information and getting out to the masses and being sure folks are understanding of the steps it will take to get this set up. Another implication of this new funding is the focus on charging infrastructure. The charging and fueling infrastructure round that just became available as part of the $7.5 billion provided by BIL—we supported 50 applications to that, did countless webinars and phone calls.
Any last thoughts from you, Sarah?
Sarah: This program has helped a lot of folks get ready to take advantage of these incentives and become more familiar with electric vehicles. We’re focused on helping cities of all sizes (not just the usual suspects). We helped 50 cities and many of those were very small, or rural, or didn’t have a fleet sustainability person. We’re trying to expand who has access to these vehicles on the city side of things. Also creating wholesale tools—while our individual support is great there’s only a few of us.
This is the way the market is going. I don’t know if you could say that five years ago you could have had everybody saying that, but I doubt there are that many folks out there in cities unsure that this is what the future is going to look like. Taking advantage now while there are incentives, tax credits, and state programs that provide incentives for this transformation is critical. If you don’t act now you’ll be behind, there will be less resources out there. Now is the time to act and have more buy in.
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