Arizona's state and local governmental entities are expected to retire nearly 20,000 cars and light trucks from their fleets over the next decade. Why not make some of them electric?
That’s essentially the argument of a new report, called Electric Vehicles Save Money for Government Fleets. Arizona cities, towns, counties and the state government could save $283 million, mainly in reduced fuel and maintenance expenses, if they collectively transitioned their light-duty fleets to electric when they retire older cars and trucks, according to the study.
Combined government fleets in Arizona total around 90,000 cars and trucks, excluding motorcycles and certain other vehicles.
State and local governments across the United States could save taxpayers much more, nearly $11 billion, in lifetime expenses by doing the same — purchasing electric vehicles to replace gasoline and diesel vehicles in their fleets.
The new study released Tuesday and an earlier report, both by the Arizona PIRG Education Fund and sustainability researcher Frontier Group, estimate Arizona's state government alone could save $26 million in lifetime vehicle-ownership costs by replacing just their cars and light-duty trucks with electric models. The 10 largest cities here could save nearly $80 million, while smaller cities and towns around Arizona, county governments and other public entities would share an estimated $177 million in savings.
That's in addition to health and other benefits from decreased air pollution.
“Buying, fueling and maintaining gas- and diesel-fueled fleet vehicles is a big expense for governments, especially when gas prices are high,” said Diane E. Brown, executive director of the Arizona Public Interest Research Group Education Fund. “Shifting to electric vehicles can save money for taxpayers by significantly reducing fuel and maintenance costs, while also improving air quality.”
Focus on Arizona big-city fleets
The earlier analysis of the municipal fleets of Arizona's 10 largest cities, titled Electric Fleets for Arizona, was published last fall. In that report, researchers surveyed representatives of Chandler, Gilbert, Goodyear, Mesa, Peoria, Phoenix, Scottsdale, Surprise, Tempe and Tucson. Those 10 cities collectively own and operate more than 10,000 vehicles from passenger sedans to dump trucks, fire engines and all-terrain vehicles, in addition to other motorized equipment such as forklifts.
But so far, Arizona cities haven't gotten much on board, with only 31 battery-electric vehicles and five plug-in hybrids in the light-duty fleets of the 10 municipalities studied, at the time the researchers surveyed them in late 2021. Some government fleets here use compressed natural gas but almost exclusively for bus service, Brown added. The studies didn't analyze the cost or emissions benefits from replacing vehicles powered by natural gas.
Installing charging stations and other infrastructure is expensive and a major reason that fleets are slow to embrace electrification. Some municipalities also cite the lack of comparable electric options, especially for larger vehicles.
Phoenix, for example, has been working to transition its fleet to include more zero-emissions technologies, with goals and processes outlined in a Transportation Electrification Action Plan adopted last year.
Some 215 electric-vehicle charging ports have been installed on city property, roughly half open to the public and the rest reserved for city workers and fleet vehicles. Also, Phoenix has 22 city electric vehicles currently in service, with 24 new orders for the 2023 fiscal year and 40 for fiscal 2024. Those figures exclude public transit, where the city has set a goal of transitioning its fleet of roughly 500 buses to entirely zero emissions by 2040.
Scottsdale operates a fleet of roughly 1,100 cars and trucks, some of which run on compressed natural gas but none yet on electricity. Most are heavy trucks that carry big loads of tools, equipment and supplies for which there are no suitable vehicles on the market presently, said Holly Walter, a city spokeswoman.
That said, “There are charging stations already in place in some city locations, and we’re working on additional electrical vehicle charging-station opportunities,” Walter added in an email. ”We are applying for grants and conducting analysis on which vehicles, when they reach the end of life, can be replaced with new alternative fueled vehicles.”
Vehicle electrification also is an objective cited in a climate action plan adopted by Mesa’s City Council in 2021 to achieve carbon neutrality and improve air quality. Current efforts include evaluation of newly purchased vehicles to support the climate plan as much as possible, along with the installation of charging stations to support the transition of the city’s fleet to electric models.
Recent federal legislation encourages the transition, especially the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, which provide new incentives for electric vehicles and charging stations.
Federal electric incentives including the Commercial Clean Vehicle Credit offer savings of up to $7,500 per light-duty vehicle or $40,000 per heavy-duty truck for purchases by government or private fleets.
Some utilities offer their own incentives. For example, the researchers cited Salt River Project rebates of up to $4,000 per charging port for government, school and nonprofit fleets and SRP incentives of up to $20,000 for fleets to conduct electrification studies.
Nevertheless, electrifying a municipal fleet isn’t as simple as switching out one kind of vehicle for another, the reports acknowledged. Such an effort would require careful planning “to provide the necessary charging infrastructure and identify the best opportunities for electrification, as well as workforce training to help fleet managers and drivers get the most benefit,” the authors wrote.
Local governments should consider partnering with one another and working with local power utilities and agencies such as the Arizona Corporation Commission to minimize the costs and maximize the benefits.
Light-duty vehicles including pickup trucks and vans weighing less than 10,000 pounds offer some of the best opportunities for electrification, based on the availability of models and other factors.
Automakers increasingly are committing to electrifying their fleets. Chrysler, for example, plans to offer a fully electric lineup by 2028, Volvo will sell electric cars only by 2030 and General Motors plans to sell only zero-emission vehicles by 2035.
Cost savings centered around fuel, maintenance
Of the $80 million in projected savings for the 10 Arizona cities in the earlier study, reduced fuel expenses would account for $52.6 million of that, followed by a $30.6 million reduction in maintenance/repair costs, as electric vehicles feature fewer moving parts. Conversely, insurance expenses would go moderately higher, at around $718,000, as would vehicle depreciation at $2.7 million.
Insurance costs are a bit higher because electric vehicles tend to cost more, Brown said.
Phoenix, with the largest fleet among Arizona cities, could see the most benefit, at about $25.1 million in ownership savings, the researchers estimated. Tucson could save $14.7 million, Scottsdale $11.4 million, Mesa $9.7 million and Chandler $5 million. The other five cities and towns each could realize savings ranging from $3.8 million to $2 million.
Nationally, state and local governments operate about 4 million vehicles, of which around 900,000 are expected to go out of service over the next decade, according to the researchers.
The new report, Electric Vehicles Save Money for Government Fleets, also includes detailed estimates of pollution reduction from electrifying government fleets.
Reach the writer at russ.wiles@arizonarepublic.com.
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