Electric Fleets for Arizona
Saving taxpayers money through municipal fleet electrification
Cities and towns in Arizona spend millions of dollars each year to purchase, fuel and maintain a wide variety of fleet vehicles – sedans, pickup trucks, emergency vehicles, passenger vans, road maintenance vehicles and many more. Nearly all those vehicles are powered by gasoline or diesel fuel, which are costly and contribute to Arizona’s air pollution. Electric vehicles (EVs) can save money for cities and towns because they are cheaper to fuel and to maintain. A rarity just a decade ago, electric vehicles are becoming increasingly affordable and capable, and with automakers introducing new models every year, EVs are becoming a viable option for many of the tasks municipal vehicles are required to perform.
Cities and towns in Arizona spend millions of dollars each year to purchase, fuel and maintain a wide variety of fleet vehicles – sedans, pickup trucks, emergency vehicles, passenger vans, road maintenance vehicles and many more. Nearly all those vehicles are powered by gasoline or diesel fuel, which are costly and contribute to Arizona’s air pollution.
Electric vehicles (EVs) can save money for cities and towns because they are cheaper to fuel and to maintain. A rarity just a decade ago, electric vehicles are becoming increasingly affordable and capable, and with automakers introducing new models every year, EVs are becoming a viable option for many of the tasks municipal vehicles are required to perform.
A survey of fleets in 10 of Arizona’s largest municipalities shows large potential for cost savings from vehicle electrification. Ten of Arizona’s largest cities and towns could save a total of nearly $80 million in lifetime vehicle ownership costs by replacing light-duty vehicles in their fleets at the end of their useful lives with EVs. Recently adopted federal legislation – including the bipartisan Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) – provides valuable new incentives for electric vehicles and infrastructure, making fleet electrification even more attractive to municipalities.
Electrifying a municipal fleet is not as simple as switching out one kind of vehicle for another. It requires 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 from the transition to electric vehicles. Arizona cities and towns should commit to electrifying their fleets, develop detailed plans to guide the transition, and partner with other municipalities, as well as utilities and state government, to minimize the costs and maximize the benefits of electrification.
Replacing retiring light-duty cars and trucks with electric vehicles over the next decade can save 10 Arizona cities and towns a total of nearly $80 million in lifetime ownership expenses.
Ten of Arizona’s largest municipalities collectively own thousands of vehicles and spend more than $110 million each year to purchase, fuel and maintain their fleets.
The 10 large Arizona cities and towns surveyed for this report (Chandler, Gilbert, Goodyear, Mesa, Peoria, Phoenix, Scottsdale, Surprise, Tempe, Tucson) collectively own and operate more than 10,000 vehicles and pieces of equipment, from passenger sedans to dump trucks to fire engines to all-terrain vehicles. State and local governments in Arizona own a total of 48,000 registered motor vehicles.
- About 6,100 of the vehicles currently owned by surveyed Arizona cities and towns are light-duty vehicles, which provide the best near-term opportunities for electrification. About 70% of those vehicles are pickup trucks and vans, and roughly 40% of those vehicles are one of two models of half-ton pickups: the Ford F-150 and Chevy/GM Silverado/Sierra/1500 pickup. (See Figure ES-1.)
Figure ES-1. Light-duty (<10,000 lbs. Gross Vehicle Weight Rating) vehicles in fleets by type, 10 of Arizona’s largest municipalities
- There are very few electric vehicles currently in Arizona municipal fleets, with only 31 battery-electric vehicles and five plug-in hybrids in the light-duty fleets of the 10 municipalities studied at the time of the survey (late 2021).
- Cities and towns spend millions each year on vehicle purchases and on fuel and maintenance for their fleets.
- Surveyed municipalities spent a total of $35.1 million to buy the model year 2020 and 2021 vehicles in their light- and medium-duty fleets, for an average of $34,511 per vehicle. Assuming these represent two years of vehicle purchases, the municipalities surveyed spend upwards of $17.5 million on light-duty vehicle purchases per year.
- Total fleet maintenance costs exceeded $65 million in the most recent year of data available.
- Fuel expenditures for the cities and towns totaled $33.5 million in the most recent year for which data were available.
Electric vehicles are an emerging alternative to gasoline and diesel vehicles.
- Electric vehicle technology is improving by leaps and bounds. Today’s electric vehicles are more capable and cost less than the vehicles on the market just a few years ago, and there are many models to choose from.
- The median driving range of new EVs tripled between 2011 and 2020, to over 250 miles per charge.
- Analysts now project the upfront costs of EVs will achieve parity with gasoline-powered vehicles by the mid-2020s. Incentives available to municipalities under the IRA are expected to reduce or eliminate the difference in upfront costs between electric and gasoline- or diesel-powered vehicles.
- Automakers are increasingly committing to electrifying their fleets. The Chrysler brand will offer a fully electric lineup by 2028, Volvo will sell only electric cars by 2030 and General Motors plans to sell only zero-emission vehicles by 2035.
- There are viable electric alternatives for many of the vehicles in Arizona municipal fleets. Roughly 30 models of battery-electric vehicles, in approximately 80 configurations, were available in model year 2022, according to the U.S. EPA, with more arriving in model year 2023. These vehicles include the Ford F-150 Lightning pickup, the electric version of one of the most popular vehicles in Arizona municipal fleets, which debuted in 2022. Plug-in hybrid vehicles provide another electric alternative for vehicle types for which fully electric alternatives do not currently exist.
Arizona cities and towns can save tens of millions of dollars over the lifetime of their fleets – while helping to clean up Arizona’s air – by switching to electric vehicles.
- Over the next decade, the Arizona municipalities surveyed for this report are likely to need to replace over 4,000 light-duty vehicles.
- Replacing the light-duty vehicles in categories where cost-effective electric vehicles are available now or will be soon would save the Arizona cities and towns surveyed nearly $80 million in lifetime ownership costs, according to a model developed by the Argonne National Laboratory, reducing the total cost of ownership of those vehicles by 26% (not including one-time costs for the build-out of charging infrastructure). (See Table ES-1.)
The bulk of the savings result from reduced expenditures on fuel, maintenance and repair.
Table ES-1. Cost savings from replacing retiring light-duty municipal fleet vehicles with EVs over next 10 years, 10 large Arizona municipalities
|Expense category||Lifetime savings (parentheses indicate increased expenses)|
|Vehicle cost (depreciation)||$(2,738,151)|
|Diesel exhaust fluid||$258,897|
|Maintenance and repair||$30,567,898|
|Total cost of ownership savings||$79,977,245|
- Electrifying vehicles will also reduce air pollution, especially emissions of nitrogen oxides (NOX) and volatile organic compounds (VOCs) that contribute to Arizona’s problems with ozone smog. In the 10 large Arizona municipalities surveyed, the economic value of these air pollution reductions are estimated to approach $14 million over the lifetime of the vehicles. While electrification would result in a small increase in emissions of large particulates (PM10) from power plants in the short run, Arizona’s electric grid is forecast to become much cleaner in the years ahead, leading to the additional air pollution reductions in the years to come. (See Table ES-2.)
Table ES-2. Air quality and energy benefits from replacing retiring light-duty municipal fleet vehicles with EVs over next 10 years, 10 large Arizona municipalities
|Air quality and energy benefits||Total (parentheses indicate increased emissions)|
|Petroleum use (barrels)||367,888|
|Greenhouse gases (short tons)||144,464|
All 10 municipalities surveyed would save money over the lifetime of these light-duty vehicles by “going electric,” with Phoenix alone saving more than $25 million. (See Table ES-3.)
Table ES-3. Total cost of ownership savings from replacing retiring light-duty municipal fleet vehicles with EVs over next 10 years, 10 large Arizona municipalities
|City or town||Total cost of ownership savings|
- Medium- and heavy-duty vehicles – from large pickups to cargo vans to heavy equipment – will be increasingly attractive candidates for electrification as new vehicle models come on the market and costs decline. Commercial vehicle incentives under the IRA will make electrifying these vehicles even more attractive, defraying up to 30%, or $40,000 of the purchase cost of medium- and heavy-duty trucks and mobile equipment.
- The financial benefits of electrification depend on how electric vehicles are used. Electric vehicles currently in Arizona municipal fleets are driven fewer miles on average than gasoline- and diesel-powered vehicles. Municipalities seeking to reap the full benefits of electrification must carefully integrate EVs into their fleets, aligning charging and use schedules to ensure that EVs are able to replace as much gasoline- and diesel-fueled travel as possible.
Arizona cities and towns should move swiftly and boldly to take advantage of the potential for electrifying their fleets. Municipalities should:
- Make bold commitments and stick to them. Setting a goal of phasing out gasoline and diesel vehicles as electric versions of those vehicles become available can focus all departments of municipal government (including those with important roles such as facilities managers) on the task of transitioning to EVs and create economies of scale in vehicle purchasing and charging.
- Develop a municipal electrification plan. Electrifying a municipal fleet requires more than just a commitment from fleet managers or policy makers. It requires planning by every part of municipal government as well as the electric utilities serving the municipality. An electrification plan can help municipalities identify the best near-term targets for electrification and ensure that EVs and charging infrastructure are deployed in ways that are best suited to helping cities serve the needs of their communities. Cities and towns should reach out to utilities, many of which already provide technical assistance to entities electrifying their fleets, early in the process to involve them in developing and implementing the plan.
- Collaborate with other municipalities in Arizona and beyond, as well as state government, to share information and ideas, negotiate discounts for EVs and equipment, pursue opportunities for financial incentives, and advocate for additional incentives and support for fleet electrification.
- Work with utilities to accelerate deployment of electric vehicle infrastructure and implement EV-friendly rate structures. Utilities have an indispensable role in facilitating municipal vehicle electrification. Utility incentives for the installation of EV charging infrastructure (of the kind currently offered by several Arizona utilities) could significantly ease the path toward fleet electrification. The Arizona Corporation Commission, which regulates investor-owned utilities, and public power providers such as Salt River Project should ensure that utility rate structures incentivize EVs and expedite the installation of infrastructure to support municipal EV charging wherever possible.
- Take full advantage of government and utility incentives. There are multiple potential sources of grants, loans and other incentives for municipal fleet electrification. Opportunities for funding exist from federal and state governments, as well as Arizona’s electric utilities, which often offer discounts on the installation of EV charging infrastructure.
- Take full advantage of incentives in recent federal legislation. The IIJA and IRA contain numerous incentives for electric vehicles and EV infrastructure. Municipalities should work together to identify and pursue federal incentives that further reduce the cost of new vehicles and charging infrastructure, such as the commercial vehicle credit in the IRA and incentives and funding for charging infrastructure in the IIJA and IRA.
Executive Director, Arizona PIRG Education Fund
Diane directs the policy and campaign priorities for Arizona PIRG. She helped lead members of the Coalition for Transportation Choices advocating for Proposition 104 in Phoenix—one of the boldest investments in public transportation passed in the nation. Diane is the recipient of recent awards from the Phoenix Business Journal, the League of Women Voters of Arizona and the Arizona League of Conservation Voters. Diane was previously the executive director of Illinois PIRG, and an assistant organizing director with the Student PIRGs.
Associate Director and Senior Policy Analyst, Frontier Group
Tony Dutzik is associate director and senior policy analyst with Frontier Group. His research and ideas on climate, energy and transportation policy have helped shape public policy debates across the U.S., and have earned coverage in media outlets from the New York Times to National Public Radio. A former journalist, Tony lives and works in Boston.