Electrifying Federal, Postal Vehicles Estimated to Save Billions

August 18, 2021

Making the federal fleet and postal service vehicles electric would save the federal government billions of dollars, a new report found.

U.S. Postal Service electrification could save as much as $4.3 billion, while electrifying other federal vehicles could yield as much as $1.18 billion in lifetime savings, according to the analysis from Atlas Public Policy released Wednesday. Those savings would come on top of electrification’s environmental benefits of reduced emissions.

“The time to electrify the federal fleet is now,” Nick Nigro, founder at Atlas Public Policy, said at an event on the report hosted by the Electrification Coalition. “That is clear from the numbers.”

Democratic lawmakers are seeking money for federal fleet and USPS electrification to be part of the $3.5 trillion tax and spending package they are pushing through Congress through the reconciliation process. The budget resolution framework (S. Con. Res. 14) advanced in the Senate last week included a pot of funding that would go toward various green and cyber initiatives, including electrifying the federal vehicle fleet and USPS vehicles.

“We know we have to change,” Rep. Marcy Kaptur (D-Ohio), co-chair of the House Auto Caucus, said at the event. “It’s time for the postal service to be the lead agency to electrify its fleet.”

The report found that by 2025, about 40% of the non-postal service federal fleet, and 97% of USPS vehicles, could be replaced with electric vehicles at a lower cost to own and operate than gas and diesel vehicles. The report comes as USPS faces congressional pushback for issuing a recent contract that wouldn’t fully electrify its fleet.

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‘Strong Case’ for USPS

President Joe Biden pledged in January to replace the U.S. government fleet with electric models. The White House has also escalated its push to get automakers on board with the broader effort, calling for 50% of car sales to be emissions-free by 2030.

USPS, an independent agency, controls the biggest vehicle fleet of any agency and “offers a uniquely strong case for vehicle electrification,” Wednesday’s report said. It would be less expensive to use an electric vehicle compared with a conventional one for more than 99% of USPS’s light vehicles by 2025, the analysis found. The postal service would save about $2.9 billion were it to electrify that whole fleet by 2025, and roughly $4.6 billion by 2030.

However, the U.S. Postal Service in February awarded Oshkosh Corp. a 10-year contract over competitor Workhorse Group Inc. to manufacture as many as 165,000 vehicles, with USPS saying that about 10% of the vehicles would be electric. Democrats have criticized the contract for not including more electric vehicles, and a lawsuit is pending from Workhorse.

Kaptur called the report a “compelling analysis,” and said she is part of a group of lawmakers demanding answers on why USPS awarded the contract to Oshkosh over Workhorse.

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Congressional Support

Rep. Jared Huffman (D-Calif) said he expects broad congressional support for including funding for electrification of the postal fleet in the $3.5 trillion reconciliation package. Huffman introduced a bill (H.R.1636) in March to provide $6 billion to electrify the postal fleet.

“The Biden administration wants to do it; I know my colleagues in the House want to do it,” he said in an interview. “I am definitely hopeful that we’ll be able to put the legislative piece together.”

Some Republicans have questioned whether full electrification is possible outside more urban areas. Sen. Jerry Moran (R-Kan.) said at a July subcommittee hearing that rural mail carriers in his state are worried electric fleets without four-wheel drive won’t be able to handle routes during bad weather, or have enough charging stations or dealerships for maintenance. He also highlighted “the opportunity to use natural gas and renewable natural gas, not solely electricity.”

The postal service’s inspector general is currently auditingthe agency’s plan to transition to electric vehicles, with the project expected to be published in 2022.

To contact the reporter on this story: Lillianna Byington in Washington at lbyington@bloombergindustry.com

To contact the editors responsible for this story: Sarah Babbage at sbabbage@bgov.com; Anna Yukhananov at ayukhananov@bloombergindustry.com; Robin Meszoly at rmeszoly@bgov.com

By:  Lillianna Byington
Source: Bloomberg Governmnet