Technological advancements and incentives from the Inflation Reduction Act (IRA) have made electric vehicle (EV) adoption more economically viable for fleet operators in both private and public sectors. A new RMI analysis reveals that light- and medium-duty EVs now offer a 9% lower total cost of ownership (TCO) compared to gas-powered vehicles. This shift is supported by declining EV costs and substantial federal incentives, which reduce upfront expenses for vehicles and charging infrastructure. These savings present an opportunity for businesses and governments to reduce costs and emissions by transitioning their fleets to electric.
RMI’s analysis, conducted using the Dashboard for Rapid Vehicle Electrification (DRVE) tool, highlights cost savings across various fleet use cases, including security, patrol, and delivery services. The study shows that EVs consistently offer cost advantages, especially in areas with high fuel prices. EVs frequently match or outperform the cost of traditional vehicles, even when factoring in the expense of installing Level 2 depot charging infrastructure. Additionally, many states offer extra subsidies that stack with federal incentives, further lowering the TCO for EVs.
Electrifying fleets significantly reduces environmental impacts. EVs produce no tailpipe emissions and cut climate pollution by over 75% when considering upstream electricity emissions. They also reduce nitrogen oxide (NOx) emissions by 90% and particulate matter (PM 2.5) by 50%. These benefits make EV adoption a compelling strategy for improving air quality and combating climate change, particularly for state and local governments aiming to lead by example.
Fleet operators can leverage various IRA tax credits to offset costs. The 45W Tax Credit for Commercial Clean Vehicles and the 30C Alternative Fuel Vehicle Refueling Property Credit provide financial incentives for purchasing EVs and installing charging infrastructure. State and local incentives can further reduce the cost of fleet electrification. Governments can also accelerate the transition by adopting regulations like Advanced Clean Cars II and Advanced Clean Trucks, which encourage automakers to increase EV availability and affordability.
Ultimately, fleet electrification aligns economic and environmental goals. Governments and businesses that transition their fleets to EVs can lower operating costs, reduce emissions, and improve community air quality. As more states prioritize fleet electrification in their climate action plans, the cumulative impact could result in significant pollution reductions, highlighting the importance of sustained leadership and public-private collaboration in advancing a clean energy future.
