Leader Actions: Public Fleet Deployment
Leaders are at the forefront of AFV deployment. Many of the Leader actions can be considered goals for AFV deployment by Learners or Actors. Moreover, transitioning to a Leader can take many different paths and involve many different actions; it is possible to be a Leader in one action Category (e.g., infrastructure deployment) but still be an Actor or Learner in other action Categories (e.g., public fleets).
From the perspective of the public value triangle, the Leader creates public value by implementing actions that aim to maximize the long-term net public benefits of AFVs. The Leader builds legitimacy and support by being a central and trusted resource for AFV deployment in the state to consumers and other AFV stakeholders. In addition, as a Leader, the public is supportive of the DOT’s deployment efforts. The Leader can increase its internal capabilities by working on making all DOT divisions incorporate AFVs more broadly into operations. The Leader can also create a consistent, long-term policy for incorporating AFVs into the transportation system, including system finance.
Conduct and publish total cost of ownership calculations for AFVs
Public and private fleet managers will have to conduct a total cost of ownership (TCO) analysis before AFVs can be considered for purchasing. Publicizing the methodology and assumptions behind calculating the TCO is useful for anyone interested in purchasing an AFV.
- Start with national TCO calculators. The U.S. DOE has a TCO calculator for AFVs that calculates local grid intensity and prices, but does not necessarily include time-variant electricity rates or local driving characteristics. The calculator also describes its methodology for calculating TCO.
- Determine the values of the relevant variables for a TCO calculation. Consider including factors such as the following, many of which are already included in the DOE calculator: Vehicle miles traveled, including daily travel patterns, fuel prices with respect to time and location
- gasoline costs, cost of installing infrastructure if necessary, cost of AFV and gasoline vehicles, maintenance costs, resale value, insurance costs, assumed discount rate, and presence of incentives.
- Find other means for lowering the cost of purchasing AFVs.
- Consider including societal benefits in the TCO calculation. Total cost of ownership calculations from a public fleet manager could include the societal benefits of switching to AFVs from conventional vehicles, including air quality improvements and GHG emissions reductions. Including the societal benefits of alternative fuel vehicles may make them more competitive with conventional and hybrid vehicles.
- Publish calculations on public-facing website and provide documentation and methodology behind the calculator. Explain why results may be different from other calculators. These calculations may help inform other public fleet managers.
- Use online TCO calculations as an opportunity to educate consumers about different regional fuel/electricity rates.
The DOT can help justify AFV fleet purchases with cost analyses. Calculation methodologies can also be published online so consumers and other public fleet managers can use them.
Survey and educate agency staff on AFVs
A high level of staff interest in alternative fuel vehicles can help make the case for alternative fuel fleet vehicles to the fleet manager and DOT leadership.
- Draft a survey to send to all staff, with questions on alternative fuel vehicle knowledge, attitudes, and current driving habits.
- Consider holding focus groups and discussions afterwards to better understand survey responses.
- Be clear that the survey is for informational purposes only. Staff may be against alternative fuel vehicles and the DOT must be careful to avoid unfair characterizations as advocates for alternative fuel vehicles.
- Hold a DOT-wide webinar or presentation on alternative fuel vehicle use during lunchtime. Respond to the needs from the survey by, for example, addressing electric vehicle range anxiety concerns by installing free charging stations at DOT offices.
Surveying and educating staff about AFVs leads to a better case for public fleet AFVs. It also allows for an internal “pilot testing” for AFV messaging and education of the broader public. Finally, surveying and educating staff encourages staff purchase of AFVs for personal use.
Deploy fleet vehicles
Fleet vehicles can drive early growth of AFVs and familiarizes DOT staff with AFVs.
- Check the completion of prerequisite actions: Identify funding sources for supporting AFV deployment; conduct and publish total cost of ownership calculations for AFVs; and survey and educate agency staff on AFVs.
- Find the appropriate use for public fleet AFVs.
- Check if bulk purchasing discounts exist. Some states have joint/bulk purchasing and procurement programs for state agencies, local governments, and DOTs should check whether AFV bulk purchase discounts are available.
- Lower capital costs by exploring lease agreements. The separation of operating and capital budgets within DOT budgets makes it difficult to offset higher capital costs with lower operating costs because operations and capital are kept separate. Special vehicle leasing programs can overcome capital budget constraints and risks associated with battery longevity. With respect to the type of leases available, a capital lease involves a transfer of ownership at the end of the contract whereas an operating lease does not. Financial officers sometimes prefer off-balance sheet financing to keep debt-to-equity ratios lower. However, new rules were implemented in 2013 by the U.S. Financial Accounting Standards Board to consider many operating leases as on-balance sheet financing.
- Find a way to take advantage of existing AFV tax credits. The government as well as non-profits cannot take advantage of the existing AFV tax credit because these entities do not pay taxes. However, the Internal Revenue Service (IRS) says an auto dealership may claim the electric vehicle tax credit, for example, as long as it discloses to the tax-exempt entity purchasing the vehicle that it will be claiming the credit. With this disclosure, the DOT can negotiate a lower price. However, a dealership must have a high enough tax liability (i.e., sufficient profits) in order to claim the tax credit.
- Educate staff on how to use and drive AFVs after the fleet vehicles are purchased by holding a demonstration day. Staff may be wary of driving a car that uses an unfamiliar technology.
- Educating staff can alleviate concerns about unfamiliar technology.
- Use public fleet vehicles as an opportunity for education and awareness. For example, the DOT can clearly label the vehicles as alternative fuel vehicles so people gain awareness as the vehicles travel around the area.
The DOT uses its experience with fleet vehicles to guide future deployment efforts – for example, by going through the AFV procurement process, the DOT can advise other fleet operators interested in alternative fuel vehicles, especially those working for tax-exempt entities. Moreover, it can give DOT staff experience with driving AFVs. The DOT should continue to look for innovative, cost-effective ways of purchasing AFVs while staying up-to-date with the latest AFV technologies.
Use public fleet to hold demonstration days and events for the public
Getting consumers to drive or interact with an alternative fuel vehicle increases AFV awareness and is the best way to convey the unique driving experience that AFVs offer.
- Determine the legal processes and procedures for holding a demonstration event for the public with fleet vehicles.
- Ensure that the purpose of the fleet demonstration is for education as opposed to selling vehicles.
- Consider allowing automakers or dealerships to bring their own demonstration vehicles to reduce perception that the DOT is an AFV advocate. When other entities bring demonstrating fleets, the DOT could take on a supportive role explaining how the agency uses the vehicles.
- Use larger events such as the opening of a new charging station to showcase the demonstration fleet. Demonstration events can also bring in VIPs to drive alternative fuel vehicles.
- Clearly label the public fleet AFVs as alternative fuel vehicles so consumers can see them as they are driven around the area.
DOTs gain valuable expertise on how to stage demonstration events for alternative fuel vehicles and new transportation technologies, thus branding itself as an innovative agency. Consumers can also go to the DOT for a reliable and balanced view on AFVs.