Episode 154: The Truth about EV Costs: The Good, The Bad, and the Ugly Pt2

This is the Fleet Success Show dedicated to helping you and your fleet succeed using the experience of fleet professionals and Hall of Fame fleet legends. The show that explores how the pillars of stakeholder satisfaction, intentional culture, resource efficiency, and risk management all combine to lead your fleet to success. We're glad you're here. Now let's get into the show. Okay, so not very much M&R savings, which is, you know, was kind of sad when I saw that because I was like, oh, this is the thing. And, and I'm just going to call this one out too, because this is the first comment I know we're going to get. Yeah, but you don't have to pay for oil and you have to pay for an air filter. Yeah, but you still have to replace the cabin air filter and you still have to replace, you know, HVAC components and all that. It all exists.

And in fact, recharge that air conditioner.

And a Tesla, that fan runs all the time. All the time. I don't know if you ever walk by, but like our VP of sales, we talked about, he drives a Tesla.

You always think he left his car running and you're like, oh wait, it's a Tesla.

It's just running nonstop.

Yeah. I see the same thing happen. It scared me once overnight. We had a car in the garage and it's like, what's that noise in the garage? And it was the car cooling itself off, essentially.

You're in Arizona, like, this is something we deal with, guys. Okay, so let's look at this. 5 years overall.

Right.

Right. You have the conventionally fueled vehicle, it depreciates $4,200. Another conventionally fueled one, you know, this is the Trax, depreciates $9,200. Compare that to the EV. Right? So the Bolt EV over same 5-year period will depreciate $22,000.

That's just massive.

I mean, $22,000 versus $4,200.

Right.

Even $9,200, right? Let's be fair here. $9,280 with the Trax, which is kind of more comparable to the Bolt.

Yeah, and that's fine.

The Chevy Volt depreciates $16,000. And fuel savings, fuel, the CFVs are definitely higher. We're looking at, for the Trax, $10,000 almost.

Right?

For the Bolt, we're spending about $3,000. $7,000 right there. Yep. M&R costs, a little bit more expensive in the Trax, a little less expensive in the Bolt by about $2,000, call it. So $2,000, $7,000, that's $9,000. The delta between depreciation is $13,500. So overall, getting an EV is going to cost me about $4,000 more for the life of the vehicle.

Yeah.

Just based on that math?

Yeah, a little more than that, I think.

I guess we're almost $5,000.

Yeah.

You total all that up.

$5,000, right?

Yeah, the Chevy Trax comes out to $24,761 total capital cost. The Chevy Bolt comes out to $30,095. So almost, not quite a $5,000— I guess a little over $5,000 difference between the two.

And if you're going to be as particular about the details— and again, I'm not trying to beat up the EV, but I just want to be honest about the nature of these vehicles. The Spark is probably a better comparison, right?

It totally is. Yeah. Well, especially if you could compare it to a Spark EV.

Yeah.

And that's really an apples to apples, which is nice.

Yeah.

If you compare that— so, OK, so the Bolt is definitely the outlier here. That's $30,000.

Yeah. There's no question.

If you compare the Trax to the Bolt, that's almost dollar for dollar.

Yeah.

I think it's a fair thing.

Yeah.

I think the biggest difference, though, is the— while you're saving significantly on fuel, and you're saving some on the M&R, like, that depreciation is just killer.

Right.

Right. Like, that's— if you're doing this to save money, this isn't saving you money. You're just using an EV instead of CFE.

Correct.

The cost is almost identical.

Right.

And that's kind of like your best-case, worst-case scenario. If you compare that still to the Spark, which is a very fuel-efficient vehicle.

Right.

And on the market today, this would be equivalent— like, you could go get a Prius hybrid.

Yeah, something like that.

Right.

Or even just, you know, like a— what is it, the Yaris or the—

Yeah.

The Corolla, right? If you want to not even pull hybrid into the conversation.

Right. So you look at the Ford C-MAX and the Chevy Volt. Both of those are almost $24,000 or $25,000 compared to the Spark at $17,000. And it's the depreciation.

Right.

It's the fact that it really does hold on to its value better.

Right. And I got to call out here, because we also have taken some hits for saying that we think plug-in hybrids are actually a pretty good sort of intermediary place here. And, you know, I can't help but look at the plug-in hybrid and the hybrids. Their costs are landing very similar to the conventionally fueled trucks. And, you know, we did get a really nice jump in emissions reductions here, right?

Yeah. So, so you traded depreciation for fuel and that sounds— and the benefit is lower greenhouse gas.

Yeah. Why is that demonized?

It sounds like a win to me.

Yeah. That's the one that makes me scratch my head the most when, for some reason, some of the evangelists demonize plug-in hybrids. I don't get it.

If it's not battery EV, it's not EV. That's what I've heard. That's what I've been told. If it's not battery, it's not EV. Plug-in hybrids are terrible. They're atrocious. Da, da, da.

Yeah, and when you consider most folks won't go beyond the range of those plug-ins in their normal commute, it's like, I just don't get it. I think it's a great option, actually.

It's a good extender option.

It really is.

If you need to go a little bit further than the range, That's where the hybrid comes in.

Right.

If you're not quite ready to flip over the entire fleet to EV and install the infrastructure that comes with that, because that's a cost we haven't even talked about.

Yeah.

But if you're not quite ready to do that, then the plug-in hybrid is a great— Yeah. —intermediate.

And even if you are ready to do that, but you just want to get started right away, like one of the problems that we run into when we're advising fleets is you cannot bring in that first EV without the infrastructure to charge it. And if you do so, it's to your own peril because you're going to end up increasing the size of your fleet. So it's a whole thing. But with a plug-in hybrid, you can order that vehicle today and not worry about when the infrastructure is going to get in. I mean, obviously, you want it to get in sooner.

But you can build it. You'll be able to use it when it's built.

And you can get all the gains of the efficiencies. As a hybrid. Yeah. So again, I don't—

There's no greater transition plan, as far as you and I are concerned. Yes, it really is. Certainly much easier. OK. All right. So comparing this, you know, 15,000 miles per year, comparing the Spark versus the Spark, right? These are both LTs, CFE versus a BEV. Right. MSRP for the conventionally fueled vehicles, $15,000. The battery electrics, almost $27,000. And that's the big significant difference. Right. When that vehicle's sold, right? This is a 15,000-mile per year. So this is more consumer-grade. More consumer-grade. Yep. The conventionally fueled vehicle will keep about 22% of its value. We'll sell it for $3,300. Right. Overall capital cost, right, which is again the delta between what I acquired it for and what I disposed of it for.

Right.

Comes out to $10,600. Estimated fuel cost, $15,500. Capital and fuel cost together cost me about $26,115. Right. The battery electric only retains 14% of its value. Still retains more, right? So I can sell this for $3,900. Right. So about $600 more than I can eventually fuel the vehicle. Right. but I started at almost $27,000. Right. Which means my capital cost was almost $23,000. Right. At $22,779. Estimated 10-year fuel cost, only $6,500. So half of what the conventionally fueled vehicle was. Right. But that still makes my total capital fuel cost $29,279. Right. For a 15,000-mile per year vehicle. Right. It's costing me about $3,000 more for the life of that vehicle, 5 years. So this idea of like, you know, I'm gonna save all this money when I buy an EV, It's just not— just not accurate. It's not there. It's not like it's going to cost you an arm and a leg to do it. So if you really care about, you know, like, oh, I just want to reduce my own carbon footprint and you want to shift it from, you know, coming out of your tailpipe to come out your electric utility, by all means, this makes sense, right? Okay. But let's talk about the more likely scenario for a fleet, which is going to be 5,000 miles per year, right? Lower usage, shorter runs, that kind of thing.

Like I said, if you're hitting 6,000, 7,000 in fleet, you're doing great. Again, there are vocational fleets that maybe that it's going to look much more like that consumer use. So we put them both.

Now they will hold on to their value more. Mm-hmm. Right. But we notice that the Spark CFV retains 50% of its value. Yeah, pretty much. Whereas the battery electric only retains 30%. Right. So the capital cost alone, $6,400 versus $18,616. Right. So that's almost a $12K delta. Fuel cost, $2,100 versus $5,220. Again, the more you drive an EV, the more it makes it worth it. Correct. But fleets don't drive their cars as much. That's so— 5,000 miles means you're not capitalizing on all the savings an EV could give you, which means that your overall expenditure for, you know, 5 years— this is the same model. Yeah, just the last one was a $3K difference. Right. By driving it less, our capital cost is $20,716 for an EV, $12,745 for a battery or for a conventionally fueled. Right. So that comes out to almost identical, $8,000 delta between the two. Right. Where are you going to make up $8,000? Exactly.

And so, you know, on both of those slides, we put kind of this hypothetical where let's pretend you never had to do a PM for an EV to try to see like where are some places we could make it up, right? I mean, you know, if you're only driving, to your point, the less you drive it, the less fuel, but also the less M&R, right? So where are you making this up? It's not in PMs, even if you don't do any PMs on the EV, which again is bad practice. We're not saying that. But we wanted to kind of try to be fair here. Are we— you know, because obviously we understand that for many folks, the attitude is, well, you should never need a PM for an EV because the onboard computers will tell you when something is wrong or, you know, some thought of that nature.

Tell your lawyer you said that. Let's see what they say. Yikes.

But anyway, we're trying to be fair. We're trying to, you know, we're trying to position this in a way where we've considered the angles of reasonableness. Right. Yeah. So hopefully, folks, that's coming across here.

Yeah. So but even if you cut out your PM schedule, let's say you cut it down to like 1 per year instead of doing 2 or 3 per year. Right, right. All you're cutting out when you talk about the, you know, the actual oil and parts of the oil and air filter, maybe $100, maybe. Depending on the price of oil that day. Right. But, you know, the time that you save, maybe a couple hundred bucks in inspection cost, right, depending on your fully burdened labor rate.

Well, in this case, right, let's say you're, you're purely outsourced, so you're paying— let's say you have no deals and you're paying retail. So let's say you're paying $100 for that PM, which I think is a fair number. That's cheap, right? Which is—

if you go to the dealership like Ford, charge you $250. Oh yeah. Yeah. $300 for it.

So again, I'm trying to, you know, what did you save? You know, $1,000? Yeah. $2,500? Like, you're not making up the $8,000. Like, I don't see it. I know if you get into a crash, fine, but that's totally different. That's your insurance. We're not, just to make that clear, right? It's tough to make it up.

Show me the money. It's not there. It's not there. It's not there. Okay, let's keep going. Well, this is a busy slide, so I'm just going to apologize right now. There's a lot of data here. You can pause it here if you want to and just read all the data. Right. What we're trying to show is just the delta between the actual cost of, you know, like a class group 1320. Well, these are NAFCA class codes, I'm assuming. Yeah. Right. So looking at the auto that's compact, a sedan that's less than 8,500 GBW, typical CFV, $30,000. The EV alternative, it's only 3 of them worth $33,000.

Yeah, and some of them were going to do better. Yep. Yeah. But if you jump down to, I don't know, pick a line here.

Yeah, maybe pickup trucks. You know, you got your extended cab 3/4 ton extended cab for $35,000. It's a cheap SLT.

I mean, it's a work truck.

Right, but even then, if you get the Lightning Pro, like the base level Lightning, it's a $70,000 truck. $70,000 truck, yeah. Without the frills. Yeah. Yeah. So Chevy does the same thing. I know they're, you know, like the Chevy, whatever they're calling their Avalanche, the Evilanche, the Silverado EV. Yeah. That's totally just an Avalanche, guys.

Come on. It is. But I got to tell you, I rented one, and the thing was freaking awesome.

That's what convinced you to buy an EV?

It is. It is. That was awesome. I won't lie. It drove around like a little compact SUV, and it was this big truck.

Yeah, but just looking at, you know, Chevy Blazers, Ford Lightning Pro SSV, right? I mean, you're talking $70,000, $55,000. Police interceptor hybrid, $62,000, right? And every one of them is just a little bit more expensive or a lot more expensive. And very rarely will you see it flip the other way where it's actually more expensive to buy a CFV than it is to buy— It happens. Yeah.

But yeah, that's basically it. And what I want to call out on this slide is in this case, we were working with a fleet organization that was only interested in OEMs, which, you know, you could at least understand their position, whether or not you agree with it. You know, they're thinking, okay, if I do aftermarket stuff, who's going to service it? How do I train my folks on it?

And by OEMs, we're talking, you know, Ford, right? Gosh, GM and Stellantis. Yeah.

And again, even some Toyota maybe.

Yeah, exactly.

You know, even if you go HD, you know, Freightliner now has some out-of-the-box EVs. But, you know, for a lot of fleets who are either out of their choice or because of mandates or because of whatever it may be, that's not an option to go only OEM. And they're being told, no, it's got to be everything. And I think you mentioned it with some of the California fleets. So the fact of the matter is that in the MD space, medium duty space, and large chunks of the heavy duty space, not the entire heavy duty, is actually ahead on medium duty here. It just doesn't exist yet. Right? Right. I mean, an F-150 Lightning is great, but that's the equivalent of a half—

Well, it does exist. Is significantly more expensive.

Well, that's what it is because you're talking aftermarket certified in many cases. Yeah, but you're talking someone took a chassis and ripped it apart and made it into an EV, right? And you're seeing, I mean, dramatic differences in the cost of these assets, right? Like 4x, like, like 4x. And, you know, and even when it's not 4x, when you look at it from like a just a dollar amount, the impact on your plan is going to be huge. Like we did a study a couple of years back for a group that included transit, right? And at the time, I want to say this was 2 years ago, maybe 3 years ago, they were buying their diesel buses for just under $600,000, $580-something thousand. To get those same things as EVs was going to cost them at least $1.2 million in the range of $1.2, $1.4. So not 4x, 2x. But a dramatic, dramatic difference on what your cash flows need to be.

Right, right. You just cut your replacement budget in half, right? Like, you know, essentially, yeah, you're gonna need twice as much replacement budget to stay on top of that.

And that's if— and this is to be clear— the use case works. Because in that case, it did. They were not a 24-hour transit, so they could charge overnight, right? Imagine if you're a city that runs 24 hours, right? You're going to actually also need to increase the quantity your fleet, your spare fleet, in order to—

we're not gonna call that your spare fleet, we're going to call that not charging.

Yeah, it's your charging fleet at that point. It really is, because it's what's necessary for the logistics. And I know we're going to get the comments, well, but you could do charging en route and you could do battery swaps for some of these. And yeah, and until they invest in the infrastructure, you can do all that, but all that's going to just increase your cost somewhere else, right? So again, I just call out that it, it's actually a better story in the light-duty space right now because the OEMs, there is closer to charge cost parity there. The minute you talk about aftermarket upfitters, and I'm not trying to knock them because I think some of the work they do is frankly phenomenal, but the fact of the matter is it costs more.

But even for the OEM, like let's talk about Freightliner, even for their EV versus their non-EV, there's a significant markup for the EV. Oh, yes. Yeah, absolutely. And even if you could qualify for that tax credit, it's just not making a huge dent in that overall cost. Correct. And so this is like when we talk about eyes wide open, the number one cost is always going to be depreciation. And because of the delta in CFE prices versus EV prices, that the cost of depreciation is going to offset any kind of M&R cost savings or fuel cost savings you're going to get. That's right. You have to be aware of that and what that impact is going to look like on your CapEx versus your OpEx budgets. So—

and that doesn't mean you shouldn't do it. It just means you should know it before you do it. Before you do it. Right.

And plan for it and create a plan on how you're going to do it because you can't all of a sudden— we've seen that where, you know, there's a mandate comes in, they say, hey, we need to switch all of our— and this isn't like a statewide mandate, this is maybe just your city council or something like that. We need to switch over everything. We want to be the greenest city on earth. We're going to switch over everything to EV. Okay, this is what it's going to cost us to do it. Oh, hold on a second. Like, that's not what people said. This is supposed to be free. It was supposed to save us money, right? If you can't tell that story, you're going to look like the bad guy. You're going to look like, oh, you're just a naysayer. Yeah, you're the naysayer, right? You got to just be able to explain Hey, this is where— how much we're going to save on maintenance. This is how much we're going to save on fuel. This is what we're going to have to spend to get that right. And it's just from a CapEx standpoint. That's not even the infrastructure. We're not talking about that. That's not even, you know, if you could even get the charging stations. We're not talking about that. Right. Just the cost of the asset alone. You have to be transparent about it.

Right. And again, I hate to beat it up, but we got to also make the point that, frankly, there's just not an EV alternative for everything, especially in that medium duty and heavy duty space, right? Part of that cost driver, real quick, I wanna call out is, you know, we talk about this quite a bit when we're doing this, is that, you know, you may have an asset that you build, let's say on a 4-ton truck, maybe 5-ton truck, and it, maybe it's, let's say an aerial without riggers, right? Because of that extra weight on the EV, you can't even build it on that chassis. You got to build it on a bigger chassis. Yep. Uh, and then that adds cost in addition to the upfit, in addition to, you know, and then can your drivers drive that? And it's just a whole big thing. And so that's— and again, you don't want to be the naysayer and say we can't do it. You need to be able to prove this. And then last but not least, again, as of today, this should improve, but as of today, there's just not enough battery, lithium, whatever you want to call it, to actually meet all of the demands that are out there. So that might be a podcast for another day. But in other words, you— the manufacturers are going to struggle to deliver, uh, the, the quantity of EVs that are necessary to hit— to hit every— there's no way they're going to hit everyone's mandate, let's put it that way, right? You know, they might hit somebody's, but not everybody.

Like California, yeah, right? But if California and Illinois and New York all go the same way And there's 17 states, by the way, that have signed on to carbon ACF. Right. So as go California, so goes at least a third of the country.

And remember, there's the whole rest of the world, right? A lot of countries have put in similar kinds of mandates. And again, you know, maybe we'll get there. It's great if I'm with them. I'm excited. I know that I have demand before I have supply. That's a great position to be in. But it's not— it's not an easy lift, right?

So anyway, So, but okay, let's talk about this over time, right? So as we look at, you know, the EVs versus, you know, like we were doing this, this is actually, you know, numbers from a study we did for a county and they were looking at, you know, overall how much would they be saving on fuel, right? And cumulatively over 10 years, right? So from 2025 through the year 2034, they would save on average about $8.2 million in fuel. That's not insignificant. No. Right. So $8.2 million in cumulative fuel savings. Cumulative, not on average. Cumulative. Right. Right. So not per year. Right. Cumulatively, they would have saved over 10 years, they would have finally saved $8.2 million, which is significant. $820,000 a year on fuel. Yeah. Yeah. But then you look at, okay, so that's one graph. And I think this is the piece where we have to be really careful because you can take one graph out of context. Right. And this is why you and I always say data has context and you have to look at it in comparison to other points of data. Right. So let's move on from fuel cost. M&R cost. We've already kind of talked about this, is that there's really not as much M&R savings as you think there's going to be. Cumulatively over 10 years, we saw this fleet, they'd be projected to save $1.1 million. So they're still saving money. Let's get clear here. You are still saving money on M&R with an EV over—

You are.

That CFE, right? It's $1.1 and you just saved $8.2 on fuel.

So right now you're doing good. Almost a 10. Almost a 10. Doing all right.

CO2 emissions. Yay. Right. This is the big win. This is the big win.

This is the big win.

We have saved cumulatively in 10 years 53.6 million pounds of CO2. That's a lot. That's a lot. Right. Of tailpipe CO2. Tailpipe CO2. Let's be clear. We're not even measuring upstream. We didn't—

this fleet wasn't interested in it, so we didn't do the work. Right.

We can clearly show that you're going to reduce tailpipe emissions.

This way, there's no question about it.

Better air quality to breathe. Yes, this will have an impact. Yes.

And if we could honestly, if we could come up with some good sort of thinking and design around where we put our electricity production, right? I mean, if we can put them, drop them in the middle of a jungle, for example, this would be a complete win, right? Because the trees would love it. It would be a great place. It would actually reduce the amount of carbon that actually escapes into the atmosphere. It would be a tremendous win. Right. So, so there's some value, there's some value to moving the carbon somewhere else. I want to be clear on that. It's not—

and I think that's one of the solutions that not a lot of people talk about. You know, I look at California and I scratch my head because I know nuclear has gotten this just totally bad rap, which is not— yeah, you know, like you look at it and we've had what, Chernobyl, Fukushima, pretty major— it's right, 3 major incidents. Several of them were either faulty design, totally gross human incompetence.

Right.

Which, by the way, if you've never watched the show on HBO, Chernobyl. Yeah, I highly recommend that show. It's fascinating. And you just— you really learn how cool nuclear is, right? But also how stupid, you know, the design can be sometimes. Right. All to save a couple of bucks here and there. But you think about, you know, California shutting down all their nuclear plants. Yeah. And you saw this— I just don't comprehend especially with their push to EV. Yeah, nuclear, it's the cleanest form of electricity today, sans renewable. But renewable is not as reliable.

Correct.

Right. Nuclear is steady, reliable, and clean and not available everywhere. And not available everywhere. Right. Right. But if we were to— okay, well, I don't want to have a nuclear disaster in my community. Right. There's, you know, I know you drive by— if you go from Carlsbad down to San Diego, there's a nuclear power plant that's right there on the shore. And I get it. But you move that inland, significantly inland, and we've got, you know, here in Arizona, people say, oh, well, you can't move it out into the desert, it's too hot. We have Palo Verde, literally 50 miles from Phoenix. Yeah, it is hot. Yeah. And it works great. Great. Yeah. Yeah. And we obviously, we compare— we also supplement with no dams, right? What do we call that? Hydrogen? Yep. It's not hydrogen, though. It's hydro. Hydro dams. Yep. We have— yeah, there are still some coal-powered. They're getting rid of those. Yeah. And there's still some natural gas, but most of it is, you know, it's going to be hydro or it's going to be nuclear. Nuclear. Yeah. And I think, you know, that's kind of the model that a lot of other places should be is how can we move this further away from our cities? And if we are going to be coal or natural gas or whatever, because we don't want to, you know, have a radioactive whatever, how do we get that further away from the city? Right. And then you just run the lines. Yeah, right. And then it's not as impactful to the environment or to at least, you know, where the people are living.

Yeah. And again, to be balanced, you know, when I first started looking at this, I just said, like you said, you're shifting it and we are reducing it. But if you're shifting it, it's kind of a lie. And I don't know if it's a lie, but I—

there's some fascinating study though. Yeah. To find out like per kilowatt hour, you know, for per pound of CO2 emission eliminated.

We could do it. We've done it for some fleets and maybe we'll show that another time.

All right.

But there is downstream emissions, there is no question. But I want to acknowledge it's better to have the— in most cases, in most cases, it's better to have those admit where they are. But again, it's not a— you're not eliminating emissions. That's simply not true. That's just not true.

Of course, then if you run power lines, you're going to kill some animals and birds and stuff on the way in because you got to bulldoze some trees. Yeah, this isn't a win-win. Like, we just can't please everybody.

Google what's happening in Cape Cod and over the last 5 or 10 years and it'll kind of make you laugh with the wind stuff.

And well, that's true too. Like, you know, wind is killing the birds.

Wind's killing the birds.

We can't win.

The hydro, the sea hydro is killing the fish. And, you know, so anyway.

Well, at least nuclear, you know, assuming it doesn't melt down, we just pile that crap in Yucca. Yeah. Right. That just gets buried in Yucca Mountain and it'll just stay there for the rest of its life.

It turns out there's a really great solution with saltwater and things like that. Oh yeah. You know, so and again, to your point, this is not an episode on nuclear energy. Maybe we'll do that one day. But if we're being honest, nuclear power plants kind of have that beta VHS thing going on where there's a better, smarter model that just for whatever reason didn't make it. Because to your point, it was public perception.

Yeah, right. There was nobody want to invest in it. Nobody wants to spend money on a project that the public doesn't want. Right. There's still value in it. Right. Bill Gates is huge into this. Yeah. You know, I'll be honest, I think when nuclear fusion comes out, yeah, it's going to be a game changer. Yeah. You know, free unlimited energy and it won't be free because you got to build the plant, but that it doesn't— it's just a game changer. They're completely different. Yeah. You know, from a, from a nuclear fission reactor.

Yep.

And that will be the thing I think that truly enables mass EV adoption. Right. You know, that will solve a lot of the infrastructure ails, you know, what ails us there.

Right. And let me just say this too, because we're going to get hit in the comments by some of the evangelists. What about all the other gas greenhouse gases? And you didn't show that. Yes, we didn't show that. They exist and we could show that. We didn't because it's a podcast and we only have time for so much. And the big talk is always carbon. Carbon's the number one killer and the bad one. You can show those. And I think that that's a fair point, right? The bottom line is. There is no question that you've reduced tailpipe emissions a lot. And, and you need to decide, is, is what I reduced worth £55.6 million?

Is it worth the cumulative cost? And we're going to show you the cumulative cost, just how different it is for this case. Yep. Because that's really what we're talking about here.

Right.

You know, it could be worth the cost to you, but make it worth the cost to you. That's it. Don't do it because you're going to save money or because, you know, it's cheaper or it's better or whatever. Like, do it because You know, you know exactly what the cost is going to be and how much you're actually going to save. And don't give me some BS about, oh, this is zero emissions. It's not. Right. Be really clear about what that delta is. Exactly. And make that decision. Yep. You know, like, well, it's not $53.6 million now. It's actually, you know, $20.6 million. Yeah. Is it worth it still given that, you know, we could have done this a different way? And I think that's when you and I get hung up on EV mandates and stuff like that. Yes. There are options today that are not EV that could have the same impact for $20.6 million. Yeah.

Somewhere along the line, the mandates changed from reducing greenhouse gases to adding— it's all about EV fleet count. Yeah, that's very troubling to me, right? Because I'm actually, you know, you can Google me, you can go check. I mean, you know, I was one of the first people around to introduce biodiesel in New York City as far as using it for a transportation fleet. I would love, you know, I jumped in on hybrids right away. I was an early adopter for all that. I'm, you know, I've been accused of being a greenie. So I'm all for, you know, trying to improve the environment and make sure we take care of our Earth. I think we are obligated to that. But why, if all of a sudden the mandates don't care about that, right? It's about, well, we just want to make sure all of our vehicles and our fleet are EV. Something's off there.

Oh, great. Now here comes Mark.

I'm going to die. You're going to get in trouble. Here we go. All right. All right. Let's move on because I'm—

Show me the money.

Speaking of money. All right. I got too honest there. Sorry.

So we talk about the, the EV versus modified capital cost. Yeah. Right. So this is a replacement plan we did for this fleet. Yep. And over the 10 years, if they wanted to switch to EVs, they were going to need to come up with an additional $18.5 million in their CapEx budget.

Just for their assets. So when I'm just to replace the asset, right.

Not the infrastructure, not the infrastructure, not anything else, not the charging stations, just asset. Just the asset. Okay. Yep. So 18.5, you know, essentially they'd have to spend $7.5 million per year instead of $5.7, almost $2 million more per year just to switch to EV. Correct. And that's just the capital. That's the difference in acquisition cost versus depreciation.

Right. And let me just call this out real quickly. One of the reasons we do this with fleets is because what we find is they're not spending— and we've talked recently about replacement— they're not spending what they should be spending simply to replace their assets. So this jump is actually bigger. So yes, it's about $2 million difference if for the conventionally fueled vehicle, right?

If they were on track for their current replacement plan.

Correct. This fleet, we don't have it here, but this fleet had been spending historically $1.8 million. Okay. So the jump from $1.8 to $7.5 is massive for this community. Massive.

You know, and the taxpayer is going to fund this because all the taxpayers— this is a government fleet. This is a government fleet.

This is a— this is a county in Northeast.

And that's the thing we just want to be clear on, is that, hey, you can do it, but is it worth the squeeze? Right? Just taxpayers, or do they know that this is what they're signing up for? Correct. And does the city council know this is what they're signing up for? And what are they saying no to? What aren't they spending? Well, that's a big point to spend money on this.

Correct. That's a key. Is it—

is it education? Probably the money, right?

But it's got to come from somewhere. It's got to come from somewhere. Is it purely just a tax increase or whatever it may be? It's coming from somewhere, right?

Okay. So overall cumulative savings, let's, let's compare, right? Let's put us all in one picture. Yep. We're comparing the capital cost outlay, the M&R savings, right? Combining the two. If you look at this, you know, I'm just going to focus here on this last little piece here, $18.5 from a CapEx standpoint over 10 years, and you're going to save $8.2 1.1, right? So you're going to save 9, but you're going to spend 18 overall. You're not going to save the money you think you're going to save. It's going to cost you $9 million over the course of 10 years. In this case, in this fleet, this is what they came up with, right?

And this, this was about a 1,500-asset fleet. It was a government fleet. And like we said, uh, with that— East, right? Back to near DC, not far from DC. Uh, and it's an OEM You know, again, they're focused only on OEM, right? So this is only the assets they can replace with EVs because there's an OEM option that's—

that's light duty and all that. They weren't looking at remarketing if it was, you know, a heavy duty vehicle and it didn't have an OEM, you know, EV option. They didn't even consider it.

It went out the window. Correct.

So this could have gone up.

Oh, this would have been dramatically higher.

Yes. Okay. Yes. So I guess bottom line here, Mark, right? This is kind of the end of our slideshow, but The bottom line is, you know, we want you to consider EVs. We want you to look at it. We just want you to look at it eyes wide open. That's it. You know, do the research, do the homework, you know, start getting the plans in place to get chargers in your fleet. You know, work with your utility companies, get it going because it's not going anywhere. Right. It's just going to— it's going to keep coming.

You just got to figure it out.

Yeah, we're going to have to figure it out. And, you know, as my good buddy Chris Schaefer always says, right, when he's not telling me that I don't know my butt from a hole in the ground, he's often telling me is that, hey, we shouldn't let perfect be the enemy of good. And that's true. And a little bit of progress is better than nothing. And this is true, right? Right. So, but you just have to make sure that is this the best use of taxpayer funds? Is this the best use of corporate finances? Right. Is there a better way? You know, if net-net we could save, you know, 20 million pounds of CO2, is this the most efficient way to get there or is there a different way to get there? And that's what we're really just challenging you as listeners to think about is, is this the best way to get there is doing a full EV swap? Or should we look at plug-in hybrids? Do we look at just upgrading our fleet? Renewing the fleet. We talk about replacement all the time. Absolutely. It's one of the best ways to improve your fuel economy, improve safety, and all of that just by staying up to date on your replacement plan, let alone swapping it all out for EVs or newer hybrids. Yeah.

And, you know, again, like I mentioned biodiesel, people are going to comment, well, biodiesel has its issues. Yes, it does. Absolutely. None of this is a fix-all for everything. And that's the point. You know, we've, we've had fleets, some several great fleets in California, for example, that have had tremendous success with natural gas and have reduced emissions dramatically in things like their sanitation and transit. And I don't think there's a— I think if we really were caring about carbon emissions, probably the answer is we need a little bit of everything right now. And, you know, and unfortunately, that seems to be going by the wayside for whatever reasons.

That's the— it's the tribal identity politics. That's the one thing that I think if we could just think critically, yeah, we would be looking at all options, right? You know, how do we really get this done? And then, you know, as we go forward, let's say that we could switch out with whatever is available today. And then as we replace those vehicles and their 3 to 5 year life cycles or 7 years, You know, as the technology adapts and all that, you know, we take another step forward and another step forward. Right. We don't have to bite the entire thing off at once. You know, we got to eat this elephant. That doesn't mean that we got to, you know, swallow the whole thing in one year. Yeah. And NYU, they're saying, well, it's 2030, that's still 6 years away. Yeah. Let's see. Still, when you talk about the challenges that we're facing, these are not 6-year challenges. No, they're not. You know, these are 10, 20-year challenges. Right. And hopefully I think this is the other thing is hopefully it makes a difference. Right. Oh, you know, depending on who you listen to, it might be already too far gone, or we might do everything we can to just stop emitting gas. But if we can't get the rest of the world on, right, what did we solve the problem? What difference did it make?

And if carbon is really the killer and other greenhouse gases are the killer, they are. I mean, what are we doing about taking it out of the environment, right? Like stopping creating new doesn't change what's there, right? So I think there's a lot more to this. Obviously, it's a big picture. We don't pretend to have all the answers. Nope. But what I will say definitively, and, you know, people can beat me up on this, EVs are going to cost you more. They're going to cost you more, right? Especially in a fleet setting that way, right? And that's okay. And I do think, you know, again, the facts are the facts. They're going to reduce tailpipe emissions. They're going to overall reduce emissions, less so than purely tailpipe. But they're going to cost you more. And so anybody who's out there saying, no, no, no, no, they're not. I just think you're not I think you're hurting the problem. You may think that you're helping because you're helping to convince folks that they should do it. I don't actually think you're helping. I think you're hurting because then folks end up having shock when they realize all that's kind of actually going into this piece, right? So I think the best way to solve problems is to do it honestly and with your eyes wide open and transparency. And that's what we're going for. And like I said, I love my IKEA. I love my EV9. I would suggest everyone goes out and gets one if you can. It's the awesome thing to drive. I love being in my dad vehicle and beating Camaros.

Go get a Tesla. Go anywhere you want. We're totally, definitely pro-EV. Yeah. Just pro-EV with eyes wide open. With eyes wide open. Yeah. All right. Yeah. That's going to wrap it for us. This was a long one today. Sorry, guys. We had slides. Yeah. And that automatically meant we're going to talk longer. Yeah. But by all means, if you have any questions, we'd love to hear your comments. podcast@rtfleet.com. You can obviously comment on the YouTube video. You know, love to hear more from you about this very contentious topic. Right. And hopefully you can think critically about your own position and why you have the position you do, whether it's pro, anti, pragmatic like us, you know, whatever. You know, think critically about your stances on things and the world will be a better place when you do that.

So if you want more on it too, we want to hear about that with tons more topics. What use cases seem to make sense so far? What use cases don't? We can, we can really continue to dig into this. Or if you hate us and you never want us to talk about EVs again, you can let us know. We probably won't listen to you, but you know, hey, I would just tell you unsubscribe.

We'll still be here producing content for the rest of our days. All right, y'all enjoy the rest of your day and thanks for listening.

Thanks folks. Take care.

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