A United States Postal Service watchdog has reported that, though a move to electric delivery vehicles would come at a higher initial cost than purchasing gas-powered trucks, the new vehicles would largely be capable of meeting USPS needs, would be far more sustainable than existing vehicles, and may eventually save money for the service.
Last year, the United States Postal Service agreed to build between 50,000 and 165,000 new Next Generation Delivery Vehicles (NGDV) mail trucks, with the plan to replace more than 140,000 existing delivery trucks, many of which have been on the road for more than 20 years, over the next decade.
On March 17, USPS’s Office of the Inspector General reported in a policy paper that the electric trucks could save the Postal Service money “in the long term” — but under most OIG projections, it will take the better part of 20 years for USPS to see cost savings favorable to gas vehicles.
If the use of the current-gen vehicles is any indication, next-generation vehicles may well meet that target.
The Postal Service began buying the current Grumman Long Life Vehicle (LLV) trucks in 1987, with the last of the about 146,000 trucks purchased in 1994. The trucks were originally rated to be on the road for 24 years.
Their lifespan has been a question before the OIG for well more than dozen years now — in June 2010, it published a report entitled “Too Costly to Keep On Truckin?” In a summary, OIG said that it cost about $524 million to fix LLVs in 2009, and that it would save the service $342 million to just buy new trucks, rather than trying to repair the aging fleet.
The big problem with the next-gen electric vehicle fleet, OIG found, isn’t the vehicles themselves: They tend to be cheaper to maintain and operate than their predecessors.
“Electric vehicles are generally more mechanically reliable than gas-powered vehicles and would require less maintenance,” the report reads. “Energy costs will be lower for electric vehicles, as using electricity to power an electric vehicle is cheaper than using gasoline.”
The issue is in the initial costs: Upfront cost of buying new electric vehicles “is significantly higher” than those of gas-powered vehicles, the report says, and a significant investment must go into installing electrical infrastructure and vehicle chargers.
As a long-term strategy, the move is projected as a cost-saver — but only after more than a dozen years of use, and only under specific circumstances. OIG’s baseline model shows no break-even point — where costs of gas vehicles and EVs would be equal — over a 20 year period. The cost of an EV is projected to be 11% higher than cost of a gas-powered vehicle under that model.
“Our model demonstrates that the total cost of deploying an electric vehicle instead of a gas vehicle over 20 years is closely tied to the length of a delivery route,” said the report. “The longer the route, the more money saved. If the route is long enough, the cost savings will make up for the higher upfront costs of acquiring an electric vehicle and related charging infrastructure.”
An OIG projection expects that electric vehicles would lead to 8.4% lower costs than projected gas vehicles, over 20 years, if use was targeted for longer routes over 40 miles. But a break-even point wouldn’t come until year 17 of the fleet changeover.
That break-even point drifts closer when factoring the potential effects of Congressional subsidies, which OIG says the post office is pursuing.
In February 2021, USPS awarded an initial $482 million contract with Oshkosh Defense, for the assembly of 50,000 to 165,000 Next Generation Delivery Vehicles, with the ability to order more, over 10 years.
Last week, House Democrats submitted a letter to Postmaster General Louis DeJoy, urging the postal service to make a larger commitment to EVs.
“The Postal Service failed to abide properly by National Environmental Policy Act (NEPA) requirements,” the lawmakers wrote. “Instead, it moved forward with an almost-exclusively fossil fuel powered fleet procurement, which flies in the face of the commitments the United States has made to address the climate crisis and counters the long-term economic interests of your own agency.”
“We urge you to reverse this procurement decision and accept immediately the recommendations made by the Environmental Protection Agency (EPA) and Council on Environmental Quality (CEQ) to address the issues with the Postal Service’s vehicle procurement plan,” they continued, adding: “The Postal Service is putting itself in economic risk and at a significant competitive disadvantage by spending its money on the technology of the past rather than investing in the technology of the future.”
Postmaster General Louis DeJoy defended the plan last month, saying that the 10% EV production is the best the Postal Service can do, given the agency’s “dire financial condition.”
“Our commitment to an electric fleet remains ambitious given the pressing vehicle and safety needs of our aging fleet as well as our dire financial condition,” DeJoy wrote in a statement. “The proposed action, which we are evaluating under the National Environmental Policy Act (NEPA), includes an initial order plan for 5,000 electric vehicles, and the flexibility to increase the number of electric vehicles introduced should additional funding become available.”
“Absent such funding, we must make fiscally responsible decisions that result in the needed introduction of safer and environmentally cleaner vehicles for the men and women who deliver America’s mail,” DeJoy added.
