Cost-Benefit Analysis for Phase One Fleet Electrification Scenario 1: Projected Fuel Costs
The cost-benefit analysis compares the cost of transitioning the internal combustion engine (ICE) vehicles supported by the Phase 1 charging infrastructure project to electric vehicles (EVs) against a “do-nothing” scenario in which the City continues to operate and replace these vehicles with comparable gasoline- and diesel-powered vehicles.
Key Results
• The Phase 1 charging infrastructure project is intended to support charging for 118 City owned vehicles including light, medium, and heavy duty vehicles • Over the 10-year analysis period, the EV scenario has an estimated total cost of approximately $31.5 million, compared with $34.1 million for the ICE scenario. • This results in approximately $2.8 million in net savings, or about a 8% reduction in total lifecycle costs.
• These savings are achieved despite the substantially higher upfront cost of purchasing EVs and installing the necessary charging infrastructure. • The primary drivers of the savings are:
o Approximately $9.3 million in fuel savings over 10 years, a 60% reduction compared with gasoline and diesel.
o Approximately $1.7 million in maintenance savings, a 37% reduction. o Approximately $3.95 million in HVIP and SCE incentives, LCFS credit revenues, and recent funding from South Coast AQMD (MSRC) that further reduce the cost of electrification.
Table 1. 10-Year Cost Comparison – ICE vs. EV Scenario
Cost Element ICE Scenario EV Scenario Change with EV Adoption Vehicle Cost $14,245,632 $20,971,452 +$6,725,820
Fuel / Electricity Cost $15,485,349 $6,184,750 -$9,300,599 Maintenance Cost $4,649,235 $2,923,059 -$1,726,176
EVSE Capital $1,779,518.12 +$1,779,518
Engineering & Construction $3,643,536.56 +$3,643,537
HVIP Incentive ($1,110,000) -$1,110,000
SCE Rebate – Make Ready ($890,155) -$890,155
SCE Rebate – Transit Chargers ($235,000) -$235,000
LCFS Credit ($1,462,941) -$1,462,941
MSRC Funding ($250,000) -$250,000
Total 10-Year Cost $34,380,215 $31,554,219 -$2,825,997
Note: A positive value in the “Change with EV Adoption” column represents an additional cost associated with electrification, while a negative value represents a cost reduction, incentive, or revenue.
What Drives the Cost Difference?
• Higher vehicle acquisition cost: Purchasing the EVs costs approximately $6.7 million more than purchasing comparable ICE vehicles.
• Charging infrastructure investment: The EV scenario requires an additional $5.4 million for EVSE equipment, engineering, and construction.
• Fuel savings: These additional capital costs are substantially offset by approximately $9.3 million in fuel savings. Electricity costs are approximately $6.2 million over 10 years compared with $15.5 million for gasoline and diesel.
• Maintenance savings: EV adoption reduces estimated maintenance expenditures by another $1.7 million over 10 years.
• Incentives and LCFS revenues: HVIP, SCE rebates, funding from South Coast AQMD MSRC and LCFS credits provide approximately $3.95 million in additional cost offsets. • Net result: After accounting for all costs and benefits, the EV scenario is approximately $2.8 million less expensive over 10 years than continuing with ICE vehicles. -$3.95
$14.2
$21.0
$15
$6
$5
$3
$1.78
$3.64
($10)
($5)
$0
$5
$10
$15
$20
$25
$30
$35
$40
Internal Combustion
Engine Electric Vehicles
Millions
Engineering & Construction
EVSE Capital
Maintenance Cost
Fuel Cost
Vehicle Cost
Incentives
Total of $31.6M (after incentives)
Total of $34.4M
SCE rebates: $1.1M
HVIP: $1.1M
LCFS:$1.5M
MSRC: $250k
Key Assumptions
• The analysis assumes a 10-year useful life and that the City replaces the vehicles at the end of this period. This is a conservative assumption; using a 15-year useful life results in substantially greater savings from electrification because fuel and maintenance savings continue for an additional five years.
• Energy prices are based on recent/current costs of $6.00/gallon for gasoline, $7.20/gallon for diesel, and approximately $0.25/kWh for electricity under applicable SCE rates (TOUEV-9). • Vehicle acquisition costs incorporate recent manufacturer/vendor quotes, including current pricing for trolleys and other medium- and heavy-duty vehicles. • Charging infrastructure costs use actual PowerFlex project costs for the City Hall and Corporation Yard installations rather than generalized charging infrastructure assumptions.
• The analysis incorporates currently available HVIP incentives, SCE make-ready and transit charger rebates, funding approved by South Coast AQMD MSRC program and LCFS credit revenues.
• The City was awarded $250,000 through the MSRC Zero-Emission Transit Bus Incentive Program to support the purchase of two Class 4–6 electric trolleys and associated charging infrastructure.
• The award includes $100,000 per electric trolley ($200,000 total) and $50,000 toward trolley charging infrastructure.
Cost-Benefit Analysis for Phase One Fleet Electrification Scenario 2: Reduced Fuel Costs
The cost-benefit analysis compares the cost of transitioning the internal combustion engine (ICE) vehicles supported by the Phase 1 charging infrastructure project to electric vehicles (EVs) against a “do-nothing” scenario in which the City continues to operate and replace these vehicles with comparable gasoline- and diesel-powered vehicles.
Key Results
• The Phase 1 charging infrastructure project is intended to support charging for 118 City owned vehicles including light, medium, and heavy duty vehicles • Over the 10-year analysis period, the EV scenario has an estimated total cost of approximately $31.5 million, compared with $31.8 million for the ICE scenario. • This results in approximately $250,000 in net savings. • These savings are achieved despite the substantially higher upfront cost of purchasing EVs and installing the necessary charging infrastructure. • The primary drivers of the savings are:
o Approximately $6.7 million in fuel savings over 10 years, a 52% reduction compared with gasoline and diesel.
o Approximately $1.7 million in maintenance savings, a 37% reduction. o Approximately $3.95 million in HVIP and SCE incentives, LCFS credit revenues, and recent funding from South Coast AQMD (MSRC) that further reduce the cost of electrification.
Table 1. 10-Year Cost Comparison – ICE vs. EV Scenario
Cost Element ICE Scenario EV Scenario Change with EV Adoption Vehicle Cost $14,245,632 $20,971,452 +$6,725,820
Fuel / Electricity Cost $12,904,457 $6,184,750 -$6,719,707 Maintenance Cost $4,649,235 $2,923,059 -$1,726,176
EVSE Capital $1,779,518.12 +$1,779,518
Engineering & Construction $3,643,536.56 +$3,643,537
HVIP Incentive ($1,110,000) -$1,110,000
SCE Rebate – Make Ready ($890,155) -$890,155
SCE Rebate – Transit Chargers ($235,000) -$235,000
LCFS Credit ($1,462,941) -$1,462,941
MSRC Funding ($250,000) -$250,000
Total 10-Year Cost $31,799,324 $31,554,219 -$245,105
Note: A positive value in the “Change with EV Adoption” column represents an additional cost associated with electrification, while a negative value represents a cost reduction, incentive, or revenue.
What Drives the Cost Difference?
• Higher vehicle acquisition cost: Purchasing the EVs costs approximately $6.7 million more than purchasing comparable ICE vehicles.
• Charging infrastructure investment: The EV scenario requires an additional $5.4 million for EVSE equipment, engineering, and construction.
• Fuel savings: These additional capital costs are substantially offset by approximately $6.7 million in fuel savings. Electricity costs are approximately $6.2 million over 10 years compared with $12.9 million for gasoline and diesel.
• Maintenance savings: EV adoption reduces estimated maintenance expenditures by another $1.7 million over 10 years.
• Incentives and LCFS revenues: HVIP, SCE rebates, funding from South Coast AQMD MSRC and LCFS credits provide approximately $3.95 million in additional cost offsets. • Net result: After accounting for all costs and benefits, the EV scenario is approximately $2.8 million less expensive over 10 years than continuing with ICE vehicles. -$3.95
$14.2
$21.0
$13
$6
$5 $3
$1.78
$3.64
($10)
($5)
$0
$5
$10
$15
$20
$25
$30
$35
$40
Internal Combustion
Engine Electric Vehicles
Millions
Engineering & Construction
EVSE Capital
Maintenance Cost
Fuel Cost
Vehicle Cost
Incentives
Total of $31.6M (after incentives)
Total of $31.8M
SCE rebates: $1.1M
HVIP: $1.1M
LCFS:$1.5M
MSRC: $250k
Key Assumptions
• The analysis assumes a 10-year useful life and that the City replaces the vehicles at the end of this period. This is a conservative assumption; using a 15-year useful life results in substantially greater savings from electrification because fuel and maintenance savings continue for an additional five years.
• Energy prices are based on recent/current costs of $5.00/gallon for gasoline, $6.00/gallon for diesel, and approximately $0.25/kWh for electricity under applicable SCE rates (TOU-EV-9).
• Vehicle acquisition costs incorporate recent manufacturer/vendor quotes, including current pricing for trolleys and other medium- and heavy-duty vehicles. • Charging infrastructure costs use actual PowerFlex project costs for the City Hall and Corporation Yard installations rather than generalized charging infrastructure assumptions.
• The analysis incorporates currently available HVIP incentives, SCE make-ready and transit charger rebates, funding approved by South Coast AQMD MSRC program and LCFS credit revenues.
• The City was awarded $250,000 through the MSRC Zero-Emission Transit Bus Incentive Program to support the purchase of two Class 4–6 electric trolleys and associated charging infrastructure.
• The award includes $100,000 per electric trolley ($200,000 total) and $50,000 toward trolley charging infrastructure.