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Fleets Need to Walk the Talk, Start Buying Green Cars

It's time for fleet buyers to make a much bigger commitment to green, getting beyond small fractions to a majority of purchases. Right now they're just making excuses for why that isn't happening.

Since consumers aren't likely to line up to buy expensive electric and plug-in hybrid cars, the industry is hoping the fleet market -- commercial and government -- for much of the early demand. But although such a large market could develop, from the evidence of what's happened so far with hybrid cars, it's just not there yet.

The excuses shouldn't derail a big green buy. States and municipalities have to grapple with wholesale budget cutting, out-of-date priority purchase lists and domestic content requirements ("Buy American" means no market-leading Priuses). But none of that is insurmountable, and their rhetoric about buying green is seldom matched on the ground. Few states or cities have more than two percent hybrid fleets. And budget issues don't stop fleet operators from buying lots of top-of-the-line pickups almost as expensive as the hybrid alternative from Chevrolet. It's what they're used to.

The state that's setting an example is Washington, which has the highest percentage of hybrids at 54 percent of the fleet. No other state comes vaguely close in data from last September. Even green leaders such as California (one percent) and New York (also one percent) are just beginning to green their fleets. Bill Quinn, a spokesman for the New Jersey Treasury Department said the state has 378 hybrids out of 6,000 passenger vehicles. New Jersey doesn't show up on lists of top hybrid buyers.

Corporate fleet buyers want lower operating costs to balance out higher upfront costs or federal government grants to make up the difference. That's the reason UPS gave me for having only a few hybrid and battery electric trucks in its more than 60,000-vehicle fleet. But unless it wants to retract all those press releases about the long-term fuel savings of hybrids, it should take a big leap forward without having all of its extra upfront costs covered.

FedEx said eight years ago that it would replace its entire fleet of 30,000 medium-duty trucks with green vehicles in 10 years, but at last count it had only bought 1,800 of them. FedEx CEO Fred Smith, who is active in the Electrification Coalition, said last year in Congressional testimony, "With gasoline at $3 a gallon, a plug-in hybrid would save its owner $10,000 over the course of the vehicle's lifetime compared to a conventional vehicle." Gasoline is now $4 a gallon, so why isn't FedEx buying more of these money savers?

General Electric made just that kind of commitment when it said it would buy 25,000 electric vehicles, including 12,500 Chevrolet Volts. And that's what Johnson & Johnson did when it converted 22 percent of its fleet to hybrid. And what Hertz and Enterprise did in making big commitments to green car rental fleets.

The California State Automobile Association shows the way forward -- it may have only 425 vehicles, but 262 of them are hybrids. By contrast, big buyers like PepsiCo, AT&T and Comcast are at four percent or below.

The feds are just beginning to step up
The federal government is the biggest purchaser of vehicles, with a 650,000-strong fleet, but despite all sorts of Presidential orders and directives to buy green, the General Services Administration reported only 0.3 percent hybrid penetration by the fall of 2010. The GSA said it was using $287 million in stimulus money to buy 17,000 fuel-efficient cars from the Big Three in 2009, but even those won't make a big dent in such a huge fleet.

Dan Becker of the Safe Climate Campaign says it's time to get off the dime:

States buy lots of cars. They should make it a priority to buy hybrids, which will take away yet another excuse for U.S. automakers lagging on clean car production.
They should definitely make it a priority, but when 1.1 percent of the fleet is hybrid, they're certainly not doing it yet.


Photo: Flickr/Mandeep Flora
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