Indianapolis will be the first market for a new business leasing electric-vehicle fleets, under a $32 million, seven-year contract that the Department of Public Works inked in February.
The city has been working with the venture-capital-backed company, Vision Fleet, for months, but Mayor Greg Ballard only announced Tuesday morning the plan to replace gas-powered cars in the city's fleet with 425 plug-in hybrid and pure-electric vehicles by 2016. The cars, including such models as the Nissan Leaf and Chevrolet Volt, would be used for a variety of city services, but not for police-pursuit purposes.
The plan plays into Ballard’s declaration in 2012 that Indianapolis would try to convert its entire non-police fleet, which is about 5,000 vehicles, to non-oil fuel sources by 2025.
“The mayor is taking the boldest initiative in the country to want to deploy this fleet,” Vision Fleet CEO Michael Brylawski said. Brylawski attended a press briefing Tuesday morning with administration officials. Ballard did not attend.
Brylawski, a former sales and marketing executive with the defunct firm Bright Automotive, said Vision Fleet’s business model was developed by Vision Ridge Partners, a Boulder, Colorado, venture firm that focuses on green businesses.
Vision Ridge formed Los Angeles-based Vision Fleet to seek out business opportunities, and Indianapolis is Vision Fleet’s first customer, he said.
Fleet owners wanting to buy electric vehicles face the same barriers that solar-panel users faced 10 years ago, Brylawski said. They lack money for up-front purchases; they can’t take advantage of federal tax credits; and they don’t know how to use the vehicles effectively, he said.
Vision Fleet will buy the cars from local dealers and rent them back to the city. The company also will provide all of the maintenance and management with an emphasis on effective deployment. Vision Fleet’s analysis already has helped the city eliminate 100 gas-powered cars from the fleet, Ballard spokesman Marc Lotter said, in addition to the 425 cars that will be replaced.
City officials say the cost of the program will be less than the expense of maintaining the gas-powered vehicles to be replaced.
According to a city press release, each gasoline-powered sedan in Indy’s fleet would have cost taxpayers about $9,000 per year over the next decade, including purchase, fuel, maintenance and insurance. The Vision Fleet vehicles will cost about $7,400 per year over that period, saving taxpayers about $1,600 annually per vehicle.
Lotter said the city will pay its annual fees to Vision Fleet through the savings on fuel and other vehicle costs. He said the city's total fleet costs, including payments to Vision Fleet, will be "nominally less" this year, and will decline by 2016. City officials couldn't immediately specify total fleet costs.
The city issued a request for information in 2013 to find potential financing for fleet conversion, said Jeremiah Shirk, chief of staff in the Department of Public Works. The respondents were traditional vehicle-financing companies. Vision Fleet, which was formed later in 2013, did not respond to the RFI.
Buying electric vehicles outright would have cost the city $12 million to $13 million, Shirk said. The rental agreement with Vision Fleet will allow flexibility to use different types of cars—all-electrics or hybrids—and take advantage of forthcoming technology, he said.