US Cities Want to Buy $10 Billion Worth of Electric Vehicles

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A group of 30 U.S. cities has asked automakers for information on the cost and feasibility of delivering 114,000 electric vehicles worth about $10 billion for municipal use. The cities are interested in electric vehicles for police, fire and public services functions.

The request comes at a time when President Trump is expected to announce a review of the fuel economy and carbon emissions standards approved by the Obama administration just days before the former president left office. Trump is traveling to Michigan Wednesday afternoon to meet with auto industry leaders.

The cities’ effort is being led by Los Angeles Mayor Eric Garcetti and could be a significant driver in the market for plug-in electric vehicles. In 2016 the market for plug-in vehicles totaled 160,000 vehicles.

The city of Los Angeles’s chief sustainability officer told Bloomberg News in an email, “No matter what President Trump does or what happens in Washington, cities will continue leading the way on tackling climate change.” Most of the cities involved in the effort have Democratic mayors.

The mayors of Los Angeles, San Francisco, Portland and Seattle released a request for information in January inviting automakers to discuss plans for meeting an order for up to 24,000 electric vehicles. Since then another 24 cities, including New York, Chicago, Boston, Denver, Kansas City and Houston, have joined up.

One of the complaints that automakers have lodged against the current rules on fuel economy and emissions is that carmakers build cars that U.S. consumers want to buy. Having to meet a fuel economy fleet rating of 54.5 miles per gallon by 2025 means the industry will have to build cars that nobody wants.

What the cities are hoping to prove is that demand is there for automakers to build cleaner and more fuel-efficient vehicles. Colin McKerracher at Bloomberg New Energy Finance noted:

I wouldn’t underestimate this. What automakers really want in investing in electrification, whether that’s for passenger vehicles or commercial-use vehicles, is certainty.

Still, 114,000 vehicles likely spread over several years doesn’t move the needle much for an industry that sold more than 17 million vehicles in each of the past two years.