How Taxpayers Will ‘Bailout’ the USPS and the Chevy Volt

The Office of the Inspector General released a 23-page report titled ‘Electrification of Delivery Vehicles;’ and concluded that since there are electric cars that can go up to 40 miles before recharge, and that about 99% of it’s delivery routes are shorter than 40-miles, the electrification of delivery vehicles is possible.

Postmasters Concludes It’s Feasible

With a large geographically dispersed vehicle fleet and short delivery routes, the Postal Service makes a particularly interesting national laboratory for testing technological advancements of electric vehicles (EVs) sought by the President through the Department of Energy (DOE).

In summary, use of electric vehicles for Postal Service deliveries is operationally feasible and could provide a valuable opportunity for the nation to test EV technology.

Oh wait, the report also states that because the USPS is in ‘financial crisis,’ it will need government funds to help initiate President Barack Obama’s plan to lay the green “foundation for our lasting prosperity.”

Chevy Volt

It looks like the Chevy Volt will replace the box-framed delivery vehicles.

While the report does not mention the Chevy Volt by name, it is not hard to connect the dots. Much fanfare has been made about the Volt’s ability to go 40 miles on electricity alone (it’s the only mass-market vehicle to do so).

So it comes as no surprise that the inspector general’s report focuses exclusively on this magic number. Furthermore, the report suggests the electrification can happen within the next year. The USPS is not about to develop a new private label vehicle, especially when another government subsidized organization—General Motors—is set to release a vehicle that matches all the needs of this USPS study.

The USPS has 219,000 vehicles in their fleet.

The Chevy Volt has come under harsh criticism for it’s pricing. Specifically, few consumers will be willing to pay $40,000 base price for a car that competes with $25,000 hybrids.

It’s no wonder GM told remaining dealers to start to think small.

Selected Excerpts from the Report:

Magic Number: 40

Previous delivery operations tests under favorable environmental conditions within California have shown that the EV performance levels were adequate for mail delivery ranges of up to 40 miles a day and battery technology has advanced considerably since then resulting in significantly increased driving distance ranges. Only about 3 percent of the delivery fleet has driving distances that exceed that daily distance. Electric vehicle battery companies indicate they are able to produce batteries with up to a 40-mile range and can provide range extenders if needed.

Charts and Graphs from the Study:

Government Funds

The entire report says it is technologically feasible, but very expensive and no one—except the U.S. government would fund such an operation.

The Postal Service is currently in the midst of an economic crisis and does not have capital funds easily accessible to spend on such an endeavor. Thus, without extensive funding by the federal government or private entity partners, it is not currently economically feasible for the Postal Service to do a broad fleet purchase.

Due to the Postal Service’s current financial distress, government funds and vehicle to grid (V2G) revenue would likely be needed to make this transition economically feasible. The Postal Service’s difficult financial condition requires it to prioritize limited capital funds available… In this scenario, electrification of the Postal Service delivery vehicles can occur if the agency obtains significant federal government funds.

National Libratory

In the nation’s service, the USPS will serve as a testing ground for the new vehicles. (The USPS already has trouble delivering mail—according to Obama—so by adding the electrical vehicle variable to their logistics may prove disastrous, especially in less than ideal weather conditions).

In March 2009, President Barack Obama toured a California electric car plant and announced a $2 billion grant program to develop electric vehicles. He stated, “we can remain one of the world’s leading importers of foreign oil, or we can make the investments that will allow us to become the world’s leading exporter of renewable energy. We can let climate change continue to go unchecked, or we can help stem it. We can let the jobs of tomorrow be created abroad, or we can create those jobs right here in America and lay the foundation for our lasting prosperity.”

The Postal Service could serve as a national laboratory for testing of electric vehicles. Its position in the market place as well as its expansive delivery network provides a unique opportunity to test electric vehicles. Several factors make the Postal Service fleet an interesting national laboratory, including:

• A large vehicle fleet that is geographically dispersed for relatively short mail delivery routes.
• The delivery fleet is aging and the Postal Service will have to replace them to avoid excessive maintenance costs.
• High potential economic value due to off-peak charging requirements and current low miles per gallon vehicles.
• Experience with electrical vehicles in operations.

The Postal Service owns and operates the largest civilian vehicle fleet in the world including approximately 146,000 vehicles used for mail delivery. The Postal Service reaches every household in geographically diverse regions which provides for testing in many different climate and terrain conditions.

Create Jobs

If going green wasn’t enough motivation to bailout another company, the USPS says this program will create jobs:

Creation of jobs – Although there is limited quantifiable data on job creation for an investment in EVs, American electric vehicle manufacturers would likely have to expand U.S. capacities to accomplish a large purchase effort. One major American automobile manufacturer has indicated they would retool an idle plant if the Postal Service decides to order new EVs.