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Biden Administration Will Spend Nearly $10 Billion On Electric Vehicles For The Postal Service

The United States Postal Service announced a plan to spend $9.6 billion over the next five years to transition toward more electric delivery vehicles.

Funding for the initiative will come from regular Postal Service budgets and $3 billion from the Inflation Reduction Act, a piece of legislation signed by President Joe Biden to allocate more than $430 billion toward renewable energy programs.

“A key focus of our modernization effort is to reduce inefficient transportation and improve distribution operations, resulting in far less air cargo and far fewer truck trips,” Postmaster General Louis DeJoy said in a press release. “When combined with our substantial commitment to the electrification of our delivery vehicles, the Postal Service will be at the forefront of our nation’s green initiatives.”

A statement from the White House added that the funding will provide for the electrification of 66,000 delivery vehicles and the installation of charging stations at Postal Service facilities. Roughly three-quarters of the agency’s Next Generation Delivery Vehicles will therefore run on batteries instead of internal combustion engines.

Lawmakers recently passed a reform bill that will exempt the agency from pre-funding retiree health benefits while requiring future Postal Service retirees to enroll in Medicare, producing $50 billion in savings, according to a statement from Sen. Gary Peters (D-MI).

Among other measures, the Inflation Reduction Act greenlit electric vehicle tax credits of $7,500 for new cars and $4,000 for used cars, as well as 30% tax credits for home solar energy systems, according to a fact sheet. The White House has established the goal of procuring only 100% zero-emission light-duty vehicles by 2027 and will extend the same standard to all vehicles in the federal fleet by 2035, according to another document from the White House.

“The $3 billion provided by Congress has significantly reduced the risk associated with accelerating the implementation of a nationwide infrastructure necessary to electrify our delivery fleet,” DeJoy added. “While most of the electric vehicle funding will continue to come from Postal Service revenues, we are grateful for the confidence that Congress and the administration have placed in us to build and acquire what has the potential to become the largest electric vehicle fleet in the nation.”

The announcement from the Postal Service follows a similar initiative spearheaded by Vice President Kamala Harris to electrify the nation’s school buses. The project will use nearly $1 billion from the Bipartisan Infrastructure Law for rebates awarded to school districts that purchase electric school buses; the White House plans to spend $5 billion on the program.

The $913 million provided by the first funding round was used for 2,463 electric buses, implying an average cost of more than $370,000 per vehicle, which is twice as expensive as the typical diesel school bus, according to the Philadelphia School District, which added five new electric buses to its fleet earlier this year. Officials in the city expect annual fuel savings of $5,000.

Biden administration officials have also encouraged electric vehicle adoption in the private sector. Transportation Secretary Pete Buttigieg said during a keynote address at the Texas Tribune Festival earlier this year that residents of the Lone Star State could save on fuel by purchasing the new technology.

“Some of the best use cases for electric vehicles are in places like Texas,” Buttigieg said, “places where people spend more time in their vehicles, where you drive longer distances than in a dense coastal city and therefore spend more money on gas and therefore would save more money, provided you can afford an electric vehicle, which is why we’re fighting to make electric vehicles cheaper.”

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