USPS Plans to Electrify 75% of its Fleet
After improving its financial outlook and receiving a funding jolt from Congress, the Postal Service will only buy EVs starting in 2026.
Three-quarters of the vehicles the U.S. Postal Service plans to purchase over the next six years will be electric, the mailing agency announced on Tuesday, once again significantly upping the rate and delivering the makeup for which the White House and congressional Democrats have long pushed.
USPS will begin by ensuring 75% of the 60,000 vehicles it buys off its contract with Oshkosh Defense before 2026 are electric, as well as slightly less than half of the 46,000 vehicles it will buy “off the shelf” in the same time period from commercially available products. Postal management said on Tuesday all of the vehicles it purchases after 2025—up to around 60,000—will be electric. That would result in around 75% of the 165,000 total new vehicles—and 62% of the more than 100,000 vehicles it will purchase in the next four years—being electric.
The plan increases the rate of EVs from the previous promise of 40% of the initial order of 85,000 vehicles, which itself was raised from the initial goal of 10%. Postmaster General Louis DeJoy has consistently promised to increase the EV purchase rate if funds became available and routes evolved to better accommodate the technology. Congress provided $3 billion for USPS to buy more EVs and charging stations as part of the Democrats’ Inflation Reduction Act, which President Biden signed into law in August. DeJoy said on Tuesday the EV spending will cost $9.6 billion.
White House climate officials joined DeJoy at USPS headquarters on Tuesday to make the announcement, marking an end to public conflict between the two parties. The Biden administration criticized USPS and pushed it to conduct a new environmental impact study to justify its plan to buy primarily gas-powered vehicles, saying its original study was insufficient and rested upon faulty assumptions. After initially declining to do so and saying a new review was unnecessary, postal management in June said it would supplement its study and potentially expand the number of EVs it planned to buy.
That announcement followed President Biden in April signing into law the first significant postal reform law in 15 years, which is expected to save a combined $107 billion for USPS by eliminating existing debt and taking future liabilities off of its books. It ended fiscal 2022 with a profit of $56 billion as a result of that financial relief.
DeJoy on Tuesday directly praised the White House and its Council on Environmental Quality and Climate Policy Office for their "collaborative spirit."
“These professionals have demonstrated a real appreciation and understanding for how vehicle electrification can be incorporated into the Postal Service’s mission and transformation, while not distracting from it,” DeJoy said. “In our own way we have all been faithful stewards of how IRA funding and postal funding will be spent.”
John Podesta, a senior advisor at the White House for clean energy innovation, praised the Postal Service for committing to buying zero emission vehicles one year before Biden required it for the rest of federal government.
The plan, Podesta said, "shows tremendous leadership from the Postal Service."
DeJoy said his negotiations with the White House were collaborative and casual. Both sides kicked off the discussion by presenting their position statements, but they then gave each other feedback and began trading numbers back and forth. Prior to Podesta's involvement, DeJoy said he had faced some pressure to make 100% of his vehicle purchases electric. The postmaster general has long suggested that is unrealistic due to the specific distances and terrains of certain routes. Due to his preexisting relationship with Podesta and other White House officials, the postmaster general said both sides were able to reach an agreement on USPS' investment and an overall EV target.
"As long as people are interested in solving the problems, we could find a way forward with me," DeJoy said. "It would be very silly, nevermind me, for the organization, for me to set a long-term trajectory that's at odds with what the White House and Congress wanted us to do."
Postal management pointed to its plan to consolidate many of its processing facilities into mega-centers—and rerouting letter carriers to centralized sorting centers to pick up their mail to deliver each morning—in justifying why more EVs make sense operationally. The revised network, part of DeJoy’s 10-year break-even plan, will lead to fewer trips between facilities, more optimized routes and charging stations consolidated at fewer locations.
“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,” DeJoy said. “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.”
Brenda Mallory, who chairs the White House's Council on Environmental Quality, said at the announcement at USPS headquarters in Washington that the new plan help the Biden administration reach its climate targets.
"This announcement lays a pathway that will help achieve all of President Biden's climate goals and make a real dent in our efforts to tackle the climate crisis," Mallory said. "The Postal Service is cementing itself as the leader in accelerating the expansion of electric vehicles across the United States and proving that it can continue delivering its trusted services in a cleaner more effective way."
USPS previously vowed to conduct additional impact studies before each round of vehicle purchases, saying it will carry out those evaluations frequently so it can quickly adapt to changes in technology, market conditions and its own operational strategy. It did not commit to buying more than the initial 50,000 vehicles through its Oshkosh contract, saying instead that it will weigh tapping into it versus simply buying off-the-shelf options. It will now buy at least 60,000 Next Generation Delivery Vehicles through the contract.
Critics of the Postal Service’s former plan highlighted that the new, gas-powered trucks are only expected to increase the fuel economy from 8.2 miles per gallon in the current iteration to just 8.6. Postal officials have noted current vehicles do not have air conditioning, and the vehicles will get 14.7 miles per gallon when the cool air is not running. The new vehicles will also have more cargo space and require fewer trips, USPS has said.
Lawmakers and environmental groups had joined the White House in blasting the Postal Service’s original plan to buy a much smaller share of EVs, leading to the introduction of legislation and the filing of lawsuits. Democrats recently upped their pressure on the postmaster general, demanding USPS revise its plans after Congress provided the $3 billion. The Postal Service ended fiscal 2022 with $23.6 billion in cash on hand. It will begin deploying the new vehicles in late 2023.
Looking to set aside his once adversarial relationship with Democrats and the White House, DeJoy assured those attending his event that he could be trusted.
"We'll make you proud in the implementation," DeJoy said.
This story has been updated with additional detail and comment.