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Post-OBBB math: fleet electrification gets harder, but many EVs will continue to be economic - if you know where to look

  • sherry8120
  • 3 days ago
  • 2 min read

Updated: 2 days ago

Now that the One Big Beautiful Bill Act (OBBB) has been officially enacted, we’re using this week at Rappel to take stock of what it means for corporate decarbonization opportunities. Is it all doom and gloom? Let’s discuss. 


We’re examining one major change per day. First up: the electric vehicle (EV) tax credit. 



🚨 The Federal EV tax credit is ending after September 30


This includes the $7,500 credit for new light-duty personal and commercial vehicles, along with the up to $40,000 credit for heavy-duty commercial EVs. Clearly, this makes each EV more expensive than it was before, but is it enough to change fleet decision-making? 



How the tax credit affects EV economics: a real-world example.


We used Rappel’s CO2-AIM model to evaluate our database of light-duty pickups, the linchpin of many commercial fleets.  The federal EV tax credit is worth an average of ~10% of the total lifetime cost of ownership (TCO) of a light-duty EV pickup truck in 2026, assuming a 5 year / 100K mile lifetime.  


Before the OBBB’s passage, EVs were more economical than conventional trucks for about 70% of the trucks in our database that are up for replacement in 2026.  After the OBBB, that number has dropped to about 32%.  But that means that EVs are still the economic choice for about 1/3 of the light-duty pickup trucks that we track.  Why?  



Location and use profile can swing economics by $20K or more, far more than the EV tax credit. 


Take two fleets of F-150s—one operating in Nevada, the other in Virginia. Each fleet includes vehicles driving approximately 10-30K miles per year. Using CO2-AIM, we compared the cost of new EVs to their conventional alternatives, excluding the federal EV credit (see chart below). 




EV economics are just as sensitive to local factors (gasoline is about $1/gallon less in Virginia than Nevada, while registration and insurance tends to be higher in Nevada ) and to usage characteristics (high mileage and duty cycles advantage EVs), as they were to the federal tax credit. Depending on where and how a vehicle operates, electrification may or may not pencil out. 



👉 Takeaway: EV economics are about 10% worse without the federal tax credit, but fleet managers still have many economic opportunities for EV adoption. 


Asset-level dynamics (location, usage) are even more important drivers of EV economics with the tax credit eliminated, so fleet managers will need a more tailored approach to maximize their economics. Beyond EVs, there are many additional economic options for decarbonizing many vehicles your fleet, including hybrids, downsizing, idle reduction technologies, and route optimization – none of which were affected by the OBBB. 



🔧 Need help navigating the post-OBBB world? 


We work with financially motivated companies to navigate decarbonization and operational excellence opportunities with specificity and affordability in mind.  






 
 
 
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