Kingston overcomes fleet electrification barriers by adopting a leasing model

This article is part of a series called How communities across Canada are electrifying their municipal fleets. Each article explores an innovative approach to electrifying municipal fleets. The series features inspiring ideas and projects being implemented in Canadian cities and towns of all sizes.

Kingston, ON, is located on the northeastern end of Lake Ontario, with a population of 133,000. When the city committed to converting additional light-duty municipal fleet vehicles to electric vehicles (EVs) upon their scheduled replacement dates, staff faced financial, technological and policy barriers to purchasing EVs. Developing EV leasing agreements allowed the municipality to leverage technological advancements as they become available in the market in the shorter term without committing to longer-term vehicle ownership. Under their current leasing model, Kingston will take delivery of 8 EVs, including seven cross-over Sport Utility Vehicles (SUVs) and one transit electric cargo van and 3 Plug-in hybrid electric vehicle (PHEV) SUVs in 2023-24. This case study outlines certain barriers, corresponding actions, and lessons learned.  

In 2014, Kingston released its Climate Action Plan, committed to reducing 30% greenhouse gas (GHG) emissions from municipal operations and fleets by 2030 compared to 2011 and becoming carbon neutral by 2050. In 2017, staff developed a preliminary strategy for EV adoption within the municipal fleet and the community. The following year, a budget was allocated to implement the Kingston EV Strategy. In 2021, the city’s Corporate Fleet Services Department entered into its first agreement with Enterprise Fleet Management to lease 15 Ford Escape Hybrids. These vehicles were received in October 2021. In 2022, an additional leasing agreement was signed with Enterprise Fleet Management to acquire 25 light-duty internal combustion engine (ICE) vehicle replacements, which included 8 EVs and 3 PHEVs to supplement their existing fleet of 24 EVs and PHEVs.  

Kingston’s fleet staff faced challenges in acquiring funds for EVs due to competing priorities for initial capital. Moreover, the fleet operators reported battery range anxiety, and the staff faced procurement barriers due to limited vehicle inventory in the market. Additional challenges included the inability to predict lifecycle and replacement costs with the rapidly changing EV technology and procurement challenges for newer EV technology. 

To overcome these challenges, Kingston pursued an EV leasing model. The lack of a municipal leasing policy created a roadblock, which was overcome by collaborating with the city’s finance department. Kingston entered an agreement with Enterprise Fleet Management, a fleet management provider to government organizations and an approved vendor through the Canoe Procurement Group supported by the Association of Municipalities of Ontario. Working with a fleet management company allowed Kingston to evaluate EVs from various manufacturers and leverage data compiled from multiple original equipment manufacturers.  

The leasing model allows for testing of vehicles before committing to purchase, trials of various EV makes, models and technology available in the market, and helps drivers with range anxiety. In addition, the leasing approach allows for a turnover of light-duty vehicles every four to five years – bringing down maintenance costs. 

For example, a 10-year leasing agreement for a Hybrid pick-up and EV cargo van is expected to save $16,610 and $11,710, respectively, compared to an outright purchase of a similar fleet asset. The annual fuel economy savings derived from the Geotab Telematics system show approximately 13.5 litres per 100 km, with cost per litre assumed at $1.50 for unleaded gas to establish a baseline fuel cost for comparative purposes. Expected maintenance cost is estimated to reduce by 25%. In addition, Kingston is expected to reduce their carbon emissions by approximately 41.1 metric tons of CO2 per year by replacing the 11 ICE vehicles with 8 EVs and 3 PHEVs. 

Developing a comprehensive EV leasing policy through inter-departmental collaboration streamlines the EV leasing process. As Kingston’s leased EVs begin to arrive, new lessons will be learned about the operationalization of cross-over EVs in the fleet. An evaluation of the leasing model will determine the success of this approach and future actions.