Driving the Transition: Universities as the Next Frontier for Fleet Electrification
Written by Aaron Boockvar-Klein (MESc ’27) and Spencer Burget (MBA/MEM ’27)
Investing in Transportation Electrification
The Connecticut Green Bank is a quasi-governmental state agency that accelerates the green economy by using limited public dollars to attract multiples of private capital investment. Over the past few years, the Green Bank has grown its transportation electrification offerings, from financing for electric vehicle (EV) chargers at homes and offices to school bus electrification (Clean Transportation Offerings - CT Green Bank | Accelerating Green Energy Adoption in CT). Looking ahead, university fleets and shuttle services offer a potential next step for the Green Bank to continue driving clean transportation market development across Connecticut.
This semester, Aaron Boockvar-Klein (MESc ’27) and Spencer Burget (MBA/MEM ’27) set out to assess this potential investment opportunity as part of an independent study advised by Stuart DeCew (MBA/MEM ‘11) with support from Sara Harari (MBA/MEM ‘19) and Kevin Moss (MBA ‘24) from the Green Bank. Through 11 industry interviews, including with 6 universities in Connecticut, alongside market research and financial analysis, the student team assessed the state of university fleet electrification and identified potential investment themes for the Green Bank.
University Fleet Electrification Market Landscape
The team found that the university fleet electrification market is nascent but growing quickly driven by institutional commitments to sustainability, expanded EV model availability, and increasingly favorable total-cost of ownership economics. Universities in Connecticut have deployed at least 45 EVs to support their campus operations, representing over 2% of the estimated 2,000 vehicles operated by universities in the state. These EVs represent an increasing share of new vehicle sales as universities look to scale from pilot deployments to wide-scale adoption. Every university interviewed described strong institutional support for electrification as well as tangible progress and plans to continue deploying electric vehicles.
However, universities still face many barriers to electrifying their fleets and shuttle services, including incremental upfront costs, charging infrastructure needs, unstandardized procurement models, and complex ownership structures.
The team identified four key themes from conversations with university fleets:
1) From OpEx to CapEx
In addition to technical complexity, electrification brings considerable operational complexity to internal processes which have historically been designed for internal combustion engine (ICE) vehicles.
Electrification broadly represents a shift from operating expenses (OpEx) to capital expenditures (CapEx), trading higher upfront costs for fuel and maintenance savings. Many universities budget these line items separately, which can pose a barrier to EV adoption for fleets who purchase vehicles outright. This challenge is likely to intensify as fleets reach higher levels of adoption. Universities should be prepared to adjust fleet capital and operating budgets accordingly to reflect the cost profile of EVs. Financing partners like the Green Bank can help smooth this transition through financing upfront costs, including the installation of charging infrastructure which may lack traditional financing mechanisms.
2) Electricity as a Fuel
Paying for electricity as a fuel presents a further operational challenge and cost shift for universities as they transition to EVs. Today, a driver with a university vehicle typically pays for fuel at public gas stations using a university-issued fuel card. Many fleets are utilizing this same approach for EVs, providing fuel cards for use at shared or public charging infrastructure. However, as fleets move past pilot deployments, many are starting to install their own EV charging stations dedicated to fleet vehicles. Compared to public charging infrastructure, these dedicated fleet charging stations can offer a more reliable, accessible, and affordable way to fuel EVs, but they require important operational changes from the traditional fuel card model.
Typically, dedicated fleet charging stations do not have payment systems. Instead, the cost of electricity is absorbed into existing utility bills where the charger is installed. This means that the cost of fueling the vehicle shifts onto whoever pays for electricity where the charger is installed. In some cases, including universities with centralized energy generation or procurement, this may lead to a different department paying for the fuel than the one using the vehicle.
In this way, it is much more challenging for universities to track the cost of fuel incurred by EVs (and EV-using departments) compared to ICE vehicles. While masking the fuel cost of EVs may improve the economics of electrification for the department using the vehicle, it distorts the true cost of operating an EV and will likely not be sustainable as fleets continue to transition.
Fleets should proactively prepare for the internal cost shifts associated with the EV transition. Specifically, fleets should either allocate additional budget to energy procurement and generation to accommodate the growing load of EVs or should develop internal processes to meter and recoup electricity fuel costs from the departments using the chargers. In either case, it is important to set realistic expectations about the cost of operating an EV and to be intentional about providing any implicit subsidies for EV charging.
3) Procurement Standardization and Centralization
A common theme among universities was support for standardized procurement decision-making. Standardization included both shifting to centralized procurement through the Facilities or Logistics department as well as purchasing through streamlined vendor contracts for EVs and charging infrastructure.
A centralized fleet agency is better suited to orchestrate a fleet-wide transition to EVs than individual departments. They can conduct comprehensive total-cost of ownership analyses, sequence the fleet transition, and plan infrastructure buildout accordingly. This centralized planning will be particularly important as fleets transition from one-off pilot projects to full scale fleet electrification. Fleets that are too small to support a fully centralized fleet agency should still strive to centralize planning processes specifically as it relates to charging infrastructure.
4) Proactive Infrastructure Planning
Unlike ICE vehicles, EVs need charging infrastructure, which adds a planning element to the puzzle. Charging infrastructure requires significant capital investment and location siting, including assessing electric distribution network hosting capacity. Proactive inclusion of charging infrastructure in large capital projects, such as new garages or new buildings with parking spaces, can help allocate budget toward charging infrastructure needs and avoid costly renovations in the future. Further, existing capital projects may be a convenient time to invest in distribution network upgrades, which may be prohibitively expensive on an ad-hoc basis.
Charging infrastructure planning should be coordinated across the fleet to avoid overbuilding and to share charging infrastructure where feasible. University vehicles tend to operate at low mileages and likely do not need individual chargers. Instead, universities should look for opportunities to serve multiple fleet vehicles with a single charger in order to spread the charging infrastructure costs over more vehicles.
The Road Ahead
University fleets are nearing an inflection point in the EV transition as they expand from pilot projects to full scale adoption. This transition will require universities to adapt their operations, procurement processes, and financing models to the unique characteristics of EVs. Processes that worked for small scale EV adoption may not work at higher levels of EV penetration. Specifically, relying on grant-funded charging infrastructure, absorbing internal cost shifts, and installing charging on an as-needed basis will pose challenges as further electrify. Universities should be proactively developing processes that will scale with their EV fleet.
On the Green Bank side, the team identified several potential market interventions where low-cost capital could address some of these challenges unique to university fleets. By blending capital with subject matter expertise and replicable procurement and operating procedures the Green Bank is exploring ways to help universities develop and implement these sustainable frameworks for electrification.