Joint National Procurement of Electrical Vehicles

The principle objectives of the joint procurement were to take the country's first significant step towards creating a demand for electric vehicles and to demonstrate Sweden's market potential to manufacturers. Another aim, aside from contributing towards quieter and cleaner fleets, was to optimise available deals on purchasing EVs or PHEVs. The minimum targets set included: the participation of 150 buying organizations, total demand for 5000 vehicles and offers from 8 manufacturers. In October 2010, public and private entities in Sweden joined forces to conduct a national procurement of Electric Vehicles (EVs) and Plugin Hybrid Electric Vehicles (PHEVs). An invitation to participate was issued and interested parties worked together to define parameters for bidder qualification and the tender process. The first qualification stage meant that approved suppliers could let their European offices know in good time that there was an opening for supplying EVs to a large number of customers in Sweden. Renewed competition tendering was a new procurement method and it had to be carried out under the framework contract for public authorities before orders could be placed. Two contracts for the purchase/lease of electric vehicles were signed and commenced in October 2011. Each contract is for a two year period, with the option to extend to up to 4 years. The reason two separate contracts were used was to accommodate the different entities joining the procurement 1) Electric vehicles 2011: Public bodies and 2) Electric vehicles 2011: Private organisations. Procurement criteria included technical criteria, award criteria and contract performance clauses: - Technical criteria: • For passenger cars: Electric vehicles should have an all-electric range of over 100 km and the energy consumption should be 0,37 kWh/km or below. Plugin hybrid electric vehicles should have all-electric range of over 20 km and CO2 emissions of maximum 50 g CO2/km. Both vehicles should be able to be charged using a Schuko socket in one phase, 230V/10A, their top speed should exceed 100 km/h and their maximum cost should be 400 000-650 000 SEK (48 000-78 000€). • For transport vehicles: Electric vehicles should have all-electric range of over 100 km and plugin hybrid electric vehicles over 20 km. Both types of vehicles should be able to be charged using a Schuko socket in one phase, 230V/10A, their top speed should exceed 90 km/h and their maximum cost should be 600 000-800 000 SEK (72 000-96 000€). - Award criteria: • Euro NCAP (European New Car Assessment Programme) scores or similar for both passenger cars and transport vehicles • Total >32.5/28 p • Pedestrians >9.5 p • Whiplash protection > 2 p • Electronic Stability Control (ESC) • Possibility to install alcohol lock - Contract performance clauses: Prior to the start of the contract, a risk assessment was conducted which highlighted priority environmental aspects associated with electric vehicles, including the use of metals like cobalt and lithium, as well as nano products. Due to the immature nature of the market, it was decided these issues would be explored more fully a year into the contract. The idea was that at this stage manufacturers may have to propose improved methods for dealing with these materials. Although manufacturers of cars and batteries are required by law to take their products back and dispose of them in an environmentally responsible manner, these aspects are also monitored in practice by the contracting authorities throughout the lifetime of the contract. Success factors The joint procurement proved to be successful in terms of creating a good scale of demand and saving individual partners time and money, especially smaller stakeholders. The two-step procurement procedure with a prequalification stage for bidders drew attention to the procurement from both national and international vehicle retailers. Key Results and Achievements The invitation to participate in the procurement attracted 296 organizations; 260 public and 36 private entities. Together the stated intent was to buy 1,250 vehicles per year, corresponding to 5,000 vehicles in total over the possible four year contract period. 12 manufacturers out of 14 qualified, 10 of these submitted tenders and 6 were successful. 2 were disqualified as the top speed specified was not met and another 2 because they did not provide information about service costs. A framework contract was entered into with 4 suppliers, for the provision of a total of 9 vehicle models. The contracts began in October 2011. Qualified suppliers had to accept orders by 1 October 2012 at the latest. Initially 400 call-off orders from public and private organisations were placed, but the number decreased to just over 300 during the final year. In total, more than 850 vehicles were ordered from the framework agreement (November 2014). Along with the 50 EVs from the test fleet, the procurement has contributed to the use of more than 900 plug-in vehicles in Sweden. Novelty: The main objective of the procurement was achieved; potential suppliers of electric vehicles are now aware of Sweden's interest, its well-developed charging outlet infrastructure and the country's relatively clean and cheap electricity supply. Renewed competition tendering, introduced after a change in legislation, was a new method not previously used in vehicle agreements. Initially, many of those making call-off orders worried that the procedure would be cumbersome and complicated. However, invaluable support, written and verbal, from SKL Kommentus (a procurement and business support provider) was available from the start. Once the renewed competition process was tried, it was found to be quite easy to manage. Sustainability Impacts: 90% of electricity in Sweden is generated through hydro- or nuclear power, causing much lower GHG emissions than electricity generated through the combustion of fossil fuels. Demonstrating this principle, calculations in this case indicate that for every 100,000km, the electric fleet would cause just over 1.3t CO2 to be emitted, compared to over 13.8t from an equivalent petrol fleet. Calculations conducted with assistance from the Royal Institute of Technology indicated that between January and June 2012, the vehicles purchased covered 55,403 km in total, which caused the equivalent of 0.73 t/CO2 to be emitted (Nordic energy mix = 66g of CO2 are emitted per KW/h). Compared to an equivalent petrol car, which would have emitted 7.65 t/CO2, it works out as a saving of almost 7 tonnes of CO2 over 6 months. Until October 2014, the assessed cars had driven 2.7 million kilometers and avoided carbon dioxide emissions by 325 tonnes. Regarding problematic substances e.g. cobalt, lithium and nanoparticles, a risk analysis was made and discussion with the manufacturers was opened. Manufacturers are aware of the issues related to electric cars, but there are no clear practices to deal with the substances yet. Cost-effectiveness: Maximum prices quoted for passenger cars ranged from the equivalent of just over €26,000 to under €40,000 and for transport vehicles from around €24,000 to €39,000. One bidder offered a 3% rebate for the consortium compared to the regular price and another offered lower prices but charged a monthly fee for leasing the battery. Challenges: Reaching an agreement on vehicle specifications was time-consuming and challenging due to the number of stakeholders involved and concerns over vehicle safety. The EV procurement received many incorrect tenders which could not be approved, due to ignorance and carelessness among the tendering suppliers. To facilitate bidding, the basic documentation could have been even clearer and simpler. Price caps could have been included and explained, not only for vehicles but also for services. We believe that some additional suppliers could have submitted tenders if they had understood the significance of maximum price. The advisory reference group was very clear that they wanted vehicles with maximum speeds of 90–100 km/h. The original proposal from the requirement specification group of 70 km/h for light trucks was rejected. Rather than increasing the maximum speed to 90 km/h for light trucks, speed requirements could have been specified at call-off. In such case, both IVECO and Mercedes could have been accepted for deliveries of their vehicles with maximum speeds of 70 and 80 km/h respectively, for buyers looking for slightly larger electric transport vehicles, and willing to accept lower maximum speeds. Safety criteria were widely discussed within the EV procurement and also externally, e.g. in the media. At the time of the procurement, no EVs had been tested in Euro NCAP or equivalent testing agencies. In other words, it was too early to specify safety requirements. In order to include these, the procurement would have had to be postponed for at least six months. Some of the vehicles in the EV procurement did not have the highest safety rating or anti-skid braking systems, and organisations refrained from buying these. The market for EVs is very immature and in general, demand is larger than supply. This made it hard to get lower prices or discounts in the joint procurement. The framework contract for procurement of electric cars is valid until the end of September 2015 and support and help with contracts is provided by the project. Data for the demonstration part of the project is being collected and analysis of data will take place in the end of 2015. Procurement of electric vehicles will continue and from now on EVs will be included in the regular procurement of vehicles. Sweden can become a world-leading nation within the area of plug-in vehicles through collaboration and coordination. The responsibility lies with all parties. The government has a major role to play in establishing clear long-term principles, and at the same time avoiding separate national solutions. Municipalities are responsible for a number of important control instruments: parking, traffic lanes, environmental zones and a large proportion of the charging infrastructure. It is considered crucial that companies review their vehicle usage and start replacing conventional vehicles with plug-in models. The car industry needs to work with product development and standardisation. Demonstrations and information are important activities. Individuals should consider their own needs of personal transport. An obvious focus, especially in towns, is to encourage more fleets to acquire plug-in vehicles. Fleet vehicles are often used for specific purposes, and cannot be replaced by public transport. As they are often used for short distances during day-time, EVs are perfect. Plug-in vehicles are an important component towards fossil fuel independence, but must be combined with other measures. Public transport, walking and cycling all contribute to improved personal mobility. Smart logistics are important for freight transports. Unfortunately, traffic problems cannot be resolved just by a transition to plug-in vehicles, although they constitute a vital part in the fossil-free vehicle fleet. Contact person for more information: Eva Sunnerstedt, Clean Vehicles in Stockholm, eva.sunnerstedt@stockholm.se