Baltimore City to spend up to $5 million to buy Tesla passenger vehicles for use by government employees

Baltimoreans will be seeing more Tesla vehicles on city streets, after city officials decided to add two Tesla models to the municipal fleet.

Baltimore’s Board of Estimates voted at a recent meeting to spend up to $5 million to purchase electric vehicles (EVs) made by Tesla for use by city employees.

The city has been purchasing electric vehicles since 2018 but the latest action, on June 5, was the first time that city officials have voted to purchase vehicles from Tesla. It was also the first time that Tesla responded to a request for bids from carmakers seeking to sell vehicles to Baltimore.

The purchase comes as more and more municipalities and companies are buying electric vehicles to save money on fuel and cut down on emissions.

Last month, the city of South Pasadena, California, announced that it has become the first in the nation to switch to an all-electric police vehicle fleet after it bought 20 Teslas. The city estimates the purchase will save $400,000 over 10 years.

At the same time, at least one company, the German drugstore chain Rossmann, announced this month that it has decided not to purchase any more Teslas for company use because it doesn’t agree with the views of Tesla founder Elon Musk. Rossmann said it will continue to use the 34 Teslas already in its fleet of about 800 vehicles.

Carbon neutrality

In the case of the Baltimore transaction, a spokesman for the city’s Department of General Services (DGS) said officials followed the city’s standard procurement practices in purchasing electric vehicles from Tesla.

The DGS representative, communications manager John Riggin, said in an email message that Baltimore issued a request for bids from companies that would like to sell electric vehicles to the city; Tesla was one of two companies that responded to the solicitation; and the procurement bureau recommended that the Board of Estimates, the city’s spending panel, accept Tesla’s bid.

Riggin also noted that buying electric vehicles from Tesla is consistent with Zero-Emission Vehicles (ZEV) legislation that was passed by the Baltimore City Council in 2023 and requires the purchase of electric vehicles for all light duty administrative needs by 2030.

“The Mayor set a goal of carbon neutrality by 2045,” Riggin said in his email message. “To get there, we need to start the transition today. City Council Bill 21-0159 requires the purchase of EVs by 2030 for all light duty administrative vehicles.”

The request to spend $5 million came from the city’s Bureau of Procurement. According to information presented to the Board of Estimates, potential vendors were solicited on CitiBuy, eMaryland Marketplace and in local newspapers, with notices specifying that the city wanted to purchase “EV Passenger Cars/Sedans.”

Two bids were received and opened on April 3, 2024. One came from Waldorf Ford in Charles County, Maryland, and one came from Tesla, Inc. of Austin, Texas. According to an explanation on the Board of Estimates agenda, “Waldorf bid [to provide] electric Mustangs, which are considered SUVs and are not needed. Thus, the award is recommended to be made to Tesla to supply EV Passenger Cars/Sedans.”

The $5 million purchase agreement that was approved by the Board of Estimates was an “Equipment Maintenance/Service Contract.” The period of the agreement was from June 5, 2024 to June 4, 2027.

According to the materials presented to the board, the contract “has two, one-year renewal options at the sole discretion of the city. The above amount [of $5 million] is the city’s estimated requirement, however, the vendor shall supply the city’s entire requirement, be it more or less.“

The renewal clause means that the city may extend the end date for purchasing Tesla vehicles from June 4, 2027 to June 4, 2029.

Two different models

Riggin said he couldn’t say exactly how many Teslas the city will buy because they will be purchased over time and they haven’t been ordered yet.

He explained in his email message that the contract enables the city to buy two models, the Model Y and the Model 3. He said the starting price to the city for the Model Y is $31,490 (Rear Wheel Drive, Long Range Battery) and the starting price for the Model 3 is $33,990 (Real Wheel Drive, Standard Range Battery.) In addition, he said, the contract gives city officials the opportunity to choose from six different trim packages and an option to order All Wheel Drive and Performance Packages if either of those options is required.

Riggin said the Model 3 cars are made in Fremont, California, and the Model Y cars are made in Austin, Texas, and the city is buying the latest model year in every case.

“The number of vehicles purchased depends on the pricing and the models we choose,” he explained. “This contract allows us to purchase two of the models currently offered: the Model 3 and the Model Y. For each of these models, we can select from one of the three trim levels offered by Tesla. For example, while some agencies may not require an extended ‘Long Range’ battery, others might need it for efficient daily operations.”

If every car is sold for the Model Y starting price of $31,490, the $5 million contract would enable the city to buy 158 Teslas. If every car is sold for $33,990, $5 million would be enough to buy 147 Teslas.

Riggin said in his email message that the cars are being purchased for use by employees from multiple city departments. “The cars will be used across all agencies, primarily as administrative vehicles, to meet the requirements set by our ZEV legislation,” he wrote.

The city is working to develop a charging deployment plan that will match charging technology with the use profile of the vehicle, he added. “This could mean a dedicated Level 1 charger for a vehicle with moderate mileage per day or a shared Level 2 charger for multiple low mileage vehicles. DGS recently installed 8 EV Level 2 chargers at the Central Garage and is installing a DC fast charger to support the early adopters.”

Who gets a Tesla?

While the length of the average trip made by a city employee will be one factor in determining who is assigned an EV, Riggin said, the most significant factor is “the availability of an EV that can meet the operational needs of the agency.”

Riggin said Waldorf Ford’s bid wasn’t accepted because the Ford Mustang Mach-E model that Waldorf proposed to sell to the city is classified as a five-passenger SUV, or Sport Utility Vehicle, while the contract specifies “passenger cars/sedans.” The term SUV generally applies to vehicles that combine the features of a passenger car with aspects of an off-road vehicle.

City Council Bill 21-0159, the legislation that required the purchase of “Zero Emission Vehicles” by 2030 for administrative purposes, was introduced on Oct. 4, 2021, and passed by the City Council in the fall of 2023. Scott signed it into law on Dec. 7, 2023. The legislation did not apply to police cruisers and the $5 million contract approved in June for Teslas was to purchase vehicles for administrative use, not for use as police cruisers.

South Pasadena’s experience

South Pasadena’s transition to all-electric police vehicles was authorized by its City Council in 2022, following three years of research involving 35 other U. S. municipalities that bought Teslas. California has some of the highest gas prices in the nation.

In documenting its purchase of 20 Model Y Tesla vehicles for its police department after two years of use, city officials said the Tesla police cruisers proved to outperform the gas-powered vehicles previously in use while also being safer, cheaper and eliminating greenhouse gas emissions.

A staff report estimated that South Pasadena’s transition is expected to save the city about $4,000 per vehicle per year, due to lower costs for energy and maintenance needs, and about $400,000 over a 10-year period.

“We had an existing fleet that was probably end of life three or four years ago so we were looking for a solution to replace our fleet all at once,” said Sgt. Tony Abdalla, in a video posted on social media by the police department. “What we found is Tesla was not only a viable option but it was the best option. The city is very environmentally and sustainability conscious. We got a much better performing car that costs significantly less to maintain and fuel.

“I think initially there were some concerns from the community: Why are we paying so much for cars?” Abdalla continued in the video. “But when you examine the total cost of ownership over a 10-year period, actually it becomes a significant cost savings. So when you look at the entire package, it became not only a viable solution, it became the best solution as well.”

The police department in another California city, Anaheim, added six Tesla police vehicles to its fleet as part of a pilot program launched in April.

Other countries are buying Teslas for governmental use as well. In China, the province of Jiangsu in June added Tesla to the list of car makers from which it will buy vehicles – the first time Tesla’s cars gave been made eligible for governmental purchases in any region of China.

Jiangsu has more than 80 million residents. Its provincial government approved purchase of the company’s Model Y vehicles, which will be made in Tesla’s factory in Shanghai. Previous restrictions were removed after Tesla received an endorsement from the country’s top auto industry association, which determined that Tesla’s vehicles complied with China’s manufacturing regulations, and after Tesla CEO Elon Musk visited China and met with a top official, Premier Li Qiang, in April.

Incompatibility

In Germany, the Rossmann drug store chain cited Musk’s support for presidential candidate Donald Trump as the reason it will no longer purchase Teslas. The chain is one of the largest in Europe.

In a press release issued on Aug. 8, the company said its decision was based on “the incompatibility between the statements of Tesla CEO Elon Musk and the values that Tesla represents with its products.” Musk endorsed Trump for president last month and on Aug. 12 had a lengthy conversation with Trump on his social media platform, X.

“Elon Musk makes no secret of his support for Donald Trump,” said Raoul Rossmann, son of company founder Dirk Rossmann, according to Reuters. “Trump has repeatedly called climate change a hoax – this stance is in stark contrast to Tesla’s mission to contribute to environmental protection through the production of electric cars.”

Musk’s views have in the past led companies to drop their advertising on X. In terms of their effect on Tesla’s reputation and sales, Musk maintains that his political comments have nothing to do with the quality and performance of the cars his company sells.

“Whether you hate me, like me or are indifferent, do you want the best car, or do you not want the best car?” Reuters quoted him as saying last November.