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Comment by ZeroGravitas | Hacker News Reader

This is a fairly standard reframing when your product has lower TCO but higher upfront costs.

If people just look at the upfront cost, they have that 2x or 3x gut reaction and just switch off.

Some nerdier types might draw up a spreadsheet and know exactly how many months they'd expect to break even and start saving.

People familiar with spreadsheets probably also don't have that much trouble getting loans and paying them back on time, and doing even more sums to see if that makes financial sense.

But your average school bus buyer perhaps needs someone else to do all that for them, hedge the risk and present it to them as an immediate saving on their monthly spend.

People have sold rooftop solar this way, or replaced kerosene lamps in Africa with solar and batteries, and EVs Vs monthly Car payment plus fuel.

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I'm not sure why you would assume that the average school bus buyer can't do a spreadsheet. Our local suburban NY school district is fairly run-of-the mill, and has a budget of $84 million with several million dollars of that being for transportation. We have our own busses and drivers, and they spend about a quarter million dollars a year on diesel fuel.

The Superintendent for business affairs that has an MBA from Columbia and earns $231,000, and should clearly be able to handle a spreadsheet and then making the yearly powerpoint presentations.

As much flak as people give "the government" for poor spending, there's actually a huge amount of auditing and checks in place for purchases by officials.

There's no way a decision like this gets made without a several "independent assessments" happening as a CYA move.

The administration of the Roslyn school district ripped off tax payers for years. While it was caught it took awhile to discover:

https://www.vanityfair.com/hollywood/2019/09/hugh-jackman-mo...

It was more a general point, and I did say 'perhaps', which was based on reading a headline that said "get EV busses for less than your monthly spend" rather than "EVs have lower TCO" which is the pitch I'd use for the more sophisticated buyer.

But maybe in this case, the buyer needs that sales pitch not for themselves but for the people who would be angry if they did something financially sensible with future payoff.

It's not just the cost over time, it's the availability of capital in large clumps - also known as "the cost of being poor:" It may be 5x cheaper in the long run to pay 3x the cost today, but if you don't have 3x the cost today, well, good luck.

Capex <=> Opex swaps are pretty common, and it's not just a matter of poverty. (It's why airlines lease their planes.) Swap "subscribe" with "lease" and this article becomes less interesting.

> Swap "subscribe" with "lease" and this article becomes less interesting

To VCs, too

Yeah, and school's budgets are cash tight, with comparatively little ability to fundraise, so any large cash transaction will be DOA.

The swap should take place, and I'm now wondering why this hasn't occurred.

Schools often issue bonds to cover large purchases. Plus, sometimes states/fed will toss them grants.

It's interesting to see how different bond proposals are received by the public. In the more conservative areas I've lived, adding a penny to the sales tax to fund school bonds is pretty much always approved by the voters and renewals are likewise rubberstamped. In liberal areas, that's a much more difficult tax to get passed, mainly on the grounds that it is regressive. School bonds secured with increased property taxes tend to work in the reverse, with property tax increases being popular in liberal areas but opposed in conservative ones.

>This is a fairly standard reframing when your product has lower TCO but higher upfront costs.

I'd say it's the opposite a lot of times. EVs are one such product. People will say, "sure I'm paying 20k more for the car, but I'll make it up in fuel savings and zero maintenance!" without ever calculating how much fuel and maintenance you'd actually have to use to break even. Then, of course, there is the regulatory and temporal risk that energy costs today aren't what they might be down the road, and that there are some high-ticket items an EV can have fail itself.

It's hardly ever a no-brainer, because the invisible hand tends to make it so.

>People have sold rooftop solar this way

So many companies have gone bust because of this.

School buses are bought by spreadsheet literate people. Understanding lifetime cost is a job requirement of the kind of people who run bus fleets and most people are qualified to do their jobs and do them satisfactorily.

This isn't a case where a good product isn't succeeding because "hurr durr the public is dumb". People have run the numbers. It just doesn't work, yet.

I want to see that spreadsheet.

https://afdc.energy.gov/files/docs/vice-beb.xlsx

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