Lower Costs, Incentives Drive Electric Bus Adoption

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Scott Shepard, senior research analyst for Navigant Research, tells Trucks.com that the adoption of electric buses is gaining speed but the transition to zero emissions by public transportation agencies is not moving as fast as some might hope for. Worldwide, about 100,000 electric buses are sold annually, 95% of them in China. In the US, Navigant predicts electric buses will account for only 15% of the market by 2025. Even in China, where national policies strongly favor electric transportation, battery operated buses account for only 70% of the total bus market.

Proterra electric bus

California Leads The Way

Government policies are largely responsible for the growth of the electric bus market. Reducing carbon emissions is a worthwhile goal, but “This growth is driven largely by government policy — incentives and or fuel efficiency standards,” Shepard says. No state in America has more aggressive policies promoting zero emissions than California, whose Air Resources Board has approved a $208 million spending package for low and zero emissions bus and truck fleets.

California has spent $25 million to incentivize school districts to replace conventional school buses with low- or zero-emissions vehicles. The California Energy Commission has also spent another $75 million. As of May of this year, 132 battery-electric and fuel cell electric buses were being operated by public transportation agencies in California. Among the 163 public transit agencies, 655 more electric buses either on order, awarded or planned, according to CARB.

The Electric Bus Trend Is Up

“The trend for electrics is definitely moving up,” says Jeff Hiott, assistant vice president of technical services and innovation for the American Public Transportation Association. He says about 40% of U.S. transit agencies either had electric buses in operation or had awarded purchase contracts. In total, 1,200 electric buses are in operation nationwide.

“That doesn’t seem big but it’s a pretty steep upward climb when you go back just two or three years. The transportation industry in general has a very sustainable agenda. What we’re seeing is agencies looking at ways to be more environmentally friendly, and battery-electric buses are a way to do that,” Hiott says.

How Can Something That Costs More Cost Less?

After incentives, electric buses cost about 50% more than conventional diesel powered buses — $700,000 versus $450,000. Even buses that operate on compressed natural gas cost a mere $550,000. So why would a public transportation agency — which is always being squeezed by budgetary constraints — pay more for a zero emissions bus? Is it because their managers are wild-eyed climate activists?

Hardly. Lower costs of fuel and reduced maintenance costs will more than offset the higher upfront costs over the life of the vehicles. Those are the sorts of considerations that gladden the heart of professional fleet managers. A study by the National Renewable Energy Laboratory found that electric buses were eight times more energy efficient than those that ran on natural gas. They also reduced spare parts consumption by 80% per mile.

“Many of these technologies, like battery-electric vehicles, have been around for decades, but reaching economies of scale, those require some initial assistance to really help accelerate that commercialization curve,” says Christina Wolfe, a transportation analyst with the Environmental Defense Fund. After the initial research and development, “there’s a demonstration phase, then there’s more general market acceptance and then full-scale market adoption. It really depends on things like getting early adopters to validate the benefits of technologies,” she says.

Infrastructure In Flux

Charging infrastructure for electric buses is still something that is evolving. Is it better to charge en route, at the end of the line, or back at the transportation hub? Those questions are yet to be answered, but in places where solar power is abundant, charging could be done at times when prices are low. “It’s different from putting a fuel tank in and filling up a diesel bus. Power companies are also having to learn more about transit agencies to understand not just the power needs but the rate structures,” Hiott says.

Incentives Boost Economic Activity

Thanks to its broad array of incentives and zero emissions policies, California not only has more electric buses in operation than any other state, it is also attracting electric bus manufacturers. To date, Proterra, BYD, Ebus, Green Power Motor Co., and New Flyer Industries all have established operations in the state, adding manufacturing jobs to the state’s economy. Other states might want to perk up and take notice. Incentives are not just giveaways. They can lead to economic development as well, a consideration seldom taken into consideration by policy makers.

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Steve Hanley

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new."

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