The Genius Solution To The Electric Bus Problem
The electric bus revolution is about to take off.
While the prospect of major advances in electric buses receive a small fraction of the attention that electric vehicles receive, the potential for a major transformation is arguably much closer. As with EVs, electric buses promise lower life-cycle costs when compared to their gasoline and diesel counterparts, but upfront costs remain painfully high.
However, Proterra, an electric bus manufacturer, is rolling out leasing plans that could eliminate this barrier. Proterra and Mitsui & Co. are
It is the same approach that solar developers began using years ago: no upfront cost, just lease payments over time.
A 2018
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The CEO of Proterra told
Still, the steeper upfront cost today is one of the largest hurdles. Mitsui has agreed to provide a $200 million credit facility to help launch Proterra’s battery leasing program. A new diesel bus can cost about $500,000 while also incurring around $1 million in maintenance and fuel costs over its lifetime, according to Proterra’s Ryan Popple and
By adding in a lease for the battery, the electric bus can make sense right away, rather than having a long payback period. “On a percent basis, it takes the upfront premium for an electric bus from 50 percent to zero,” Popple told Greentech Media. “You eliminate $250,000 of capital acquisition premium that you traditionally paid to invest in a higher-efficiency electric bus.”
Electric buses may have an easier time gaining traction than passenger EVs for several reasons. They drive longer distances, which means the fuel savings add up over a shorter period of time. They cover predictable routes, making it easier to locate and build recharging infrastructure. Perhaps most importantly, the customers tend to be municipalities or corporations, rather than individuals. These entities can take a long-term view, and make practical decisions around life-cycle costs.
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China accounts for the vast majority of electric buses on the roads worldwide. The U.S. market is still small, although growing quickly. As of 2017, fewer than 500 electric buses were sold in the U.S. But Proterra told Greentech Media that demand is strong and it already has 45 new orders this year, including from repeat customers. Portland, Oregon, just
The impact on the oil market could be more profound from buses than from EVs, at least in the short- and medium-term. According to
Elon Musk and Tesla tend to soak up an inordinate share of media attention when it comes to electrifying the transportation sector, but e-buses are having a larger impact.
By Nick Cunningham of Oilprice.com
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